Podcast Episode - Pride

Credit Cards, Financial Independence, Interest Rates, Money Management, Must Have Documents, Student Loans

October 27, 2019

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.

Podcast Transcript:

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 loanto 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.Now, before I end today's podcast because, truthfully, that would be a perfect place to end it. The music comes in, everything's great, here we go, sign off. I do want to say it's exercises like this, it's transforming how you think, feel and act about who you are and your money that I will be teaching on November 10th in Santa Monica, California. It's called the Nine Steps to Financial Independence, and it will be all me for about five or six hours. Hopefully, The Nine Steps will transform your life before your very eyes. It will give you the tools so that you can be more and therefore have more. It will absolutely do everything that you need and every single one of you will be leaving with my Will and Trust kit, which you all have been asking for. So tickets are $54. There are only 200 or 300 seats, they have just gone on sale. That is all I'm allowing because I want to personally interact with all of you. So, if you are around the Santa Monica area or even if you want to fly in for it to take a class with me, yeah, I have to tell you, I think it's worth it. We are taping the class, it will be videotaped so that we can offer this to other people. As I said, it is $54, and I think it is worth every single penny of it. So all you have to do if you're interested is go to www.HayHouse.com and scroll down to where it says Events. You'll see my picture, click there, and that is where you can buy tickets. I hope to see all of you there. Well, not all of you, because we only have room for 200 or 300, but a lot of you. I would love that. All right, everybody, cue the music. 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. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information. To find the right Credit Union for you, visit https://www.mycreditunion.gov/. Interested in Suze's MUST HAVE™ Documents? Go to https://www.hayhouse.com/checkout/cart/add?product=17668&qty=1.

Suze Orman Blog and Podcast Episodes

Suze's Financial Strength Test

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.

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