Suze Orman | Debt Management Advice

Welcome back Suze Orman is here with us on the  InvesDiva Movement where we are aiming to help at   least one million moms and more and dads and aunts  and brothers and grandparents all the people who   can benefit from taking control of their financial  future, there is nobody better to answer questions   about debt and that is Suze Orman she is the  legend in retirement planning and in debt   management actually financial advisor unlike me  she's an actual financial advisor. So Suze thank   you so much for being on our show and taking  the time to actually educating our audience.

Let's do it girlfriend what  do you want to know next? So debt management in America and in any  other country I'm hearing is a big deal, now   not being from America I was born and raised in  Iran I didn't grow up with much but debt wasn't a   thing we wouldn't buy things that we didn't have  money for and then I went to Japan and Japanese   people also like they they don't go into debt like  buying as as as long as I know um so it was a very   new thing to me coming to America finding out that  people going into debt to go to college people   go to bed to buy stuff on their credit card and  then people don't pay their credit card.

I'm like   how does this even make sense so I personally  don't have experience with it so my first question   for you Suze is, what is the biggest mistake  people are making right now when it comes to debt? First, before you understand what you  don't have which is debt you know meaning   the money you don't have that's created  debt you have to understand what money is.   And you have to understand that the goal  of money is to make you feel secure.   Simple, that's it, nothing more needs to be  said. You also need to understand that money   is the greatest teacher when it comes to teaching  you about who you are. Because money cannot do   anything without you, you're the one who has to go  out and get a paycheck you're the one who decides   do you invest that paycheck do you spend it do  you waste it what do you do with it? If you are   walking down the street and you drop $20 it cannot  call out to you and go wait wait you drop me come   back and get me. So money cannot do anything  without you.

So if your money isn't doing what   you want it to do and you find that you are in a  total financial chaotic mess that is because you   yourself are a chaotic mess, your money is just  a mirror and reflecting back to you who you are.   So when you have debt you have debt  because when you feel less than you spend   more than, when you yourself feel like  ugh I'm a nobody I don't have anything   I'll never be anybody I've struggled my whole life  I deserve this and whatever you say to yourself   that all of a sudden translates into you  buying something that you can't afford.   When you feel less than you spend more than  and so when you look at debt the first thing   you have to understand is, this is a statement  of how you feel about who you are this is your   mirror that you're looking at.

That you hate to  look at, that you don't want to pay attention to,   that you don't know how to get out of it, so why  did you create that debt, to begin with? because   I can tell you easily how you get out of debt but  if you can't figure out why you got into debt,   to begin with, you'll get out of debt and get  right back in it again. So you need to look at   debt in a whole different way now anybody can  say oh pay the highest interest rate first,   who cares about any of that truthfully.  What I want you to care about is yourself   and what are you doing in your life to be an  obstacle in your path to financial freedom or   financial independence? And normally it comes  down to the three internal obstacles to wealth   fear, shame, and anger. Those are the three  emotions that cause you to spend more money than   you know you should be spending to do all kinds of  things because you're angry I'm gonna get back at   this person I'm gonna go buy a new car, I'm gonna  do this, I'm gonna do that oh you're at a store   and you see a sale and the sales ending today  and you are afraid that you're going to miss   out on this sale you buy something you  take it home and you never wear it again.   Why is that because when you look at that item  that you bought it reminds you of the fear that   you felt when you purchased it and this is all  going on subconsciously and all of a sudden your   life stops working if you have debt you have to  go within to see why you are doing without that   is why it is so important that you understand  who you are, that you understand why you do what   you do with money? Not in terms of investments and  things like that but why do you buy something when   you can't afford it? why do you have 50,000 pairs  of earrings? Suze Orman still only has one pair   for the past 40 years, I don't need more than that  you can look at any book cover go back to Oprah 20   or 30 years every show I was ever on you'll never  see another pair of earrings besides this.

I don't   have a purse, I don't because I don't carry a  purse and so like why do you need all that stuff   really? So when it comes to debt the most  important thing for you to understand   is when you have credit card debt you are paying  for your present-day desires but your costs   will be your future day needs. There will be  things when you get older that you need but   you can't pay for them or get them because you  paid for your desires when you were younger.   So just think about what I said to you and it's  not the typical answer a financial advisor would   give you. The typical answer would be oh well  there's good debt, there's bad debt pay that   snowball method pay the... no, I don't care how  you get out of debt I care about you understanding   why you got into debt to begin with? What are  you trying to fill up within yourself with the   things that you are buying that are putting  you in debt? that is the question at hand.

That is so powerful and surprised  that people don't know that. oh, they don't know that. People in America don't know that and I'm so  glad that you bring it up and people don't   know that even though you've been saying  this clearly for years and years and years.   But it's about who you are it's about so you  can so it this really is this is a spiritual   thing like money is spiritual and you have  to become the kind of person who's not,   who is not in debt you have to become the  kind of person who earns a lot of money,   and that really is the gist of it is that hey  don't be in debt.

I am okay I'm not going to   be in debt is not gonna fix the problem, the  problem is you, which is something that you were   actually talking about in our first interview  like fixing yourself fixing understanding who   you are um really can be powerful when it  comes to fixing your money issues right? It's the only way to fix your money issues you  cannot if you have money issues, it's because   you have issues because your money can't have  issues without you. So stop blaming your money   for things that you're doing.

Think about it your  money I can rip up twenty dollar bills I could   can't they can't scream they can't go  stop I hurt. You and your money are one. I mean this obviously makes sense but I  have a follow-up question, and that is   college debt? because that is something that again  the society kind of looks like it again in America   like you you just go into college that you have  to go to college and you pay like what do people   do with this do we do they have to continue to do  this? if they already have college debt what to do   because that's a question that I get asked a lot  and not having had college debt my only solution   is that go make more money and but like just learn  how to make more money but what would you say? Well right now student loan debt, so you  have all different kinds of debt you have   mortgage debt you have credit card debt you  have 401k debt and loans sometimes you have   personal debt hopefully you don't have payday  loans but you have all different kinds of debt,   and then you have student loan debt as well.

Out  of all of those debts that you can possibly have,   student loan debt is the most dangerous  debt you can have bar none. Why? because   all those other debts including IRS debt can  be discharged in bankruptcy, you could get   rid of them if you needed to. Student loan  debt is the only debt that you cannot take   through bankruptcy in 99.5 percent of the cases.  So it will follow you to your grave. So therefore   student loan debt is the one debt that you really  really really need excuse me to pay attention to   and to make sure that you are not in default, you  are not in deferment, you are not in forbearance   that you are really dealing with it. Now you  haven't had to deal with your student loan debt   if they're federal student loan debt over the  past year or so and that's going to come to an   end in January because you have been really on  a moratorium granted by the federal government.   Where you aren't being paid in charged  interest right now, and you haven't had   to make any payments, oh shortly you will so  it is really important that you have a plan   of how are you going to pay off your student  loan debt and that's a whole course into itself.

So I do want to have a question   um about debt versus getting funded for something  that is going to generate you more money. Do you think there is a difference? Yeah so right now I've started up my I co-founded  a new company by the name of Securesave and you   can all look at it at and it's  the first employer-sponsored emergency savings   plan for employees, first of its kind. Now I could  have funded it myself but I didn't fund it myself   instead we went for seed funding and everything  and other investors invested in this idea in the   hopes that they're going to make a lot of money  off of it. Right now that's debt so to speak   but not debt that I'm personally responsible  for, I'm responsible for doing the best I could   possibly do to make this company a serious success  so that they win big as well as I win big but most   of all the employees of all the corporations in  the world win bigger, and so that's somehow using   other people's money who are intelligent enough  or not to invest in you and your idea and you   haven't forced them to do it that's their decision  if they want to do it or not great.

Debt when   you're starting your own company you're taking out  credit card debt, you're taking out equity lines   of credit, you're using up all the money that you  have, and if it doesn't work then what? then what?   so if you have an idea that you want to start  and go on your own save the money and you want   to invest just your money but save it that it was  extra money don't go into debt to fund a business,   in my opinion. That's just my opinion. You  know there was that um curves I don't know   if you remember this but it was this big fad of  a franchise of all these women opening up these   these companies where women would go from machine  to machine to machine they were called curves   and it took off like wildfire everybody was  making a fortune and all these women were doing   it and then the whole thing went belly up and  then all these women had absolutely no money.   So just be smart with what you're doing when it  comes to debt also know how to run a business,   if you're taking money from yourself or for  somebody else it's not just base because you   have a good idea and you just want to try this,  you have to do the research you have to do a   profit and loss statement you have to know that  you can carry that business for one or two years   like I expect that we have to carry secure save  although maybe not all the way through 2023   to even start making a profit, but we have the  money to do so.

So just be intelligent with your   ideas and just because you can't find a way to  make a living doesn't mean you start a business.   You start a business because you have a passion  and a desire and a great idea and a business plan   and you know what it's going to cost  and you know all of those things.   Then start something but I would really like to  see you start it with other people's money or a   small business loan or something more than you  yourself going into debt and one last thing on   this and part of the reason of that is there's a  lot of money power attracts money powerlessness   repels it. Just like I said to you a few moments  ago that money can't do anything on its own people   are the ones who buy your products, people are  the ones who hire you and give you a promotion,   and or whatever it may be so when you're powerful  you attract people to you since people control   money you attract money when you're powerless you  repel people. Since people control money you repel   money when you are in debt debt is bondage and  it's the thing that all of you are most afraid of,   so here you are you're in debt and it's now  rendered you powerless but yet you need to be   powerful to attract customers and everything so  it's like this catch-22 that's my thoughts on it.

So good I think the way I went about it at least  was when I was broken almost in a welfare house   was um self-education, educate yourself it  goes directly with what Suze Orman is saying,   it gives you power knowledge gives you power  and you don't have to go in my opinion really   and get a fancy college degree to get that power  to get that knowledge. Like literally knowledge   is now a commodities readily available  for everybody on YouTube, self-educate   and try to find your passion, in my opinion,  everybody needs to have their own business   at this day and age I feel like just working  at corporate America is not going to cut it   learn how to create multiple revenue streams  and the more power the more knowledge you gain   the more you have to give to people and the more  willing people are to give you money to serve them   and it goes round and ha and then hand in hand and  then instead of accumulating that debt you're now   accumulating that compounding effect for  your money to grow and grow and grow and   turn into a million-dollar family.

I'm gonna throw  this out there. And Suze you are like literally   it, you talk about like how to become the person  to earn money and be out of debt and how to get   out of debt you are the whole package. We  cannot thank you enough for your generosity   to be on our show this tiny little show which we  are hoping is going to grow and you guys watching,   you know what to do go ahead and smash that  like button share it with people who need to   hear this they need to change themselves  in order to resolve their money issues   and remember to always Make Your Money  Work For You. I'll see you next time.

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