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Tavis Talks: Suze Orman

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Tavis Smiley

Tavis Smiley


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Tavis talks with finance guru Suze Orman, who has solid information on how to save money.


0:09 Tavis Smiley

From Los Angeles, I am Tavis Smiley on the all new Tavis Smiley Network on BlogTalk Radio. Welcome to Tavis Talks. My guest today is an industry onto herself. She is one of the nations most sought after experts on financial issues. She is on TV, she is on the radio, she is a perennial best-selling author. She is on magazine covers, she is on the Internet. She has won just right every major award that I can think and some of them more than once, when Suze Orman speaks, people listen. I wanted to have on this program today, my friend, Suze Orman I'm gonna have you on this program. Thanks for your time as always.

0:42 Suze Orman

Any time I'm free.

0:44 Tavis Smiley

Suze, let me start our conversation by reading a headline from your network, cnbc.com, and I quote, "Market seems to have lost confidence in Bernanke." Your thoughts?

0:57 Suze Orman

Well first thing, is that these markets have been going up and up and up. A lot of people have a lot of profits and money that they've made that they did not take off the table and so they on their own, right. We're getting very nervous about with anything gonna spoof these markets. Should they take their profits, should they not. And then a little bit of news comes out and then some people get spoofed and they come out. The truth of the matter is if they have really gone into detail about what he said. He also went on to say that he is not going to make any changes unless he sees and improvement in the labor market like economy is doing well and just because he may ease does not mean he is going to raise interest rates, cause the majority of the governors said, "We don't plan on raising interest rates until 2015. So I think it's a lot to do about nothing. It was an excuse for these markets to sell of and let people sell it off. The people with money, in my opinion to come in and buy it a cheaper price, so that's all I think this is. I think the markets are still relatively strong. I think if you look at what's happening with short term versus long-term interest rate, you're going to see that the financial industries are going to be a good buy here, so very shortly you're going to be able to turn all of these into an opportunity.

2:18 Tavis Smiley

So is that you were saying, you don't think as some do that his days are numbered?

2:21 Suze Orman

No, no. His days may be numbered and that maybe he won't be here enough and whatever and the truth is that do we care if it's Bernanke, or it's Volk. Like who do we really care that has that job. We just want to know that they know what they are doing and he has done really a relatively great job. He did not cause this back in 2007, 2008, and he did a great job in my opinion of getting us out of a seriously devastating economic situation.

2:52 Tavis Smiley

What are you saying that it really shouldn't matter to the American people who the Fed chair is?

2:56 Suze Orman

Well, it shouldn't matter if we understood any of these. And we really don't. Do you what I mean? It's like very complicated. It's like it used to be the Feds were here. They control inflation, everything in their bare move should not be based on what happens in the stock market. Like the economy is different, Tavis, than the stock market. But it seems that when we start to make a move to help the economy, if it hurts the stock market, then everybody pulls back and blame somebody who has is in charge of the Fed.. What I'm saying...

3:30 Tavis Smiley


3:32 Suze Orman

That's gotten very confusing and for the everyday person out there that's listening to this, they are probably saying, "What the heck is Suze Orman even talking about?"

3:41 Tavis Smiley

We'll comment just a moment to some things that they do understand and we'd know what you're talking about. Before I do that, one last thing about the stock markets that you raised. I think a good number of __03.50__ listening do understand if not what the Fed does. They certainly understand and many of them play the markets. This is an impossible question because the answer I guess could change on any given day. But what you are rid of at the moment as we are heading through the summer, the stock market.

4:07 Suze Orman

I think the stock market, I'm not trying to evade your question. But I think the stock market is really giving us the solution whether it goes up or whether it goes down. Especially for those investors who are looking for income. There is a lot of people out there that made income from their money, whether they are retired, they are about to retire, maybe if your parents who have retired and they currently do not have a place to get income because, treasury aren't give it to them, certificates of deposit aren't going give to them, so regardless of whether the market goes up or down, there are still a tremendous number of stocks paid a very high dividend, taxed in a very favorable way. So I think the stock market is still going to be the answer for many people who are looking for income more so than bonds, more so than other things out there. So depending on your needs, the stock market seems to be the answer for both of you who are listening and you have years till you need this money. You know, in your 20s or in your 30s or even in your 40s. Are you kidding me? Why do you want the stock market to go up. You actually should be happy when the stock market goes down, cause the more it goes down, if your taking your dollars and you're putting a certain amount of dollars every single month in your 401K, into your Roth IRA, your dollars are buying more shares cause as the market goes down, the prices of those shares go down, so you get to buy more shares, so in the long run, when the market turns around and eventually does go up again, you will literally make more money.

6:08 Suze Orman

So Tavis, everybody has it wrong. They want the market to go up, they want the market to go up and I am sitting here going, go down you stocks, go down, go down.

6:12 Tavis Smiley

And I'm thinking, this is just another reason why don't love you on Wall Street. (Laughter) You're like, no Suze, you don't want a roof for the market to go down. Are we making money on Wall Street?

6:25 Suze Orman

Yeah, but I do because if the market goes down, and shares of somebody's stocks giving you good dividends go down, then your yield actually goes up. So you could come out with the 6%, 7%, 8% yield on your money with dividends.

6:41 Tavis Smiley

It makes sense Yeah, it sounds counterintuitive but it makes a lot of sense to me. Let me ask another question about those kinds of Wall Street issues and I'll weave my way into talking about some specific issues that do with the Fed earlier matter to everyday people listening to this program. The last time we were together I talked to you since then. The last time I saw you we were in Washington for the announcement of your card, and as a matter of fact, I really should bring him in there. I'm in my office at Radio Studios, of course, as you in my office. Somebody find Denny Davis right. Bring Denny in right here, right quick. This is my show, so I can do this. There is a young man on my staff named Denny Davis who adores you. And he adores you because he got your card. And I want you just on the spot here. I want him to tell you what happened when he used your card.

7:32 Suze Orman

You know, what's so funny Tavis is that obviously, I'm Suze Orman, and I brought out my own. It's not an endorsement, I put my own hard earned money behind this card, it is called the approved card and for those of you who want to learn about it, go to the approvedcard.com, but it is a prepaid debit card. And there are so many people out there today that still do not qualify for a credit card. They don't even qualify for a bank account or a credit union account and they should have the right to transact business via a piece of plastic, a card. But most of the prepaid debit cards out there are literally printing money for the people who brought out those cards. Their charging you monthly fees and in my opinion are over the top. They can go anywhere from $15 a month to $50 a month. So here I am, I bring out the card, the fees are $3 a month, you will see when your internal, whatever he does there, DNA, tells how you what he has been paying for it and that's up to four cards, so we can get four cards for $3 a month, 75 cents a piece. They are keeping four people and it could literally change your life but nobody wants to look into it cause this woman is endorsing a card and they are believing all the other people there saying, "my card is the highest card in the market today" because people don't you understand, if you use my card, the people that have been in my opinion charging you a fortune to use a card are on business. So I've been so happy for the first time now and I'll tell you, it's been a year a half that we have carried this card on my own pocket.

9:22 Tavis Smiley


9:24 Suze Orman

We finally are almost breaking even every year and a half.

9:28 Tavis Smiley

I'm glad to hear that and I was there with you the day you announced it in Washington, so I've been following the success of this and one doing how the trajectory has been going of late, so...

9:39 Suze Orman

We finally did it. You know, I'm not gonna have to continue to put any, our goal is just to break even. Our goal never was to make a whole lot of money. Our goal was simply to give people a card so that they can take their money out without having a pay-off fee. They could send money to their relatives without having this pay-off fees. They could do, you know, every time they use this, they would know how much they just charged, or not charged, I guess, spent on their thing. So it's fabulous. It's exactly what I want now.

10:11 Tavis Smiley

Let me apologize in advance for the giddiness that you might hear, just a second Suze, we will open up your microphone. First of all, he is from St. Louis and his mama named him after the jazz great. His name is Denny Miles Davis, that is his real full name, Denny Miles Davis. Denny is much more than an intern. He is one of my assistants and helps me to do everything around here. But he was in Washington for the symposium where you appeared. And he went out immediately and got his approved card. I kid you not. I'm sitting here in my studio right now. He has his card pulled out as in his hand. He's grinning ear to ear, but every time I see him, he is pulling out his approved card. So I see him all the time. So he loves you so, Suze. I want you to say hello to one of your biggest fans, Denny Miles Davis.

11:02 Suze Orman

Hi, Denny, Denny, Denny, how are you?

11:03 Denny Davis

How are you doing?

11:04 Suze Orman


11:05 Denny Davis

I am good.

11:06 Suze Orman

So tell me, I've just got to ask you. Remember when I told everybody, it wasn't gonna cost them more than $3 a month. They were gonna be able to do all of these things with that card, have you been able to do it?

11:17 Denny Davis

I've been able to do it. Everything, in my grade at school Everything. More than idea with paying 18% the only interest of a credit card.

11:30 Suze Orman

Yeah, and does it cost you more than $3 a month?

11:34 Denny Davis

No, it's just $3.

11:36 Suze Orman

Which is fine. Cause I know that you know that $3 a month also allows your mama to have a card, two other people to have a card. So, there's so many things you can do with it, but I love that. What do you think? When you hear all these people say. That's the most expensive card I've seen. Suze Orman is just making money out of all of you. What do you think when you hear them say that?

11:55 Denny Davis

I think it's a lie.

11:58 Suze Orman

Yeah, there you go. Isn't it funny?

12:00 Denny Davis

From my experience, it's the cheapest card out there.

12:04 Tavis Smiley

What was it? Cause Denny tells me these stories all the time. They tell me these stories all the time again. So what was your credit score, and just tell me the story. Where you were before you got the card, what happened after you used it?

12:18 Denny Davis

My credit score was 600 and it went up in the past year to 720.

12:21 Suze Orman

Now, truthfully Denny, it did not go up because you were using my card. Cause that's the prepaid debit card. The reason it went up is because you're no longer using a credit card and because you're not using a credit card, you are not carrying a balance on your credit card, so the amount of money that you owe on your credit card to the credit limit has gone down which makes your credit score go up.

12:47 Denny Davis

Because I only use the credit card...

12:50 Suze Orman

That's right. So debit cards to these days still don't count forward a credit score because in the wisdom of and what the credit score in people, they just think that you get yourself in credit card trouble and you pay on time. That should be rewarded by a high credit score.

13:11 Tavis Smiley

So these are the stories working out Suze. I got to know this only because he is one of my assistants and we hang together everyday and where I go he tends to go and he got his cards turning his life around, his credit around, his finances around. And again, I wanna put all of these pieces on the air, but Denny just got pre-approved for a free nice size amount of money to get his first house in Los Angeles.

13:31 Suze Orman

Now Denny, when you do that, if you do that, you better make sure you have at least 10% to 20% put down and you could afford the payments on a 40-year fixed rate mortgage. Don't go get an adjustable rate mortgage and everybody listening right now. If you're about to buy a home, you have to get a fixed mortgage. Do not get an adjustable rate. You will be sorry if you do.

13:53 Tavis Smiley

So Suze, I'm gonna let Denny go. So Denny, you can say goodbye to Suze Orman.

13:55 Suze Orman

Yes, Denny.

13:58 Denny Davis

Okay, thank you so much. And I've been doing this card. (Laughter).

14:03 Tavis Smiley

Hi, get out of my studio, turn that microphone off. So, anyway, Suze, speaking of housing what Denny is trying to do, getting his first house. Tell me how you read, how the audience should read the news of late that housing prices are going back up now?

14:21 Suze Orman

Yeah. Housing prices are definitely increasing. Foreclosures are definitely stabilizing, but you still have to be really careful. Because just because you can buy a house, let's not make the mistake thinking that means you can afford the house. Because if you're buying a house, Tavis, and your payments eat up all of your money, and you don't have any money left and all of a sudden you lose the job and something happens, here we go all over again. Do I think people should take advantage of these low interest rates to buy a home. If they can afford a home, go, you bet, I do. But if you still don't have an 8-month emergency fund, if you don't have still at least 10% to 20% to put down besides the 8-month emergency fund, if you cannot afford a 15 or 30-year fixed rate mortgage, the property taxes, the insurance and maintenance then just continue to rent. People, it's just that simple.

15:32 Tavis Smiley

So that's housing. Let me jump to a couple of issues, I could follow you in a few minutes here. Just the other day on my PBS television programs I've been on and they have you on it a number of times over the years, we had Senator Elizabeth Warren on out of message (crosstalk)

15:46 Suze Orman

I love her.

15:47 Tavis Smiley

I love her, too. And as you may know she is fighting really, really hard against this legislation to keep the banks from doubling the interest rate on student loans.

15:59 Suze Orman

On July 1st, everybody, what Tavis is talking about, the interest rate on student loans go from currently 3.4% back up to 6.8%.

16:12 Tavis Smiley

So she was fighting to hold that down. She lost the fight in the short run. They are coming back to try to do something else again before we actually get to July 1. But what do you make of the fact that in this economy there are folks in Washington who lavishly do not get the fact that if you double the interest rate on student loans, you hurt a lot of people.

16:31 Suze Orman

You know, I was actually in Washington. I met with Senator Warren, and I spoke to quite a few people there that came to hear this little symposium that I gave on student loan. And what's so sad, and I want all of you to think about this. You can get Denny who is just pre-approved for a mortgage probably at either a 3% or a 3.2% interest rate. You can get a car for 0% financing today. The highest interest rate that you are going to pay on any loan out there happens to be the interest rate on student loan. Loans, that in most cases are not dischargeable in bankruptcy. Have all of us lost our minds that we are charging our students, our children, this is your children people, the highest interest rate on a loan of any loan offered currently in the United States of America really?

17:37 Tavis Smiley

And student loan debt as you know, exceeds credit card debt interests.

17:40 Suze Orman

That's right. It's over one trillion dollars, and what's sad again is that the students, when they take out this student loan do not understand how much they are going to have to pay. They don't understand that they are dischargeable in bankruptcy in most cases. They don't understand that when they go into deferment, which means they simply don't pay it, that the student loans goes from 40,000 to 80,000 to 120,000 and that's when they come knocking at your door. So before a student is able to take out a student loan, if you ask me, they should have to be able to pass a student loan exam.

18:21 Tavis Smiley

Makes sense.

18:24 Suze Orman

But it's what Elizabeth Warren is doing is fantastic. All of you should give your support to this brilliant senator that's out there from Massachusetts and she really is one senator that has our back.

18:39 Tavis Smiley

Two other quick things, I'll let you go. It's summertime and it's vacation and gas prices are what they are. What's in you about that and what it means for summer travel.

18:51 Suze Orman

You know, gas prices have been for a long time now, exorbitant. And I'm afraid by then being is high if they've been for as long as they've been. Many people are simply used to the fact that this is what it cost them to do something. But they really have to think about this. Because it really has an impact on your bottom line long run. So sometimes, it's even cheaper to fly than it is to drive somewhere. But if you're going to be buying a new car and if it makes sense, you really should be looking in the high bred or cars that will save you money on gasoline. A lot of them are just a way too expensive to even consider. But there are some of them out there that could really help your bottom line.

19:38 Tavis Smiley

So finally here, I wonder all of these saying, now we couldn't get you, and I am so appreciative of your time. Whether or not you are hopeful about the future of this nation are you bullish still on America given this growing gap between the rich and the rest of us, between the have-guts, and the have-nots. And your approved card is just one of the many things that you are doing. To shrink that gap, just give you sense about the future of this nation.

20:04 Suze Orman

You know Tavis, when we spoke a long time ago, it was 2008 and I wrote a book called the 2009 Action Plan page 6 of that book, I put it in writing. I said that by 2014, 2015, is when we will start to feel all Americans, will start to feel hopeful again. And I'm going to stick by that. So I do see Americans as so resilient and so great and that hopefully with enough understanding of what's going on out there, so that you don't forget what happened to you just a few years ago, and you stick by using cash, you stick by not spending things on money that you know, and using money on things that you really don't need, or want. It may just stupid. I think everything will be okay given another year or two. So I'm hopeful about it. However, and I said this, and I'll keep saying this one liner is a highway into poverty and there is not even a sidewalk out and that is why the world that you and all the people that you're working with. It's so important that poverty is brought to the intention of everybody because it's all of our problems. When your brother or your sister or your friend or your neighbor slips into poverty, it's turning to be a hopeless situation for them and somehow it's gonna come back and affect you cause you're the one who is gonna have to give them money. You're the one who is gonna want to support them.

21:46 Tavis Smiley

It's a great line, Suze, and I have used it time and time again with attribution to you of course, but it is so true that there is a highway in the poverty these days, not even a sidewalk out, but I appreciate the insides that people look to you for, weekend and week out and I'm always wanting to be in conversation with you. This year is of course perennial best selling author, Suze Orman, host on CNBC, creator of the approved card, most importantly, my friend, and just and all-around great woman. Suze, I appreciate your insights as always and I'm so glad to have you on the program.

22:21 Suze Orman

Always my honor, Tavis.

22:24 Tavis Smiley

You're listening to Tavis Talks on the new Tavis Smiley Network on BlogTalk Radio. Thank you for tuning in to his conversation today with Suze Orman. Until next time, thanks for listening....