About Suze, Credit, Financial Independence, Loans, Student Loans
July 30, 2020
Listen to Podcast Episode:
Pride. In the wrong setting, too much pride can ruin us. In this podcast, Suze shares three stories about how pride lead to severe financial set-backs for people in her life.
Suze Orman's Women and Money podcast is proudly sponsored by credit unions; a safe home for your money, rain or shine. Suze O. here. Now, listen to me, everybody. While I am healing, Sarah and Robert are going to present the following "Best Of" episode of the Women and Money podcast, as well as the men smart enough to listen, and briefly explain why they chose it for you to hear. So, everybody, enjoy the "Best Of" podcast. See you soon. Hi, everyone, this is Sarah, and this is Robert, and today is Thursday, July 30, 2020, and welcome to the Women and Money podcast. As you know, we are doing a "Best Of Best Of" series, and we like to kick it off with a little update on Suze's health. We are really happy to share that she is at home in Florida right now, recovering and resting. And so she's feeling much better than she was this time last week, that's for sure, but we've got a road ahead of us and she's so thankful for all of the well wishes and prayers, they're really helping. She loves hearing them, she loves seeing them, and so we want everyone to keep sending them our way, which you can do through the community. If you download the free app by searching Suze Orman at the Apple App Store or Google Play, you can send her messages there and we are providing all the updates on Suze. That's the one place you can go to find out unless you're listening, of course, to the podcast. And one of the fun things, because you know Suze, she's always thinking about us, even though she's recovering, Robert. She sent us a video to post of her with her walker walking down the hospital hallway as she starts her physical therapy. And, of course, she stopped halfway through her walk to remind everybody to keep going with The Eight Qualities of a Wealthy Woman course and that she was checking on all of us. Does that sound like Suze or what? Oh, of course, it was great to watch that video, I watched it a few times, actually. It is pretty amazing. We got some incredible comments from that video. One of my favorites came from M. Watson, RN, who said, you look fabulous. Your hair! I was laughing so hard because their hair did look perfect. And she continues, keep up the great work, you're an inspiration. Thank you so much for sharing. Awe that's really sweet. Yeah, it is really cute. So, if you're listening, this past Sunday on the first "Best Of Best Of" series, we asked everybody to head to the community and let us know what episodes of the podcast that you want us to include. And J-13 has asked for "Pride," which was also already on our list, Robert, right? Yep, absolutely. So we decided to move that up the list. So, without further ado, Robert, why don't you cue up why we love it so much? I would love to. So, everybody, this was originally published on October 27, 2019. And in this episode, we get a peek into what I like to call late night with Suze, where she's writing back and forth with the son of one of her friends at 1 a.m. Both Sarah and I have gotten texts at night when Suze has an idea. So, it's actually really cool to get those, but the main focus of this episode is how misplaced pride gets in the way of us achieving our goals, especially our financial goals. And Suze gives four great examples about how pride can hold us back. And I can tell you personally that pride has wrecked me, financially, at one point. So, I found working on this episode particularly enlightening because I realized I wasn't the only one who let pride get in my way or one's way. And Suze's words reinforced the idea that letting go of one's pride really clears the way for financial freedom. I remember some of your stories about that. We talked about that a few nights, late night, when this episode came out. So, let's do this, why don't we listen together? Here is the "Pride" episode. Pride, pride. Today's podcast is all about pride. And this isn't where I'm talking about gay pride or things like that. I'm talking about your pride and how, when you are so proud, or try to protect yourself and show a part of yourself that isn't quite true. Your pride. I want to talk to you about how it gets you into so much financial trouble it's not even funny. So, for instance, I have a friend who has a son, and his son happens to be in college. And I have communication and a relationship with this son, it's his freshman year. And I actually had him read the book, The Richest Man in Babylon. And if you listen to my podcast, you know, I love The Richest Man in Babylon book. I don't care that it doesn't say The Richest Woman in Babylon. The theory behind that book is fabulous, and it came out again this year. I wrote the introduction to it and I was so honored to do so because it is a financial classic. It was about 1:00 in the morning, and, yes, Suze Orman was still up at 1 a.m., and he writes me an email, and he quotes from the book. And I love that he's reading the book, and I'm talking to him about money and what are his goals and everything about his life. And I say to him, do you have student loan debt? He says I don't know. What do you mean you don't know? He said I imagine I do. I said, well, don't you think you should ask your father or that you should know if you have student loan debt? You're an adult, you're a freshman in college now, you need to know these things. Why would your parents be sheltering you from the fact of that? Are you going to be responsible for paying back this money? It's like you have to know these things. He says, well, I'll call my dad in the morning and I'll ask him. I go good and then get back to me on it. His father happens to be a financial advisor, and so the next morning I get an email and says, oh yes, we have student loans. But Suze, I don't have any student loans, my father said to me, no son of mine is going to graduate school with a student loan. No way. And I'm thinking, well, that's an interesting thing for a father to say that, especially when I know that this father is having incredible financial difficulties. Does it matter if it's your financial advisor? It doesn't matter, sometimes things happen, they go wrong and you can end up totally penniless. And I watched this family do that. I watched him own a home and then I watched them lose their home. I even watched them having to sell the furniture in their home just so they could eat. I've watched them go through all these things, so I know that they don't have any money, but pride. No son of mine is going to graduate college with student loan debt. And I say to the son, but don't you think that's kind of strange, given the fact that you know your father doesn't have any money? You know your mother doesn't have any money. They're still married. And he goes, I know, kind of weird, right? And I go, what kind of loan did he take out? He said I don't know Suze. I said, well, maybe we need to find out because I have a strange feeling that he took out a parent plus loan to pay for your college. And you do know that parent plus loans can be some of the most expensive student loans out there. And the kid says to me, well, why is that, Suze? And I go well, you know, a parent plus loan is a loan that parents can take out, they're government loans for college education, and they come with a really high origination fee, like a 4.6% fee to get it. Now, I've talked to all of you about this before, but I'm just going to repeat it because you never know when people just listen to this one podcast then they don't listen to any other. Sometimes just one podcast is enough to change your whole life. But anyway, I said, and it's not just that, but that the interest rate is about 7.08%. And the kid says to me, well Suze, why would he pay 7% on a loan? I'm taking a business class right now, and my business professor says to me that interest rates are the lowest they've ever been. So if you're going to start a business now, it's a great time to take out a loan because you can get loans for really 2, 3, 4%. Really cheap, really cheap money. So why would my father pay 7% for a loan? No way, Suze, would my father take out a parent plus loan. OK, why don't you call and ask him and then get back to me? The next morning I get an email. Suze, he took out a parent plus loan and he's going to take out parent plus loans for all four years. He's going to end up owing almost $200,000 at 7%. Suze, he can't afford that. But this boy's father has pride. No son of mine is going to graduate school with a student loan. Really? So now I'm having a conversation with the son. I say, call me. And now we're talking about it, and I'm saying, how is that going to make you feel? And he says it's going to make me feel horrible. He doesn't have that kind of money to do that, and he did it for my sister as well. He's already older, Suze, he's never going to be able to retire. I can't do this. And I said, well, why didn't he allow you to take out a Stafford loan at a lower interest rate that would be subsidized because you obviously need financial aid? And we're going on and he goes, I don't know. I said, well, you need to now be a man and you need to call your father, and you need to tell him the things that you've learned because you could take out a Stafford loan and he could pay that off for you. It would save him a tremendous amount of interest, and it wouldn't be as high of an origination fee, and the interest rate would be subsidized. So for all four years, you would not be accumulating interest on that money. Oh, I could do that, Suze, I'll call him. And I said, and when will you call him? He said, I don't know, I've gotta work up my courage. I said, why? Why sweetheart? Why do you have to work up your courage? And he says to me because my dad is a proud man, Suze, and I don't want him to be hurt. And I said, but don't you understand that his pride is getting in the way of making intelligent decisions because no son of mine is going to graduate school with a student loan? And I say to this kid, wouldn't you rather graduate with a student loan that you know you could pay off then watch your father struggle to not be able to pay it off? He said, of course, I would. But Suze, I can't do that to him, it would hurt him. So pride. And then I'm in another situation where I've been helping this woman, this abused woman, in many different ways to be able to become strong and get by and get over the problems really that are facing her. And I'm giving a talk with her in the room in front of about 100 or 200 people, and I'm trying to make the point that sometimes helping is hurting and sometimes hurting is helping. So we're in front of the room and I know a lot of you, by the way, because you've written me, you go, Suze, stop with this helping is hurting and hurting is helping, everybody is saying it... But it's true. And I'm up there and now she's in the audience and I want her to come to the front. I want everybody to see how incredible she is. And now I'm making an example, however, that a little while ago she called me and she asked me for $20. And I said, nope, not giving you $20. And I was simply trying to make the point that $20 is nothing to me obviously, but $20 with so much to her. But if I had helped her and I gave her that $20, in the end, in my opinion, it would have hurt her. And the very next day I get an email from her and she rips me a big one. She says, how dare you? How dare you embarrass me in front of all these people and tell them that I needed $20? You shouldn't do that to me. I'm a woman, I'm full of pride. I don't want them to know that I needed $20. And I'm like, Why not? It's not until you stand in your truth and you are not afraid to tell everybody that you don't have a pot to pee in, that yes you need $20. Yes, you want $20, and you're not embarrassed because you don't have $20. It's not until you put that pride away and you're able to stand in your truth that you will ever be able to truly change your life. And oh, we got into it big time. And she went so far to say to me, that has backed her in every possible way, she says to me, that's it, our friendship is over. Our friendship is over. You told people I didn't have $20, I can't be friends with you anymore. It's over. And I'm sitting there thinking to myself, OK, you don't want to be friends with Suze Orman? I don't personally care. Not my problem. And her pride, her pride ended our relationship, temporarily. But then, of course, as time went on and she wanted to come back, I got another email from her. But what was fascinating about it is this time now, she was a little bit more humble. She understood a little bit more, and now she is progressing little by little. She just had to sit with it. So she overcame her pride and the deal that we made was this. That if we're going to continue to be friends, she has to stand in her truth and she has got to put her pride away. Now, I tell you these stories because you know I had to go through that myself. I told you the story before that in 1987 when one of my employees ripped me off, and I am in more debt than I knew what to do with and blah blah, blah, blah, blah, blah, blah. That I had to put my pride away and I had to tell every single person how much credit card debt I had, everything. And as soon as I did that, everything turned around for me. So here is my question for you. What are you doing when you come from pride? What do people think about you that just isn't true? Do they think that you are well because you're so proud that you are driving a brand new car that you leased and you really can't afford? Do they just think that you have more money than they do, because why? You always have new clothes, you have new handbags, new shoes, new jewelry. You're always looking so great, but the truth of the matter is that your entire future is mortgaged to your house, to your credit cards, to your lease payments, to your 401k loans, to everything else. Credit cards. Is that possible? Again, I'll never forget, when I did The Oprah Winfrey Show, one of the very first ones I did, we were in a suburb of Chicago, and my job was to go into this family's house and redo them and do a makeover. And we were out there with the cameras, and we're not supposed to go until 12 because, of course, they were cleaning up their house. God forbid the camera should come in and see how you truly live. And all the neighbors were coming out saying, hi, Suze, what are you doing here? And I said, oh, I'm here to go and interview so and so who lives in this house. They said, oh, they are the best family ever. You wouldn't believe the most incredible things that they do. Like every Christmas, Suze, they bring in all these trucks of snow, fake snow, and they have, like, these sled parties and all these things. And I go, why do you need to bring in fake snow in Chicago? They go, well, you know, Suze, sometimes it doesn't always snow in December. So we have these parties and they're so generous. And their kids all take horseback riding lessons and all of us just admire them so much. They've been so good with their money, I can't imagine Suze what you're going to talk to them about. And of course, you already know the ending to this story, don't you? I go in and I start interviewing them and they don't have any money to their name. They have more credit card debt than snow that they bring in for Christmas. They lease everything, they have nothing. But everybody thinks they have everything. And I'll never forget asking them, why? Why are you pretending? And once again, I heard the word. Suze, I'm a proud husband, a proud father. I have pride, Suze. I want my wife to feel good. I want everybody to think that we're doing good, that's what makes me feel good. And I said, well, how good can it make you feel when you can't even pay your bills, and Suze Orman has to be here to straighten out this entire mess for you? And now Suze Orman's going to recommend that you sell this house, you get rid of these cars, that you tell everybody the truth. Suze Orman wants you to go out onto the front porch and get a megaphone and put up a banner for this next Christmas and say, I'm broke, I'm up to my eyeballs in debt. I think you need to put that on the front of your house so that all of your neighbors who are envious of you, and they feel bad about who they are, can stop it because you're all in the same boat. None of you have any money, and you're all pretending like you do. Why? Because of pride. No son of mine is going to graduate school with student loan debt. Those words have been ringing through my mind since I had the conversation with this brilliant, wonderful young man. So I wanted to do a podcast on that. Because what are you doing in your life where you are coming from pride? And if you find that you are coming from that place, I am asking you to stop it, to stop it right now. Just be real, just be who you are, stand in your truth. If you don't have money, who cares? The things that you have don't make you. None of that matters. The only thing that matters is that you show the world the truth about who you are, and when you're able to do that, you have self-worth and you know the saying, don't you? Self-worth equals net worth. OK, Robert, that's another great one. Well, I hope you will join us on the Community app between now and the next episode. Tell us what your favorite episodes are because we might just be picking it. Please continue to share your well wishes, and prayers, and blessings for Suze and KT. Again, you can find the free Suze Orman app by going to the Apple App Store or Google Play and searching Suze Orman. And we'll meet you back here in this feed on Sunday for another Best of the Best. Thanks for listening. Hi, I'm Sarah, and I'm Robert, and we're from Suze Orman's Women and Money podcast team here to tell you that Alloya's member credit unions are so proud to have brought you this episode. You know, Robert, credit unions live by people helping people philosophy. Absolutely, Sarah. And that means when you bank with a credit union, you can trust that they have your best interest at heart. The fact is, regardless of circumstance, a credit union will have your back and keep your money safe, that's the credit union promise. Go to www.MyCreditUnion.gov to find a credit union that fits your needs. That's MyCreditUnion.gov. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. 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Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
I have checked all the beneficiaries of every investment account and insurance policy within the past year.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.
Credit & Debt, Saving, Investing, Retirement