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Suze Orman on Personal Finance

Suze Orman on Personal Finance

Karen Davila interviews Suze Orman on ANC.

Here are some insights from the interview:

  1. Filipinos don’t have a culture of savings because they don’t want to save. Filipinos think goal of life is to buy this, buy that. 
  2. People aren’t doing great yet. Stocks are booming, economy is growing. 
  3. Things will never define who you are, you define the things around you.
  4. Goal of money is to feel safe, to be secured, to buy medicines, to have a roof under your head.
  5. First of law of money: Live below your means but within your needs.
  6. If it’s a want, walk away. If it’s a need, buy it.
  7. You drink a cup of coffee, then you go to the bathroom (on latte expenses).
  8. Income – Expenses = Money to spend on things (for most Filipinos).
  9. No matter what you’re making, save 10% minimum.
  10. One account for emergency worth 8 months of monthly expenses
  11. After saving for an emergency fund, invest in an index mutual fund. 
  12. Is the person working for the firm honest? (on investing through firms).
  13. If you have dependents, get a life insurance. If you do not have dependents, why waste money on insurance.
  14. Health insurance is extremely important.
  15. Pre-nuptial agreement is extremely important.
  16. You need to be as financially intimate with the person you are going to marry as you are personally intimate with that person.
  17. This country is on the verge of booming. It has a lot of future.
  18. Better save in pesos than in dollars.
  19. If you don’t have enough money to pay your bills today, you don’t have money to invest. You can either generate more income, or cut expenses, so you can have money to invest.
  20. Index fund outperforms a managed fund.
  21. On credit card debts: There’s no investment out there that can earn 36% interest guaranteed. Pay it off. 
  22. On credit card debts: Why did you have credit card debts in the first place? You spend more than what you have. It’s a self-esteem issue on why people spend more than they can.
  23. People do not invest because they don’t know how. Continue educate people. Provide more affordable investments.
  24. Most common financial sin is credit cards debt.
Visit the Suze Orman website too. http://suzeorman.com/

Invest in stocks – Suze Orman

Philippine Star

by Donnabelle Gatdula
May 17, 2013
(excerpts only)

“I still believe that the place to be is in stocks, or exchange trade funds which you don’t have yet here that pay high dividends because interest rates are so low,” Orman said, in a press briefing.

She said the peso cost averaging (PCA) is also one venue for investment. PCA is a strategy that long-term investors use to invest in the stock market. It involves investing a fixed amount of money at regular intervals over a long period of time or about 10 to 20 years.

“I am also a fan of index funds rather than managed mutual funds,” Orman stressed.

“If people are investing especially when you are not educated in investing, I think it is far better off to go Philippine Stock Exchange (PSE) funds that are index funds and just put a certain amount of pesos in it every single month no matter what it does up or down. I think in the long-run you would probably outperform managed funds,” she added.

It is also important, she said, for investors to learn about fees and commissions.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The financial expert also underscored the need for the government to put more efforts on promoting financial literacy.“What would be wonderful is to get government’s blessing on (financial literacy) programs that could be made available to everybody. That nobody would benefit. It would be sponsored by just one bank, it would be something really for the entire country to do. So we’ll see where it goes, see if they’re apt for that,” she said.

She said she would gladly help push for financial literacy among Filipinos.

“What should be done is to educate the people on how to invest but with an unbiased source. That the source has nothing to gain by telling them how to do it. That is why I would really like to be that person. I am honored enough to be so,” she said.

Asked what the Filipinos should do to be able to get a share in an improving economic growth, Orman said, “the goal simply is to have pesos, to have savings, so you feel safe.”

“So stop using the fact that you are not making money out of your money as an excuse for you not saving, eventually one day interest rates will go back up, one day you have interest again on savings accounts. But if you have saved certain amount of money, you have something to put in mutual funds, you can make even more money if you do peso cost averaging,” she said.

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