October 13, 2019
Listen to Podcast Episode:
True words of wealth are honest words. Suze explains why, by sharing an email from a Women & Money listener who at 46 years old has started to save for retirement, has debt and started a business.
On today's podcast, I want to talk about words that lead to wealth. You know, I'll never forget when I first started as a financial advisor, you all know my story. I was a waitress until I was essentially 30 years of age, and I had only been making $400 a month. Because of a fluke set of circumstances, somehow, I end up as a stockbroker. All right now, you might want to listen to that story, but that's not the point of today's podcast. And I remember sitting there thinking to myself, how is it possible that people are going to come in and ask me how to invest money, and I don't know how to invest money? Sure, they hired me to fill their women's quota. Sure, I went through six months of training and got my Series 7 and all my other licenses. But is that enough to qualify me for telling somebody else what to do with their money?I had no money, I had debt. It was 1980, I'm driving a 1960 Volvo station wagon, I can't even afford to park in the parking lot with all the other stockbrokers who have their BMWs, and their Mercedes, and their Jaguars, and their Cadillacs. And what do I do? I'm still parking on the street to get tickets to work it off in community service every day, and I'm sitting here and thinking, oh my God, Suze Orman. Oh my God, how are you going to pretend that you have money, that you know what you're doing with money? And I'll never forget that my mom, I was sitting with her she said, Suze, you have to look like you have money if you're going to be a stockbroker. I said but Mom, I don't have any money. And even though my mother had no money either, I'll never forget, she went out and she bought me a $1500 Rolex watch. Are you kidding me? Do you have any idea how much money that is and it was back in 1980? So that I could look like I had money. And she took her engagement ring and took the diamonds out of her engagement ring to make me a necklace so I could wear it, so I could look like I had money. And I was wearing the watch and I was wearing the necklace and I felt like such a fake, like such a phony. My mom didn't have that kind of money, and her engagement ring that I'm wearing around my neck? So, I decided, no, that's not what will lead to wealth. That's just a lie. That's a good intention by my mama, but it wasn't the truth.So, when people would come in, and I was the broker of the day, and the broker of the day is the person who gets to see everybody who walks in. And that's how a new broker starts to build their clientele. And I would sit there, and as I would have people come in and sit at my desk and they would start to talk to me about their money, they had more money than I had ever seen before. How is it possible? I'm sitting there thinking Suze, you are not qualified to tell these people what they should be doing. So, you know what I did? I told them that, I sat there and I said, listen, I am brand new. I just got my license. You have more money than I do. And if you ask me questions, I can find the answers to them. I have a list of stocks that Merrill Lynch, that was the brokerage firm at the time that had hired me, that Merrill Lynch says you should buy. But honest to God, I don't know if they're good stocks or they're bad stocks. And you know what they said to me? They go, oh my God, you're being honest with me. Nobody's ever honest when it comes to money, I really like you. We can do this together now.You have to remember that back in 1980, there weren't many if any, there was like one, discount brokerage firm. Charles Schwab had essentially just started. They were in this, but there really weren't the Ameritrade's and the E-trades and all these other discount brokerage firms. And the only way to invest money was with a full-service broker, like a Dean Witter back then, a Merrill Lynch, whatever they may be. Also back then, mutual funds, there were no such things as index funds, no-load mutual funds. They were all loaded mutual funds and there were only like a few hundred of them at the time if that. Not the thousands that you see today. So many people who came in to see a stockbroker if they had money, they already knew what they wanted to do with that money. And they were simply coming in to invest it because there was no other way for them to invest it.So these people would say to me, oh, Suze, don't worry. I know what I want to buy, I just need somebody to place the order with, so I'll place my order with you. I'm like, OK, I said, but just know, I don't know when to buy and when to sell. I don't know those things, so maybe you can teach me what you know, so I could be a better investment person. Can you imagine a stockbroker of financial advisors saying to you, I don't know what I'm doing? I'm brand new. I don't think you should actually invest with me because I don't know anything yet. Can you even imagine that happening? No. Everybody pretends like they know what they're doing, they have all this experience, they have all this knowledge. And the truth is they probably don't. But the words that lead to wealth for me, were the words of honesty, were words that were true, weren't words that were spoken to impress people, to get people to do something that I didn't know what they should be doing, but just simply so it would make me money. No, they were true words of wealth, and true words of wealth are honest words, are true words, are words that are spoken for the benefit of others as well as yourself. If I just spoke words to get people to do something that I didn't know what they should do, and they invested their money with me and all of a sudden I lost their money for them, can you even imagine what that feels like to lose money for somebody? It is not a good feeling. I mean, many of the reasons that many financial advisors, in my opinion, continue to lose money for somebody is because when things are going down and it's not going the way that you want it to go, it's very difficult to cut your losses short because you are always hoping that you are right. You are always hoping that you did the best thing for somebody, even if you are wrong and therefore you just stick with it. You hope for the best. But hope is not a financial plan, and any financial advisor should know if a stock is going down, why is it going down? Does it mean that it's going down because the entire stock market is going down or it's going down because it has bad management, or it doesn't have earnings or what is happening with that? And if you are wrong, cut your losses short and just admit that you are wrong. But that's a very difficult thing to do for most people. Remember the six most important words in life, remember this podcast? "I admit that I was wrong." But nobody wants to admit that they're wrong, especially if they're a financial advisor. So, they hope for the best because losing money for somebody else is so horrific, I can't even tell you. Nobody ever really wants to lose money for anybody, you always want to make money, I mean, that's what happened with Bernie Madoff. Bernie wanted to make money, I'm sure. But when things started to go wrong, he didn't know how to make it right. And he kept hanging in there and doing the most atrocious things, hoping that he would hit it big. But his words were not words of wealth, they were not true words, they were all lies. And look at the millions and millions of dollars that were lost for people because of lies.Now, why am I talking about this topic today? I'm talking about this topic because I got an email from somebody, and I'm not going to use this woman's name. And I just hope this woman knows that I'm reading this email to honor her, to really get her to think about what she is doing. Because her email, well, her email is really self-explanatory. So first, I'm just going to read it to you, and it goes like this.She says, I would like to know if I am a 46-year-old woman and I have nothing saved, and I am working a job that I am just beginning the 401k match on, and I have no outside investments or retirement plans. What is the best strategy to save for retirement? She goes on to say, how can I significantly increase my income/savings? Is it safe for me to invest in stocks? I read an article that talks about investing at 50. How do I get started? I am willing to take some risk to see the money grow. Beginning life at almost 50, how does that work, financially? I am a single mother of three, have a full-time job, and working, listen closely, I am working, on building a life financial coaching business. I am writing a couple of books and want to open an e-commerce site. I have other streams of income other than my job. She goes on to say, I am a renter, have $30,000 in student loan debt, approximately $4000-5000 of credit cards that are in collections, and I own my own car with no car payment. I am looking for the wisest way to grow my savings. Here is where it goes, it says, is it true that many people in the financial business have their own issues?So, this woman is writing and she has a company where she is being, among other things, a financial coach. A financial coach to others! And I'm sitting here thinking, no, it is not true that people in the financial business, if they're good, have their own issues, my friends. If people are in a financial business and they have their own issues, they need to tell you about that. They need to be honest with you, just like I was when I first started.Remember my story? In 1987, I had a woman who worked for me rip me off of everything that I had. It's a long story, and it's in one of my podcasts, it's in one of my books, who cares. My problem back then was I had been making a lot of money, I did not have any financial issues until that happened, and my financial issues came about because I didn't tell anybody that I had been ripped off. I wanted to pretend like everything was exactly the way that it was, and before you knew it, I had $250,000 of credit card debt, but nobody knew that I had that. So I had a big financial issue, and it wasn't until I stood in my truth and I told everybody what had happened to me and why I had that financial issue. It wasn't about my financial knowledge, I had a lot of financial knowledge, but I had an issue with standing in my truth. And it wasn't until I stood in my truth that my business totally turned around again.Words of wealth are honest words, so if you're going to be in a financial coaching business, then you have to tell every single person that you are coaching that you have $30,000 in student loan debt, you have $4000-5000 in credit loan debt, you have, you know, collections debt, you rent, you… Do you understand? You have to tell everybody that you do not have any money at all, and you have to talk about your own issues. And then you have to wonder, are they going to trust you? Because what is it? What is it that you can sell for them, that you could be a financial coach for them when you can't even be a financial coach for yourself. You're asking me for advice, you're asking me what can you do? No. When I had financial problems because of being ripped off, I knew what to do. I knew I had to stand in my truth, I didn't need to ask others what I should do. You cannot coach others on a topic that you have not mastered. You can, but will that really lead them to wealth? Will it lead them to the goal that they have come to you for? Or are you just speaking to them in words? No. Words of wealth have to be words where you stand in the truth. Words of wealth have to be words that you own because words that you own allow you to be powerful and make the right moves for yourself. So really, it was this email that caused me to do this podcast today. And for the woman who wrote this, I am not putting you down. I am not saying that you shouldn't try everything possible for you to do something to make money for you to be a coach of whatever it is, maybe health. Listen, I'm not great with my health, I can't seem to stick on anything that constantly makes me healthy. Why is it that I can't walk 10,000 steps a day? Why is it that I don't stick to certain programs with aerobics and weights and things like that? I don't know. So that means I'm not qualified to be a health coach. But I sure am qualified to be a wealth coach. So why don't you just stick to one area that you know better than anybody else?You know, I'll never forget when I first started in this business, and I heard somebody say, it does not matter what you want to be in life, whatever it is that you want to be, whether it's a teacher, a nurse, a financial advisor, whatever it is, you better be the absolute best of anybody out there. And I took those words to heart. And do I believe in the bottom of my gut that I am the absolute best personal finance expert in this world? Oh, you bet I do, in every molecule of my being, I believe that because I am that. So, my friend, who wrote this email, all of you who are listening to this podcast, that's what you need to do. You need to be the best at whatever it is that you are doing, whether it is, a stay at home parent, anything, whatever it is, whatever it is that you're doing, you have to be the best. Don't do something where you are not speaking the truth, where you do not know the truth because you're not living that truth. Speak words of wealth for others to hear and those words will create a true, wealthy world for all. 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://shop.suzeorman.com/checkout/cart/index/.
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.
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.