Thursday, April 23, 2009

STI: She can well afford it

April 24, 2009

She can well afford it

From a waitress earning just US$400 a month to a financial guru reportedly worth US$32 million, Suze Orman has come a long way

By Hong Xinyi 


Fans of American personal finance guru Suze Orman will be familiar with the gold earrings she sports in every episode of her weekly TV show on CNBC (StarHub Channel 15, Saturdays, 5pm).


The earrings echo the golden tints of her signature blonde crop - courtesy of celebrity hairstylist Kim Robinson, 'the best stylist and colourist in the world today', she proclaims, with her trademark emphatic enthusiasm.


She wears the earrings on a global TV show not just for aesthetic reasons, but also to make a point: The earrings were bought 11 years ago for just US$300 (S$452).


So why does a woman whose net worth is said to be US$32 million wear US$300 earrings?


Orman, 57, says she particularly likes to point out these earrings to viewers who call in to ask for permission to buy extravagant items during the popular segment, Can I Afford It.


'I am sending a big message,' she tells Urban in an exclusive phone interview.


'If I can be on TV wearing the same thing all the time, so can you. You don't need a drawerful of jewellery to impress people you don't know or like. You are not the car you drive or the home you live in or the clothes you wear.'


This frugal sartorial policy is something many Singaporeans, particularly budget-conscious women, can appreciate now that the recession is biting.


Her habit started in 1998 when she appeared as a guest on The Oprah Winfrey Show to counsel women struggling with credit card debt. She discovered that many of them had splurged on new outfits and jewellery to look good on the show.


It is just one example of what Orman likes to focus on: the way women handle their money.


In 2007, she published the book Women And Money: Owning The Power To Control Your Destiny, a New York Times bestseller that aimed to change what she saw as an often dysfunctional relationship between women and their finances.


'It amazed me that in the eight years I had been doing The Suze Orman show, I rarely had a man call in and say he had co-signed a loan or took out a credit card and got into trouble for someone else,' she says.


'But it was one woman after another calling in to say they had taken out a loan for a boyfriend's truck and he had run off with the truck. Or the husband had lost his job and was running up credit card debt and they were afraid to talk to him about it. I just thought, women in the United States have come so far but are still so powerless about money.'


What women do with their money is very different from men, she says of this particular gender divide.


'Women will use their money to take care of their husbands, children, pets, plants, employers and employees before themselves because it is in their nature to nurture,' she notes.


'Men have no problem saying no; it is very rare for men to take on their wives' financial problems.'


If you think this is an odd stance for a woman whose claim to fame rests on being money-savvy, Orman will point you to her own classic, rags-to-riches story.


Born in Chicago to Russian emigrants, she struggled in school and dropped out of university to become a restaurant waitress in California, where she made US$400 a month.


In 1980, some of her regular customers loaned her US$50,000 to open her own restaurant. She took the money to investment house Merrill Lynch, where a broker lost it all to high-risk investments in three months flat.


This unfortunate episode, however, opened her eyes to the world of finance.


'It was the first time I had any money to follow,' she remembers, and she would read the financial pages avidly.


She decided to interview for a job as a broker at the same office that had lost all her money and believes she got it because the manager had a women's quota to fill.


During her stint at Merrill Lynch, she sued the company for the risky investments her former broker made and was able to repay her debts when the firm settled the case out of court.


In 1983, she left Merrill Lynch to become the vice-president of an investments company and started her own financial planning firm in 1987.


Today, in addition to hosting her CNBC show, Orman - whose partner of seven years is a producer on her show - also writes columns for publications such as Winfrey's O Magazine and is the author of seven best-selling books, the most recent of which is a US-centric outline for dealing with the recession called Suze Orman's 2009 Action Plan.


Critics, however, have branded her advice psychobabble.


Orman herself is the first to admit that her on-camera accounts of how she once chalked up massive credit card debt because of her own insecurities help her connect emotionally with fans. 'They understand where I am coming from.'


As for the haters, she says: 'I am laughing at them. It would be fascinating to compare my net worth to theirs.'


She believes much of the criticism stems from the fact that she is a woman speaking about personal finance rather than a man pontificating on the global economy.


'I would like them to look at the different words Wall Street uses, like confidence index. What is confidence? An emotional indicator,' she says, sounding both amused and riled.


For the record, she spoke out about the dangers of subprime mortgages as early as 2005.


'Today on CNN, a guy said the market is made up of the emotions of people. When he says it, that's right. When a woman says it, these male financial reporters say it's simplistic.


'People believe me because they know I am telling them the truth. If the truth is simplistic, then let it be simplistic.'

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