I previously predicted the contents of Suze's new book, after I paid full retail for the previous one. Well, today Suze released her new book for free today. That I respect a great deal. Suze really puts her money where her mouth is by offering her book for free. That's pretty incredible really. Good for Suze.I was concerned about reading 227 pages in .pdf, but the thing is written in a massive font and reads like it was written for a 5th grader, so that was no problem. I predicted most of the book, more than I thought I would. It's creepy how dead my prediction is. Emergency fund is 8 months now. She is pitching 3 year car loans as responsible, and student loans are OK going back to school if you have enough savings to live on.
But Suze threw a few curve balls at me...
* Non-deductible IRAs for high income. Suze is still pushing that tax loophole that in 2010 you can convert an IRA to a Roth IRA regardless of income. She mentioned it several times. Wha? How could Suze honestly believe that Obama is going to let that little loophole for the rich slip by. That will be the first thing plugged.
* 100% stocks if you have over 20 years until retirement. I thought she'd be more conservative.
* She is obsessed with having some FDIC savings and not money markets because some rogue money market fund invested in Lehman and lost money. Sorry, FTEXX is not going anywhere. And if FTEXX goes broke, we need to be hording water, not money. This one surprised me. I have maybe $500 in FDIC insured accounts, and I have no fear for my money market.
* Advice for First-Time Homebuyers. One page. This is just garbage. "The best way to figure out what you can afford is to use an online calculator (go to www.bankrate.com) to figure out the base mortgage amount." Then you add 30% and "ask yourself if you can honestly handle that amount." Wha? I don't even know what this means.
I went to bankrate and found the "How Much House Can You Afford" calculator. I'm not sure how I'm supposed to know my house's taxes if I don't know how much the house is, but whatever. Bankrate approved me for 750K, assuming 100K down. Holy Moley! That's obviously crazy. CRAZY!
There's really nothing in the whole book for my situation. My cars are paid for, my credit is good, I have no credit card debt, no HELOC, I'm not paying for little Johnny's college. I guess the only part that really applies to me is the emergency fund and the FDIC paranoia.
There's a lot of mumbo jumbo about truth, about being honest about your money. I think I can see that now. There's something about living without debt that feels honest. Something about paying for things with money that isn't tricking yourself with monthly payments. Being debt free feels like a very honest place. But then I guess publishing your financials to the whole world is really an exercise is honesty -- y'all don't let me lie to myself anymore.
9 comments:
I always feel like that after reading books from Suze.. hence why I stick to high net worth income earner books and how they earned their money.
:) And blogging has really helped as well.
Fabulously Broke in the City
Just a girl trying to find a balance between being a Shopaholic and a Saver...
I skimmed through the book today too looking for things applicable to my situation. I like what she had to say about private student loans (aka the devil). Also her whole honesty thing as simplistic as it may seem to some really needs to be heard by the entire country - otherwise our economy wouldn't be in the crapper in the first place.
Exactly, Sallie's Niece. I watched Oprah's show today. The guest with 23 credit cards and approximately $80,000 in debt is not the only one in the country in this situation. Every Saturday, people call in to Suze's show on CNBC with $20,000, $30,000, $40,000 or more of credit card debt. Many have student loan debt or HELOCs they can't afford. They call in during the "Can I Afford It Segment?" saying that they want to buy some completely unnecessary item when they don't have a lick of savings. People in this country have drunk the Kool-aid poured for them by Madison Avenue and are convinced that they needed all these things to be happy in life or to show others that they're successful. Frankly, DogAteMyFinances, you're not that much different. You believe that you have to drive a luxury car to be a success or buy a $500,000 home to be happy. However, if you lost your job, for how many months could you pay your bills? You've combined your wedding expense fund and your emergency fund. Once the wedding is paid for, will you have any emergency fund? Personal finance is not taught to kids at home or in the schools. Is it any wonder that most adults in this country are financially illiterate? If what Suze's preaching seems like common sense to you, then congratulations -- you are ahead of the majority of the people in this country.
I don't have to drive a luxury car to be happy. I have to drive a luxury car in my car-conscious business. Reading is fundamental.
The wedding fund and the emergency fund are both in my money market. In that sense, they are combined.
Depending on how much the wedding costs, we have about 10K extra at this moment. We could easily operate on one income. But if we both lost our jobs (unlikely), the 10K is probably 3-4 months. And we could sell a car.
I'm 20+ years from retirement and lamenting my mostly stock position. Adding some bonds reduces your downside risk without dragging down your overall return. Live and learn. Suze is fine for the basics but once you've gotten past that point she doesn't have much to offer.
Miss M, if you want more than the basics, read Suze's book "The Road to Wealth." It's a huge, comprehensive guide to money. It is a few years old, however, so it won't reflect the current economic conditions.
I watched her on MSNBC and Oprah the other day and she is a class act. Offering her book for free is a really nice thing to do. I'm sure she's had no problem selling her books but she does put her money where her mouth is. I appreciated her tips and have made huge strides following her advice. There's no insurance in life but living consciously and with a plan can make all the difference.
Jerry
www.leads4insurance.com
I agree, Suze's advice is mostly for the financially ignorant. It is like teaching the ABC's to the illiterate. You need the ABC's before you can pick up Jane Austen. At one time, I had CC debt and student loans and no savings. Then, things she said resonated with me. Now I've moved beyond that and want more sophisticated advice.
BTW, I have a $500,000+ house and it is actually a simple life: 2 bedrooms, 1 bathroom, 3 adults. Not a life of luxury. In some ways California might as well be a different country. In housing, dollars are like pesos.
Waving my hands....I am financially ignorant. I am 37 and have thought that having things on many credit cards was the life. After 2 bankruptcies (CH 7 and 13), I know better. Been working on having an e-fund,paying attention to watch I spend,and watching Suze and Carmen for some kind of advice to where I can put my money. Suze is a good person to offer her book...I got the other one she offered on my flash drive. I love DAMF...everyone is different and no pot shots at the way people live there lives. We all have to be financially literate to get through this tough time. Wishing all of you luck.
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