Of course you can't earn 10% on your savings. The Federal Reserve is printing up trillions of dollars out of thin air and loaning it out at near zero percent. Who's going to pay you 10% interest when they can get the Fed's money nearly for free? Savings in this country has been ruined by all these attempts to "fix" the economy.
Investing in stocks is slightly better, this year, but there's always the risk of another crash, or simply picking the wrong stocks. And if inflation is at 5% (thanks to all that money created out of thin air) you have to earn 8-10% just to break even after you pay the taxes on your "gains".
In a perfect world you could stuff your latte money under the mattress, take it out a year later, and it'll buy a little more than a latte because the world is a little more efficient at making stuff each year -- the same amount of cash buys more goods. But instead, no, we have an increasing money supply so each dollar is worth less and less, and we as a society consume most of our resources each year (e.g. the labor and other resources required to make and serve the latte) rather than investing them for future benefit.
This woman's description of Dave Ramsey badly misrepresents what he does. He doesn't condemn people for being in debt. If it's medical debt or crisis debt he does not criticize. He doesn't tell people to never file for bankruptcy, but he learns about the person's situation and then makes suggestions on how to manage to pay their debts. Sometimes bankruptcy is unavoidable.
As for his own bankruptcy, well, who's on a moral high horse now? The law says that in bankruptcy your debts are forgiven.
There is nothing in the law about slinking away and never engaging in financial activities again, and nothing in the law that says that you can't try to help other people make the mistakes you made.
Whether your poverty is the result of things totally out of your control - illnesses, accidents, natural disasters -- or if it's from spending more than you have, the solution is the same: one way or another, spend less than you make.
That can be done by increasing your household resources or reducing your spending, or both. It's not fun. Nobody says it's fun. It's just math. Math is not a vengeful volcano deity out to get you, it's just math.
Although I do agree that sometimes various circumstances get in the way of us struggling with our finances, I agree with Suze's philosophy most of the time. I find it difficult to blame all of my financial issues on outside forces and since the interviewee is selling her book, I'm a bit leery of her true intentions.
It is a sad commentary on just how depraved our society is when we celebrate the fact that just six Walton heirs control as much wealth as the ENTIRE BOTTOM 42% of the nation.
You can't build a million dollar roof on thousand dollar walls and a ten dollar foundation and expect it NOT to collapse, so why do we expect an economy to work any differently?
If you haven't saved any money to survive a job loss, then that is your fault. If you are living paycheck to paycheck and still have cable and cell phones, it is your fault. If you live PTP and drive a car equal to your income, then it is your fault. If you have such a low income you can't survive, somewhere you made a choice that put you in that position. Dave Ramsey is one extreme and Ric Edelman is another when it comes to owning your house. One says pay it off early and the other says keep it. It all comes down to how well you take care of the money you have and don't blow money on unnecessary items. Look, if you have a huge bill for drugs each month, that is one thing, but someoene buying a new car every five years and barely making it is an idiot.
What Suze and Dave fail to realize is that the largest employers in the country are the car and food industry. By telling everyone to never eat out or keep driving junks is depriving lots of people of income. And Suze caters to a strange crowd of callers, I make 100k a year after 30 yrs but many 30 yr old call and say they individually are making 2x what i make, have paid off houses, and 500K in bank and she says "great".. unless they are NBA or MLB bench players not possible.
You have clearly never listened to Dave Ramsey. He does NOT "tell everyone to never eat out or keep driving junk"! He tells everyone to make SHORT term sacrifices so that in the LONGER term we can drive the car we choose, read the menu left-to-right (I.e., focus on the food instead of the price), retire with dignity, and give generously to make a difference in the lives of others rather than just scrimp by.
That you and the author insist that normal people must have trouble "making ends meet" unless they are "NBA or MLB bench players" and thus must sacrifice their dignity to become dependent on the government teat is exactly the problem. The government is not the solution, you are. It's a radical, self-empowering message that fans on Nanny Government apparently just can't stand.
BTW, demanding that people buy cars they can't afford so that we don't "deprive lots of people of income" is backwards. These "lots of people" have no right to my income - if they want it, they need to EARN it by finding and marketing a product that I actually WANT to buy. Then we both win!
Suze Orman's advice is alright, it's just overhyped and breathlessly delivered. There's nothing original in Ms. Orman's work, which is why she needs to sell by being a hype mistress.
Donald Trump in the day received $1 million for a speech, which goes to show you that big talk and big hair can pay very well in the United States, much better than original insight.
All that said, why rip Orman? It's not that she's wrong exactly. She's just another carnival barker making a buck, and a reasonable pleasant and harmless one at that.
"The reality is that we are living in a world in which it is increasingly hard for responsible people to make ends meet."
Talk about an irresponsible canard! Then how is it that for decades the US has consumed more than it produced (US trade deficit), funded by large populations in countries with lower per-capita GDP than the US (capital surplus)? They make less, save more, and loan us their savings to finance our overconsumption, while growing their economies faster than ours.
It is ALWAYS possible for a responsible individual to make ends meet. That is one of the hallmarks of a responsible person.
Apparently reason and logic is not your friend. Your concluding statement is a convenient tautology because you can dismiss any counter example as simply "He/She is not a responsible person..."
It also doesn't square with the facts. 10s of millions of hard-working, decent, responsible people can't make ends meet under our current system, even working two or more jobs. When you bring home $1,000/month, and your fixed expenses for your family are $1,000/month (or more), you are (at best) barely holding on. Better pray your car doesn't break down or your landlord doesn't raise the rent because there's no affordable housing in your area.
@GPRICE1702 - If you are truly working 2 full-time jobs and still making only $12k per year total, then prayer is a great first step. But you also desperately need a great plan to make yourself worth $50k a year in the next 5 years. Where does your passion lie? What do you need to turn that passion into income? Education? Training? Better business contacts? What resources do you have available to get what you need? A community college? An apprentice program or potential mentor? How will you transition from your current sub-minimum wage jobs to a career that excites you (and actually pays the bills)?
Don't wait for someone else to fix your problems, lay a plan and execute it. This is not "blaming" you for your current situation, it's showing you how to change it! And BTW, it worked for me.
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Investing in stocks is slightly better, this year, but there's always the risk of another crash, or simply picking the wrong stocks. And if inflation is at 5% (thanks to all that money created out of thin air) you have to earn 8-10% just to break even after you pay the taxes on your "gains".
In a perfect world you could stuff your latte money under the mattress, take it out a year later, and it'll buy a little more than a latte because the world is a little more efficient at making stuff each year -- the same amount of cash buys more goods. But instead, no, we have an increasing money supply so each dollar is worth less and less, and we as a society consume most of our resources each year (e.g. the labor and other resources required to make and serve the latte) rather than investing them for future benefit.
As for his own bankruptcy, well, who's on a moral high horse now? The law says that in bankruptcy your debts are forgiven.
There is nothing in the law about slinking away and never engaging in financial activities again, and nothing in the law that says that you can't try to help other people make the mistakes you made.
Whether your poverty is the result of things totally out of your control - illnesses, accidents, natural disasters -- or if it's from spending more than you have, the solution is the same: one way or another, spend less than you make.
That can be done by increasing your household resources or reducing your spending, or both. It's not fun. Nobody says it's fun. It's just math. Math is not a vengeful volcano deity out to get you, it's just math.
http://articles.latimes.com/2012/jul/18/business/la-fi-mo-walmart-heirs-20120718
And that wealth came in most part by so underpaying their employees that they qualify for Medicaid and Food Stamps.
http://truth-out.org/opinion/item/13127-reagans-welfare-queen-found
http://www.dailykos.com/story/2012/06/20/1101630/-ATTN-GOP-SENATORS-Walmart-Is-The-Largest-Food-Stamp-Recipient-In-The-Country-Fine-Them
You can't build a million dollar roof on thousand dollar walls and a ten dollar foundation and expect it NOT to collapse, so why do we expect an economy to work any differently?
That you and the author insist that normal people must have trouble "making ends meet" unless they are "NBA or MLB bench players" and thus must sacrifice their dignity to become dependent on the government teat is exactly the problem. The government is not the solution, you are. It's a radical, self-empowering message that fans on Nanny Government apparently just can't stand.
BTW, demanding that people buy cars they can't afford so that we don't "deprive lots of people of income" is backwards. These "lots of people" have no right to my income - if they want it, they need to EARN it by finding and marketing a product that I actually WANT to buy. Then we both win!
Just a thought.
Donald Trump in the day received $1 million for a speech, which goes to show you that big talk and big hair can pay very well in the United States, much better than original insight.
All that said, why rip Orman? It's not that she's wrong exactly. She's just another carnival barker making a buck, and a reasonable pleasant and harmless one at that.
Talk about an irresponsible canard! Then how is it that for decades the US has consumed more than it produced (US trade deficit), funded by large populations in countries with lower per-capita GDP than the US (capital surplus)? They make less, save more, and loan us their savings to finance our overconsumption, while growing their economies faster than ours.
It is ALWAYS possible for a responsible individual to make ends meet. That is one of the hallmarks of a responsible person.
It also doesn't square with the facts. 10s of millions of hard-working, decent, responsible people can't make ends meet under our current system, even working two or more jobs. When you bring home $1,000/month, and your fixed expenses for your family are $1,000/month (or more), you are (at best) barely holding on. Better pray your car doesn't break down or your landlord doesn't raise the rent because there's no affordable housing in your area.
Don't wait for someone else to fix your problems, lay a plan and execute it. This is not "blaming" you for your current situation, it's showing you how to change it! And BTW, it worked for me.