Suze’s inspiring story

Have you ever been on a financial bind because of excessive, impulsive spending? Whether we admit it or not, some of us find ourselves guilty of spending hard-earned money beyond our means. The American writer, scientist and politician Benjamin Franklin once said, “A penny saved is a penny earned.” (quotations.about.com) This simple quote reminds us that no matter how little or how much money we earn, we have to save and spend it wisely. A friend once told me, that it’s not how much one earns, but how much one saves.

The past weeks, the Bank of the Philippine Islands (BPI) brought again financial guru and motivational speaker Suze Orman to the Philippines for a series of inspiring talks about money matters. Suze is the host of the award-winning The Suze Orman Show on CNBC where she won a Gracie Award for Outstanding Program Host in 2006. She is also a best-selling author of books like The Money Class, The 9 Steps To Financial Freedom, Women & Money, Young, Fabulous & Broke, The Road to Wealth, The Laws of Money, The Courage to Be Rich and You’ve Earned It, Don’t Lose It!, among others.

Suze has an inspiring life story. She was born to a Jewish family on the South Side of Chicago, Illinois. She had a speech impediment and spent six years earning her degree in social work from the University of Illinois at Urbana-Champaign. She moved to Berkeley, California and worked as a waitress, earning $400 a month. She dreamt of opening her own diner.

In 1980, Suze’s loyal clients helped her by putting up a $50,000 10-year interest free loan, which she put in a money market account in Merrill Lynch. Unfortunately, her broker ran off with her money. She then asked the company to hire her. After a six-month probation, Suze became the company’s sixth top-earning broker. She also successfully sued Merrill Lynch for her investment loss and used the settlement money to pay off her loan at 18 percent interest.  

Suze was interviewed by Karen Davila on ANC’s Headstart. She is a real charmer and motivational speaker. Once she opens her mouth and starts talking, audiences “are putty in her palm.” She gave valuable pieces of advice during the interview on how to save, invest and avoid credit card debt.

She said that before buying anything, people should ask themselves if it is a need or a want. “If it’s a want, walk away. If it’s a need, you buy it. If you live below your means... and purchasing only your needs and walking away from your wants, you will find money to save.” According to Suze, the first law of money is “to live below your means but within your needs.”

Suze explained that things will never define who you are. It is you who define the things around you. “The goal of money is for you to feel safe, to feel secure, to be able to buy your needs, to feed yourself, feed your children, buy medicines, put a roof over your head that doesn’t blow away during the monsoon and typhoons. That’s the goal of money, so you can sleep at night, not to buy five watches,” she said.

“There are certain things that obviously you want to do. But you have to ask yourself this question: ‘Can I afford it?’ If you don’t have any money in savings, if you don’t have any money for your future, if all you have are those things around you, what does it say about you?”

Suze said that one should save a minimum of 10 percent of one’s salary and set it aside right away. She encouraged Filipinos to have an emergency fund in case they suddenly get sick or terminated from work. “You want to make sure you have a savings account that has at least eight months of what it would cost you to live for your everyday needs.” She also advised Filipinos to invest their money every month on a good mutual fund. “After you’ve done that, every month set aside a specific amount of pesos and invest that in this fund. It’s peso cost averaging, that way when the fund goes down, your pesos buy more shares. When the fund goes up, your pesos buy less shares but over time you’ve averaged the cost of the share with your pesos and you won’t lose money.”

The financial guru only has good words about the Philippine economy. “This is a country that is starting to grow. The economy is growing. The housing market is growing. The stock market is booming.”

When asked if Filipinos should invest in pesos instead of dollars, Suze remarked, “At this point, I would be saving in pesos. If they save in dollars and the peso continues to go up, they will lose money in the long run. You have to believe in your country. You have to invest in yourself. If you don’t believe in the Philippines, in your own peso here, what does that say? I would be investing right here in this country. Forget the United States.”

She warned that the most common financial sin is credit card debt. “Debt is bondage. You will never have financial freedom if you have bondage,” she enthused. “Before you save money, before you put any money away for retirement, your No. 1 goal is to take whatever extra money you have and pay off that credit card debt because at 36 percent (interest), you are digging a hole deeper and deeper.”

Suze left a special message for Filipinos before the end of Headstart. “This is all for you. I’m here for you. I’m not here for me. I have nothing to sell you. I have nothing to do with anything other than can you just learn to be safe with your savings? Can you want to be safe? Can you want to be secure? Can you put yourself first once and for all over the things that money can buy?”