A few weeks ago, Suze Orman’s team reached out to me and asked if I’d be interested in chatting with Suze on my podcast.
“Duh,” I replied.
Suze Orman is one of the most famous voices in the world of personal finance. From 2002 to 2015, she hosted The Suze Orman Show on CNBC. She’s the author of 10 mega-bestselling books, she wrote a financial column for O, The Oprah Magazine, and she’s made multiple appearances on The Oprah Winfrey Show.
I read her latest book in preparation for the interview, but I felt at a loss for what to ask her. So I turned to my audience, knowing that many of the people who read my blog and listen to my podcast are also Suze fans.
I headed to Twitter and Facebook and asked this community, “What would you like me to ask Suze?”
Dozens of replied flooded in, but one question stood out far ahead of all others in popularity: What does Suze Orman think about the FIRE movement?
I opened with that question. And Suze’s response shocked me.
“I hate it,” she replied. “I hate it. I hate it. I hate it. And let me tell you why.”
That’s a direct quote. (Really.)
She spent the next 30 minutes explaining why she thinks pursuing FIRE could be the biggest mistake of a person’s life.
Yes, she actually used the words “biggest mistake.” That’s also a direct quote. She claimed that you need “$20 [million], $30 [million], $50 [million] or $100 million dollars” in order to retire early. She cited $10 million as a minimum. She said you’d need to plan to live on at least $350,000 per year.
“Two million is nothing,” she said. “It’s nothing. It’s pennies in today’s world, to tell you the truth.”
Well, then.
Why does Suze Orman hate the FIRE movement?
Why does she think that retirement expenses would need to be so sky-high?
And how can the average middle-class person prepare for retirement, given that the majority of Americans don’t make six figures, let alone have portfolios in the multimillions?
Find out in today’s episode.
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Still in the middle of this, but just wanted to pause and drop a line of support. Hearing such a strong, contrarian view from someone who’s spent their life hitting the ground hard and made so much for themselves is great! If anything at all, Suze challenges us to revisit, reassess, potentially implement a warier eye and more conservative safeguards over ourselves for if/when we FI/RE. THank you Paula for airing this- truth will out!
Hi Paula,
I certainly appreciate you going out on a limb with this episode. It’s surely going to be controversial amongst your community.
I am quite enthused about FIRE and the freedom it brings, so of course initially it was difficult to hear Suze state that 2 or 3 million was not enough. However, I do understand the concern she brings to the table – that those who indeed would just retire by 30 and chill may be in for a surprise as life expectancy and the unknown future comes barreling towards us. She notes that health issues may arise, or the unpredictable nature of calamity can throw life for a loop. But I’d argue that we just have to do our best and that FIRE is perhaps a calculated risk as well. But if you’re properly insured and take care of your health within reason, I don’t see why the answer should be, as she says, to work as long as you possibly can.
It’s also quite a slap in the face to the vast majority of the world that will never see anywhere near the amounts she’s stating are nothing (especially in the developing world). I’m sure many, many people would find great pride in having built up, say, $1-2,000,000 and to hear someone say it’s nothing shows how we can fall out of touch with our roots.
However, as you say, FIRE does not imply that you’ll never work again – and retirement doesn’t mean you’re not earning or contributing to society. You’ve simply chosen to prioritize your time and freedom differently. It’s not going to be a popular concept for many people who’ve built their careers around helping people deal with train-wreck finances.
Blogs like this and the FIRE community are out there to demonstrate how the math checks out and how you CAN make it work. I appreciate your wrap up to provide a balanced perspective. Thanks for all you do, Paula.
This was great. Suze makes valid points but I think it’s a mixed bag that she brings. Some of the expenses were certainly inflated. Nursing homes/retirement homes can certainly run much lower than $30,000 a month.
But one of the things that has given me pause before pulling the FIRE trigger is that unexpected expenses DO happen. Especially in the US, where a complicated procedure that gets denied by insurance could easily wipe out $100,000 of your nest egg.
I also think she brings a good point about automation and the affect that could have on social security, tax rates, and what finding a job might look like in another 5 to 10 years.
Paula, you did a great job in this interview. I got a lot out of it. Suze is definitely a big personality and is very confident. Her style can be off-putting, especially for people who have embraced and are excited about the FI method. She’s not for everyone, but there is a lot of good advice in the meat of what she is saying. I think this is a great interview and Suze brings up a lot of important questions to ask about the FI method.
I have decided to not RE because, in addition to enjoying working, of the possibility of unforeseen expenses that come up in life, especially medical costs or market drops. Because things happen. Both Suze and FI have great tactics to ensure financial health. Take what makes sense to you and come up with your own plan.
I love that you got another perspective so different from the FI community. While I don’t agree with everything Suze said, she brought up some good points about worse case scenarios and elder care that we should all consider. Sometimes us in the FI community can err on the side of optimism. However I don’t think she truly understands and the idea of FI and the thought of working in a cubicle til 70 gives me heartburn, thus the reason for saving, investing and living below my means.
Great show Paula (and Suze)! As a (former) long term listener of the Suze Orman show, it was great to hear her again. Normally I listen to this podcast in the morning, but when I saw her name I listened to it almost immediately! (I’m in SE Asia, so when you publish Monday morning in the USA, it’s already Monday evening here.)
I have no troubles whatsoever with Suze’s comments. Her basic thesis is to do a very thorough job of ‘risk analysis’ before making plans that cover ‘the rest of your life’, and I for my money think she is right – you can’t over analyse things like that.
Most people analyse something by taking a current trend and drawing a straight line out for it forever and forever. My experience is that that straight line is the one and only line guaranteed absolutely to be totally wrong all the time, without any failure to be wrong – ever. Things change.
Suze was right to say to not count on social security. They (their Board of Trustees) have been saying for years now (back since the Obama administration) that the trust fund is totally bust in 2034 (see their annual report, released each January). That’s 16 years from now. Sixteen years from now! After that, without tax increases, it will pay only 70% of its outlays right now (i.e. a cheque that is now $1000 a month will be only $700 a month). Those cheques aren’t buying anyone a home in the Hamptons even today. The date also assumes that revenue between now and 2034 doesn’t vary. This despite the fact that we are now in the second longest, and are just months away from being in the longest period ever in US history without a recession. We just passed the longest bull market *ever* record a few weeks ago. See my comment about straight lines in the previous paragraph as to whether I think that will continue.
And Suze touched on the debt. The New York Times ran a piece last week that debt payments for the federal government will exceed the amounts paid to the Pentagon annually within 4 years. I’ve seen other numbers that suggest that Social Security will eat up 100% of all revenues in a few years and the Pentagon, Interest on the Debt and all other government functions (i.e. food stamps, national parks, NASA – everything) will all be done on borrowed money.
As to FIRE, Suze makes a good point about leaving money on the table unnecessarily. However, Roth IRAs, 401ks, etc are not the only retirement vehicles. There are also self-directed IRAs where you don’t have to invest in the stock and bond market but can instead invest in small businesses, or real estate, or businesses overseas. In today’s market these are often the only way to get 8 – 10% or more return-on-investment. Bonds certainly don’t and high-priced stocks don’t either, even if they do pay dividends. That could change in a few years, but likely that will be an expensive change for most.
And I think she raises an interesting point too about contributing to society and living healthy. My own observations are that depriving someone of mental and physical activity (with a touch of stress) has a very negative impact on overall health and longevity. There is probably a longer life to be found in a (somewhat) adversely lived life, over one of perpetual retirement.
Having said that, as a ‘permanent retiree’ that leaves you 60 hours a week to manage your own funds (actively) and work hard to make them grow. Or create your own wealth fund office and manage it. As I just used the ‘work’ word, and the ‘manage’ word too, you can probably through the ‘retiree’ word out the window. Suddenly you are not. But if you are not a wannabe Investment Manager, maybe the cubicle suddenly doesn’t look so bad. Especially if it could be moved to a corner office or something similar in your own company or someone else’s.
If you don’t, for whatever reason, get to optimise your income, the other option is minimising your expenses. Sometimes there are options like living overseas (where costs are much lower and lifestyle quality doesn’t go down), and this includes healthcare and retirement. Some countries have active programmes looking to treat sick people at (much) lower costs than in the US, or hosting retirees with nice pensions.
So in summary, a great podcast. Certainly lots to think about, which is always good. As you two are two of my four most favourite financial/economic sources I am going to try to look for commonality between you. I wouldn’t worry about a negative rating either -certainly not from me.
Bravo! Many points and prospectives covered in your comments. There’s no one solution that will work for everybody. This episode and Drew’s comments demonstrate the importance of everybody to consider their own situation and circumstances and devise a plan that will work best for your own situation.
Absolutely agree with your comment.
Super points made here. It’s not one-sized fits all. Take the pieces from a variety of sources and experts that appeal, make sense for your situation, and feel right to you – then design your own plan. There is no single correct path.
Paula, generally I like your podcast (I subscribe and listen to most episodes), as you sound smart, are clear, and simplify things. However, I did not agree with your preamble or post-script to the Suze Orman interview. Yes, it is likely that she doesn’t fully understand the FIRE movement the way that you do. (I might add that you and like-minded individuals do not own the definition of FIRE, and there is a risk of being in an echo chamber. There are likely tons of people who identify themselves as part of the FIRE movement who really just want to quit their jobs and never work again. So it would be wise to be careful about dismissing others’ understanding. Or maybe just drop the “RE” and call it “FI”, if you want to focus solely on the options it provides.) My main issue with your take on Suze Orman is that you appear to have missed everything she was trying to convey about the risks of longevity. She makes a great point that you may not be able to pick up gig (or other) work in the future if necessary, financial responsibilities may arise in the future that in your youth you can’t yet envision, insurance may not be attainable due to changes in the the market or your circumstances, etc. Her point is that if you are able to work and sock away money, take advantage until your financial profile is fortress-like. It doesn’t mean you are necessarily doomed if you can’t. But why not take advantage when you know you can? I am older than you, but not as old as Suze. I can tell you from experience that despite a top-notch work ethic, strong skills (that I continuously improve) and a second-to-none education, shit happens, and often we can’t bring in the extra money we should easily be able to. Further, as life goes on, we accumulate unforeseen responsibilities, that as Murphy’s Law seems to dictate, kick up a notch just as the ability to earn declines. There are so many financial risks that we have just by virtue of living longer, that we simply don’t see when we are younger. It may not be possible to be “flexible” in lifestyle when the big stuff happens, especially if you’re already living fairly frugally. So if we are able, why not build that financial fortress when we can? And get that employer-provided insurance, while we’re at it? You may not like Suze Orman’s bravado and self-promotion. But she has a ton of wisdom accumulated from experience, and from which we can all benefit. You are doing your listeners a disservice by dismissing her as you do.
Ann Coop, you make some good points that this interview made me consider regarding my own currant employment situation. While I personally see great appeal in joining the FIRE movement and have be aiming for it for some time now, this interview has also made me reconsider my views. I am a federal employee, and as such I have the benefit of carrying afforable health and long term care insurance into retirement and to the end of my and my spouses life of I remain federally employed to retirement age. The interview with Suze makes me realize that I need to seriously weigh the benefits of sticking it out longer than I thought I would be able to with my federal employment and the long term benefits that go along with that versus my desire for freedom from the 9-5 life that does not suit my personality or view of life ideally. Suze may have shifted my life view a little more towards the conservative side. Which admittedly feels a little weird to me.
Hmmm, I didn’t think Paula was being dismissive at all, not sure how you arrived at that.
My take aways, Suzie is a sensationalist and self promoter. The first is hilarious and I had to pause podcast to stop from laughing. The latter I’m kind of in awe of, she is super confident and not afraid to promote her work/self.
Suzie offered some sound advice that I think most folks in this community follow.
However, she doesn’t give you a real plan, it is a bunch of what scenarios to scare you to death. But, I’m sure if we tune into the Oprah channel and buy her book we get the plan. 🙂
I agree and your comment made me laugh. Laughter is good for the soul!
Warren nailed it. Paula did a great job just listening. Cue the mic: “Financial Matriarch of the World!!!!” Oh my!! Good points made throughout if one can get past the sensationalism. I liked Paula’s approach for pre/post script. Suze had no desire to of learn from others regarding the FIRE movement she just wanted to air her opinions. No question she is passionate about sharing with others.
AGREED! Ann Coop, your comments are spot on! Travis, federal employment is a blessing – don’t dismiss your awesome benefits!
Well said. 100% agree.
Here’s my biggest concern about how some are adapting themselves to FIRE – that people are saving for the 4% withdrawal only and do NOT have other income coming in from real estate or other part time work. This, by the way, is not really retiring. It’s a career change. Retiring is living on a fixed income, and some people in the FIRE community are doing this in their 30s and 40s. So much of life is left and it’s so unexpected. How do you weather those storms? When you get older, you do want different things than when you’re 30 or 40. What if you’re not in a financial position to make those changes?
Suze said it at least 100 times. She’s right. Things happen. Retiring early does not account for major life shifts that WILL happen. I hate to pull the “I know better because I’m older” but Being 47, I can tell you that things do, will and have happened that would have bankrupted us had we retired on the 4% withdraw rate plan. Major chronic medical emergencies, deaths of destitute family members (guess who takes on those expenses?) parents who don’t save enough for retirement, house renovations, etc. It’s really hard to plan for these things, but if you have the security of more than just the minimum coming in,
Pulling myself out of my career in my best earning years would be a huge mistake. Instead, my husband and I have deliberately scaled back our overhead living expenses so I can work part time. This gives me the security of keeping my resume building, earning some income, but being able to scale back and do more on my own time. I can travel, take vacations, and even girls’ weekends. None of it is extravagant. Because I have a job and can fund these experiences, AND become debt free and maximize our retirement savings.
As a mother, I have many friends who quit prominent professional positions to be SAHMs and now that their kids are older, they want to go back to work. (And as Suze mentioned,) they can’t get hired in their profession because of the gap in their employment. They are smart women, but their skills are outdated, they lack 10 years of office, management, and computer skills, and employers do not want to train them.
To Suze’s point, if you retire and then have to go back, it will not be on your terms. You will essentially be starting over, and it’s harder when you’re competing against someone who’s 20 years younger than you, who may not have a family, and simply by being younger has more energy. That is a huge concern for me. To earn 1/3 of what I’m earning now, and have to work at a level way below my ability and skills would be dissatisfying and I would be resentful. I’m not saying I’m better than anyone else, but if you’re middle aged and your experience and maturity is discounted, it can be demoralizing.
Personally I found the comments made in this interview to be utterly disgusting. I firmly believe that the FIRE community can be a little money obsessed and I myself have to remind myself to pull back sometimes. But Suze’s comments on savings was beyond anything that I’ve seen advocated within FIRE. The fact that she said to put savings above all else made me sick. What else is the point of money but to experience life.
I have to agree with you. I tried to maintain an open mind and did appreciate Suze’s perspective and I love a good debate – that said her delivery was appalling. I was shocked by how far from reality some of her figures and her perspective on money was from the average person’s life and what truly gives life meaning. I was also shocked by her egotistical self-aggrandizing comments.
Empowerment is key and I am all for empowering oneself and others and having love and compassion for self and others ad seeing a powerful woman, but I honestly found myself wondering if she is actually okay psychologically with the amount of “I am the matriarch of money for the world” kind of comments she made.
I realize this interview was an attempt to be flashy and sell books and maybe help people in some way on Suze’s part but unfortunately I find any interest I had in even taking one of her a books out from the library squashed. She could be a genius when it comes to the market, but her delivery, disrespect, ego, and catastrophizing has turned me off of her work. To echo the words of Charles – disgusting.
Paula I’m grateful that you did this interview. It has given me a new appreciation for my mindful lifestyle and my understand that so many things matter more than money. I do send Suze love and compassion; I really think she needs it.
Oh Paula! I think you are right in that she didn’t quite understand FIRE. At least not in the context that perhaps you and I see it. This has been discussed in the past but if you are in your 30’s or 40’s and have the ability to stop working, chances are that you’ll end up doing something after quitting your 9-5.
Heck, I’d argue that she was FI and that is what allowed her to write the book, go on tour, and seek opportunity. When you mentioned remaining frugal and flexible she does say “ok fine” or something like that. I think that is the key for everyone. FIRE takes flexibility.
I think it’s important for this community to hear this type of feedback though. It’s easy to get excited and assume everything will work out but life is going to throw curve balls. Preparation is a must and not only in the most ideal circumstances. The point is to prepare and remain flexible. She said herself that her mom refused to get long term care insurance. There are steps you can take to hedge your bets. For a lot of us, figuring out health insurance is a big piece in the puzzle.
I focus more on the FI part of FIRE. It gives you options and it’s hard to argue against options. If you want to take some time off to raise a child, care for a parent, or lay on the beach. You can and perhaps you should. It’s people first. But she cannot go on a podcast or show and say ‘sure everyone it’s fine if you want to retire and live off 4%.” That would be foolish on her part. So, take it for what it is – mass advice for the masses.
I LOVE that you did this show. Thank you.
These discussions are always so entertaining to listen to but always so hard to dissect. If you come on a podcast or any other show format, you’ve obviously have an agenda, just like the host will have an agenda. This is only made more complicated by mass appealing guests because they preach the common denominator which usually over simplifies their message.
I didn’t listen to this podcast and have a bad reaction. I happen to both support FIRE and not at the same time if that makes any sense. It’s kind of like I appreciated ready a Tony Robinson book because it was motivational but I’m not spending $5k to be his worshipper at a convention. I like the idea of FIRE because it gives you a point on the horizon, a spot where you can maybe take the foot off the gas and find some financial confidence…but I’m also not an extremist who cuts coupons, only takes vacations on credit card points, and worries about shaving costs at every turn. No thank you. Everything in moderation.
I do get Suze’s fundamental point here. Life throws curve balls. And she is being forceful about her point because she doesn’t want to lose the person that FIRE will backFIRE on (pun intended). It’s kind of like Dave Ramsey is adamantly against debt even though he can probably acknowledge off air that there are people that do handle credit risk responsibly – the point is to be an extremist against it because the mass market doesn’t have an amazing relationship with debt or money for that matter. If they did, he wouldn’t have a show.
I think it’s fairly pointless to take offense to either of their messages even if they are extreme. I agree with Nate Hermanson point that broad generalizations can be such a struggle, especially when you’re dealing with advising people with a range of specific needs and concerns. What I take away from these large personalities are important broad strokes:
1) There’s nothing wrong with achieving financial freedom but if you can make your work fulfilling then keep pushing. You never know what can happen in your life and staying in the job market consistently is a good diversifier against life’s worst catastrophes.
2) You don’t need to listen to Ramsey’s exact investment advice about 4 funds and an assumption of 12% returns – but you do need to be saving a minimum of 15% of your income with some sort of diversification in index funds with low costs attached. The point is invest early and often with low costs and diversification.
3) You can debate about mortgage debt or student debt rates vs. investing until the cows come home. There are mathematical and emotional effects of debt. If you have a poor relationship with money, it’s going to make more sense to crush the debt and never look back. If you have a sensible, focused, healthy relationship with debt – it may be more reasonable for you to use debt as a tool when it comes to deciding investing over paying off debt or even growing a real estate portfolio. But it can’t really be argued, having no debt feels great and in many ways can be more holistically healthy than trying to grow net worth through leverage or hold on to student loans for 30 years just because the market returns net 8% and the loans are at 5%. (Sacrifice seems like most people’s unwillingness to attack debt, but that’s just an anecdotal observation.)
Now…with regards to her personality. I’m not passing any judgments really. She’s a financial celebrity/personality selling to millions of people. She could be super cocky or elitist or whatever, but not sure it matters for the content of the message. Either you take something away that improve your financial life or outlook on life, or you don’t. The message obviously appeals to tons of people. And then there’s people like those in this thread that were turned off by her. I’ve known about her but never listened to her until she “returned” from whatever the hiatus was to tour all these FIRE and financial podcasts (obviously to promote the return). But I truly believe we can take something from every voice of experience and intelligence in this larger financial movement.
I liked many of Suze’s points, specifically disability, long term care and homeowner insurance (fire, flood, hurricane, etc.). The big problem I have is I feel you did her and the audience a disservice. You discussed most of your great counter arguments after the interview/podcast was over. You had a chance to educate her (about how you don’t have to stop earning income or not drawing down portfolio, etc.) and for us to hear her response. I”m not necessarily striving for FIRE, but love many of the concepts. I think if you explained ‘FIRE’ to her more (about having the options to make choices, not retire and ‘do nothing’), it would have been great for her to hear and us her responses to that. It’s funny. I was yelling into the iPad the whole time I was listening, although I was also taking notes about stuff I need to look into. Love that you had her on. It’s always good to hear what other’s points of view are, even if you don’t totally agree. Thanks for the podcast.
I sensed it was hard to get a word in while interviewing Suze. 🙂
I don’t think Suze wanted an education……
Wow! I have to say my husband got 10
minutes into the interview and stopped listening because he was so turned off by Suze’s attitude. He advised me not to listen, but I did anyway expecting not to be very inspired by her. Suze is impressive and her advice while sound, is very pessimistic and patronizing. I do agree with Paula that she doesn’t understand FIRE as most are going to be living off of income while still earning Passive Income and not withdrawing from accounts. I was very annoyed up until around the 40 minute mark that all of Suze’s statements could be summed up to plan for a doomsday scenario and work until you die unless you are a multi millionaire. It seems as though she doesn’t think that people who are savvy enough to reach FI and retire early are carrying Health or other Insurance policies, or at least that’s the impression I got from her.
My husband and I are working towards financial independence so that I can raise our future children and stay at home so was glad to hear she didn’t completely write that off, but it definitely took some time to get there.
Overall, it was good to hear a different perspective and I think Paula did a great job. I think it’s important to always take advice with a grain of salt and find what works best for your own personal goals.
Wow. I haven’t heard about this person before and I sure don’t want to hear her again. She’s like the female version of Donald Trump. There must be something about the American culture that I as a European don’t understand… why do you listen to these smug, narcissistic, yelling people!?
Maybe I’m not used to the crazy American salaries, but if 80k a year isn’t enough then how does the average non FIRE person ever tackle health issues?
Sure am glad that I live in the Netherlands . Taxes may be higher and salaris lower but health care and other support systems for young and old are much better.
I don’t think she was questioning $80k as a salary being enough to handle a health emergency if it strikes you in your working years. But if you stop working when you hit you FIRE minimum, and let’s say that minimum is enough to safely withdraw $80k a year – if you’re only 35 or 40 when you retire and that medical emergency costs you say $50-$100k because it’s uncovered, then you’re drawing down past your safe withdrawal rate.
Now, if you’ve been out of the workforce for several years yet you’re still fairly far away from traditional retirement and even further away from life expectancy, then something like this could severely impact your non-traditional retirement path.
If you were to keep working and making a healthy income up until traditional retirement age or at least much closer with more savings than required by FIRE, you’re insuring yourself a much healthier and less risky opportunity to enjoy retirement. And to your point, yes the US has capitalism with socialism injected in large but limited swaths; and places like Amsterdam are much more socialistic with capitalism injected in.
I like when people say things like “happens all the time!”. Well, what are the statistics? Yes, you do need to think of way out if.. but it’s like “you can get robbed when you travel, happens all the time!” So you shouldn’t travel then? No, you just need to know how to act in this situation. I don’t really appreciate when people have a fear based mentality “what if?” Because then you will never take any action if you think about what if.
Automation will lead to 25% unemployment? Really? Automation forces people to do things that could not be automated (like have a podcast :)) and also lead to new job opportunities. When typing machines were replaced by computers, those people lost jobs, but how many jobs were created instead?
It does seem as though she focuses way more on RE than FI, while I think the community is more about FI and ability to retire and do what you have passion about, just like she said. If you have passion for what you do, than you have no problem working. But a problem is, so many people would prefer not to work where they work and not to have that dependency…
I agree with Drew, there are so many countries where you can live cheaper or much cheaper than US… And as someone who wasn’t born here, 2 million dollars are pennies? There are way too many places in this world, where people live in conditions that are beyond poverty and 2 million dollars would do so much good…just saying.
I like when people say “Happens all the time!” What are the statistics? Yes, I’m all for being prepared, but.. “People get robbed while traveling, happens all the time!” So you should not travel then? No, you just need to know how to act in that situation. Nobody knows what is going to happen.. I don’t really appreciate when people come from fear, because if we think about what if, we will never take any action.
Automation will lead to 25% unemployment? Really? Automation make people to do what automation cannot do, like being creative (and create a podcast :)). As well as, when typing machines were replaced by computers, people lost jobs, but how many jobs were created instead?
It does seem like she focuses more on RE part than FI, while the community, I think is more about FI and have ability not to work, ability to choose where to work etc. And if you are passionate about what you do, then sure, you won’t have problem working, but there are many people who don’t like their jobs…
And I would agree with Drew, there are so many places where you can live much much more cheaper than US, being cared for etc.. not to mention, as someone who wasn’t born in US, 2 millions are pennies? Unfortunately, there are way too many places in this world, where people live in conditions beyond poverty, where 2 million would do so much good…just saying.
It is certainly good to hear opinions other than your own, and I’m all for it, but this just feels as a stream of negativity, when in my opinion, people of fame and power should inspire people, not otherwise.
Love that you did this show. You did a great job Paula staying neutral. Did her team contact you for this interview? If so, maybe they should have done their research on your audience before they asked you to do this. I have a feeling your audience won’t be out buying up her books anytime soon.
My take away- Suze is a multi-millionaire and runs in circles with others just like her. She’s out of touch on what things cost. When she was talking about sending kids to private school, I was just cringing. It’s not necessary for a child to get a good education going to private school. Seemed like all her examples were using figures on the high end of things. Yes, if I’m a multi millionaire, I may send my kids to private school, I may pay for my parents nursing care (at the best facility I can find), but most of us can get by without doing those things.
I agree that Suze’s estimates of costs is not at all realistic. $30k a month for long-term care? The priciest facilities around here are 1/3 of that. $50k annually for private primary school? We’re looking at a great one that’s $6k.
And if half of Suze’s predictions came true, we would be better off joining the prepper movement. Staying employed as long as you can isn’t going to work anyway if her 25% unemployment prediction comes true. On the whole, she came across a lot like Dame Ramsey does, using a lot of hyperbole to get people worked up to the point that they buy whatever the speaker is selling. Listeners should keep in mind that Suze made her money by selling books, not by being a stellar investor.
I admire Paula for being calm and not confrontational about it. Although I did find it funny when Paula asked her why the average Joe making $50k as an employee is better off than the FIRE person.
Sara, are you a parent? Sometimes if public school doesn’t work out, your kid gets bullied, or your child falls behind due to deficiencies in the public school system, or you move to a crappy/dangerous school district because of a new job, it is necessary to put your kid in private school. I’m watching 3 friends go through this now, freaking out about how to pay for $40,000-$50,000 a year for private school. This is totally the “stuff happens” that Suze mentioned.
I’m 47. My near 80-year-old parents are moving into a retirement facility as we speak, to help care for one of them with Parkinson’s. It costs $300,000 down and $8,000 a month. They also have long term care insurance. It’s not super fancy, but not low income either. It’s a respectable place. Fortunately, they are able to pay for it with proceeds from their home sale. I did not expect any of this when I was in my 20s and 30s. Maybe Suze’s expenses are above what most of us would pay, but these are enormous bills to face if you are retired on a fixed income in your 30s. Again, stuff happens.
Paula – Thank you for doing this show!
Personally, I was discussed with Suze’s behavior. My interpretation of the entire episode is that she has not taken any time or effort to understand FI or FIRE, and wanted to use this opportunity as a marketing gimmick to create buzz around her brand. Very disappointing on her part.
agreed.
This was painful to listen to. Obviously Suze is trying to promote her work here. But I really don’t think the FIRE community should be included in her target market. She’s really out of touch. Suze reminds me of overbearing men who like to hear themselves talk and never listen… I listened
to her for an hour cause I was stuck in traffic, then couldn’t stand anymore as I decided that her angry and aggressive presentation was too much of a turnoff.
Paula… I appreciate your willingness to share an opposing viewpoint!
Suze has been out of the game for 3 years. Since then, the FIRE movement has taken away from her market share. She deliberately went on a FIRE podcast and lambasted the movement to get back her market share.
If you think 2M is nothing and you believe you can’t live in 80K a year, then I too have a bridge I want to sell you.
word.
Good luck!
This is a truly hilarious episode, listening to Suze Orman. It reminds me of the the Lucille Bluth meme: “I mean, it’s one banana, Michael. What could it cost? Ten dollars?”
She literally says $50 million is not enough to stop working.
https://media.giphy.com/media/yJu2jIQZgPubm/giphy.gif
Was good to have Suze on. For me, she put a finger on one of the paradoxes of the FIRE community i.e. the community goes to great lengths to optimize everything, yet members who actually do retire early are each leaving hundreds of thousands, if not millions, on the table by retiring several years earlier than optimal. When you think about it, it makes the amounts lost in fees, or gained by utilizing tax-advantaged accounts, etc., seem incredibly trivial. Maybe a FIRE hack is to retire later. 🙂
The point of FIRE is not to have maximal wealth when you die. As Rob Berger of the Doughroller Money podcast says, “The best thing money can buy is financial freedom.” But according to Suze, you must have tens of millions of dollars to be financially free.
Suze stepped on/distracted from her own message, unfortunately. Regarding THE point of FIRE, that may be your view, and it’s a fine one. From podcast to podcast, blog to blog, person to person, it sure does seem to be mean something different to everybody…as perhaps it should. It’s not a cult, is it?
Not to be rude, but it’s not really up for discussion as to whether FIRE is about dying with the most wealth you possibly can. If that was the goal, then you would seek to remain employed and contributing to your portfolio for as long as you possibly could. Retiring early is antithetical to that. What the motivation for FIRE is certainly varies from one person to the next, but getting the biggest possible pile of money certainly can’t be the goal for a rational person.
I don’t think anybody is arguing or even suggested that’s the goal. I don’t think my post suggested that. To the extent that Suze suggested that, and you’re disagreeing with her, then I totally agree with you.
I appreciate you going out on a limb and beigg willing to take some heat on this interview. Suze had some interesting perspectives and it definitely got me thinking.
Unfortunately I wasn’t able to finish her excellent interview because of her reference to suicide – I lost a family member to suicide and personally find it very difficult when it’s brought up. This is not me condemning or complaining – she had a valid and powerful point. I just wish I knew about it heading into the interview so I could skip that particular section and carry on.
Maybe consider adding a trigger warning with that kind of content in your show notes?
Awesome podcast, Paula! Thanks for a taking a risk and bringing on a “contrarian” to the FIRE movement.
Is it just me, or did it sound like Suzy agrees with many of the tenants of FIRE? I heard her say things like: be sure to max out retirement savings vehicles, do something you love, consider unexpected expenses, disability insurance, and long-term care and how these things may affect your finances. All of the points she made were things that I take carefully into consideration when planning a FIRE number/date.
I will say the fear mongering was laid on a bit thick, but she does have her own brand and product to promote and I do appreciate the added insight from someone who is not only at a different point in her own life, but has had the opportunity to hear from so many others.
Having said all this, the podcast has had an effect on me. I will definitely look to continue to grow assets beyond FIRE. Also, I am curious what Suzy thinks of the Trinity study and William Bengen’s conclusions about the 4% rule.
Lastly, I really appreciate Suzy’s comments about the broker/dealer industry and how they take advantage of the average investor. Holding BDs to a fiduciary standard is, in my opinion, one of the most critical issues facing the baby boomers who are retiring in vast numbers. They are getting robbed blind and the government is supporting the BDs in the theft.
Thanks so much for a great podcast! You are my favorite podcaster and I look forward to listening to many more.
Thanks!
Mary
FRUGALinSF
I had the same reaction! She was agreeing (very angrily) with a lot of things the FIRE community is about. Her only contradiction seemed to be that you should be much more wary of catastrophe.
After thinking about it a while, it just strikes me as funny (or should I say “SAD”). She intentionally takes the “I Hate FIRE” message to a FIRE audience. Clearly to get a reaction since we’re all basically singing the same song – save your money and don’t live beyond your means.
Totally unnecessary divisiveness. We’ve been seeing a lot of this kind of self-promotion lately.
I also agree with another commenter here who pointed out that anecdotal evidence is not as useful as statistics (facts). I’m always hoping that women will bring a more logic-based message. This is why I love listening to Paula.
Hi Paula, while some people might feel “disgusted” or “irritated” by Suze’s views, I thought that it was really refreshing to hear (such) a different opinion. I appreciate that she emphasized being ready for the unexpected, and worry that sometimes FIRE people can ignore that aspect. Kudos for having such a cool episode! (To be clear, the rest are also cool.) 🙂
Right on. I think Suze’s delivery was the hardest part. If you distill what she’s saying, though, there is a lot of wisdom in it. I don’t think FI’ers want to be like Suze and work until they’re 90. I don’t either. But in the FIRE movement, there doesn’t seem to be a general thought to prepare for the unexpected. I do think this will backfire for many people in the years to come, and we will begin to hear and see it.
I found her to be quite a fear-monger and a bit narcissistic. She is just aggressively yelling about all the bad things that can happen in your life while doing a heavy dose of self-promotion. I have never found her advice that helpful, it is coming from a place of scarcity. She is using fear to sell her books; she is also a terrible, patronizing conversationalist.
Agree. Suze came across as truly horrible. Hated listening to her and her fear mongering, bragging, yelling and self promotion. She sounded hysterical and slightly crazy. I think she is way out of touch with reality. If $2 million is not enough then 95% of us are doomed!!
Agree, Phoebe!
Paula, You did a beautiful job dealing with a full-of-themselves Snake Oil Salesman. She cares nothing about educating the people who buy her materials. She just cares about scaring the life out of them so that they KEEP buying her materials.
I came back and read a bunch of people’s responses after I posted my initial remarks and it made me think one thing:
People are very polarized about absolutist or generalist when it comes to most things including the financial path. And in doing so, they also hear the most polarizing bits of a message and become guilty of the exact same thing as the guest feature.
These big time financial gurus speak in broad strokes and in very directional ways because if anything, marketing 101 is to focus your content towards your niched down target and bring everyone to the trough. Don’t create the content specifically for multiple demographics.
I can’t honestly say whether Suze Orman is narcissistic, out of touch, or just trying to promote her work so hard that fear-mongering is her best tactic. It could be that some of that is true, none of it is true or all of it is true.
But one thing I’ve noticed about the FIRE community is that it’s just a protective of its own in an extremist way analogous to the way Dave Ramsey is about debt or Suze Orman about whatever her overall message is (as I said earlier, i’ve never listened to her before).
So instead of turning her off, or being disgusted or discarding this episode to the trash heap – why not just take the pieces of what she said that are useful content and discard the rest:
1. Think harder and plan better for contingencies you may feel are long tail risks. That doesn’t mean abandon FIRE if that is your path; it just means maybe factor in some longer tail risk so you can feel even more secure than before.
2. Don’t think about FIRE as pure retirement. And I know by now after listening to tons of podcasts that most people are looking towards what I call soft retirement so they can pursue new careers, more philanthropic pursuits, or other meaningful existences – but there are just as many people that are looking at this milestone as an end to work or income generation in a meaningful way too. And to those people, it’s worth considering not completely abandoning income generating activities because you’re so burnt out by your current job.
Sidenote: Not everyone is cut out or will be even experience average successes at work outside of a corporate or traditional work structure. And that’s okay, but let’s also not pretend that everyone can make money just because other bloggers/podcasters et al have been successful at it. Punching the clock isn’t always fun but for some it’s the better alternative.
3. Her rant about costs of things, inflationary concerns, automation… they may be a little over the top, at least for now. But in order to get people’s attention sometimes you have to stake out a bold position. This goes back to long tail risk, but it’s not a long tail risk to expect inflation to at some point in your lifetime to jump up again. It’s not crazy to worry somewhat about automation even if it’s impacts on your career or lifestyle are 3rd, 4th, or 5th waves away from the initial impact.
I just worry people really easily lock into these ideas. FIRE is a big one. You lock in. It’s exciting, there’s a goalpost with a reward that’s truly special at the end. The community and the podcasters supporting the community speak very highly about the process and its successes. And you stay dialed in rarely ever picking up your head and looking outside. Once you’re in this FIRE world, advice from traditional finance people almost feels sacrosanct. These traditional advisors and their advice to buy mutual funds or do other things against your own interests. But not all traditional financial advice is about purchasing front loaded mutual funds or whole life insurance lol. There are realistic concerns about financial planning and life’s curveballs that run deep and parallel to the experience of a FIRE participant. And although, I would have worded most of what Suze Orman said a bit differently, I also can appreciate the nuance and underlying message without finding myself upset or completely ignoring a competent person that has clearly had her own version of success for 25 yrs.
Very valid feedback. Thanks @Justin B!
Thanks for having Suzie on the show. The FIRE community is often becoming an echo chamber that doesn’t try to learn from other wealth building experiences. And Suzie pointed out a big gap in most FIRE conversation.
My main take-away from Suzie’s thoughts on the FIRE movement, it would be “you need to focus more on risk management.” And she’s absolutely correct on this point.
We have to look past whatever we personally dislike (her traditional financial views, her arrogance, whatever) and see what we can learn here.
We can say “be flexible in your spending” or “work a gig job” or “make money from your hobbies” as much as we want. But it’s not that easy, as a lot of her examples showed. (Feel free to do your own research and adjust the dollar amounts as you see fit, but the point remains.)
So much of the FIRE community talks about building a portfolio of index funds and the 4% rule (or 3% or 5%). But it’s all based on market valuations at the time you retire, and the sequences of returns for the 10 years before and after you retire (since those are your last few “doubling periods”). It’s all predicated on “accepting market risk” which is completely outside your control.
I don’t know about you, but I haven’t taken the reigns so hard in building my FI life just to give up control to the market’s whims. Nor will I be comfortable selling stocks to fund my lifestyle, trying to perfect the actuarial math of spending down my portfolio over 70 years.
So there is a growing counter-Trinity Study movement that accounts for the behavioral psychology of actually “living on 4%” where you have to sell stocks to get your income (or focus on dividend growth, REITs, and MLPs). This is mostly seen by those, like Paula, that talk about cash-flow from real estate. There’s also a separate group focused on semi-passive/lifestyle businesses (such as muses from the 4-hour work week), and a few outliers who talk about other income generating assets (royalties, copyrights, etc).
Living on rental, royalty, and lifestyle business income is a much easier pill to swallow than selling stocks to fund lifestyle expenses.
But, as Suzie points out, even these alternative income sources are generally underinsured (flood, sink holes, mud slides, job and income growth stagnation around your investment properties) or uninsurable (many sources of passive business income).
So, the takeaway from Suzie’s interview is that, as a FIRE community, we need to focus more on risk management. Let’s do that.
Well put.
A well-said and productive comment.
I 100% agree with Suze. I personally work for the feds so I can’t retire until 57 anyway, but even if I didn’t, I would NOT retire early. I would look for work that was fulfilling enough that I didn’t hate. But again I agree with Suze, unless you have about $10 to $20 million I would not be retiring early with $2 million in the United States.
Gina, do you live in a high cost of living area? Because at a very conservative 3% withdrawal rate, $2 million would yield $60k of annual income, which is about the median household income for the U.S. right now. Why would that be insufficient to retire if one simply didn’t want to work any longer?
Kudos to you for listening to someone with a different point of view. As for Suzie….fear mongering at its best. Sorry to have waisted an hour of my life. A little too much “I’m the greatest thing since sliced bread”; A turn off. I think she didnt develop much of a life beyond her work and is trying to stay relevant.
I think she made some really valid arguments regarding lean FIRE.
I agree that her bravado was a big turnoff. She made it sound like she’s coming out of retirement because she is the world’s, especially womens’, financial savior.
I agree the “I am the money matriarch of the world” comment really made me want to vomit.
I hate to be critical and I know she was just making a point that if you stick to it and work hard you can have a lot, but it sounded like she was bragging so much – about the private jet, the 3 years on the island, all her books. That is what made me throw up.
Orman definitely has the experience and can back up what she says with many real life examples. What I couldn’t stand is her patronizing attitude to your listeners and by association, you too Paula !
You and your listeners are intelligent, thoughtful and slightly obsessive linear thinkers; we think about health insurance, disability, saving etc. Where we are smarter than Orman is ideas like ecoarbitrage; her USA centric lifestyle and costs associated with living here were downright nauseating.
Send her to the Dave Ramsey listeners, they will eat it all up !
Orman doesn’t suffer from a lack of self love or self promotion (a huge turn off, she should listen to herself). Her numbers were also overly inflated but she does make multiple excellent points. Life happens, and its full of unfortunate events that money can help you get through. She mentioned health issues, accidents, and the inability to predict the future but you could also add divorce and other family issues like supporting aging parents – another eye opener to me.
I believe many young people take there health for granted. At 50 both my wife and I were both in excellent health. In the last 14 years my wife was diagnosed with a rare auto-immune disease and I have had both knees replaced as well as back surgery. Thanks God I am still working and have excellent health insurance. We didn’t forecast these expensive health issues.
After listening to several FIRE podcasts and talking to folks that are into FIRE I believe they are in many cases naive and will some day come to regret their decision to drop out of the rat race early.
I was uncomfortable with Paula’s comments at the end of the interview. How many people define and understand the FIRE concept exactly as she does?
Orman’s best comment was to find a job you love and enjoy it.
Thank you for posting this! Having been FIRE for just over a year now, I now consider it part of my new “job” to seek out contrarian views on FIRE to see if I need to make any adjustments. I didn’t hear anything from Suze that I haven’t already considered and tried to mitigate against, so I’m relieved at that, but am always eager to hear of potential risks and failure cases from others so I can assess their likelihood and adjust my plans if needed, before they smack me in the face in the real world. Thanks again!
“I am the money matriarch of the world”. Wow. I use to watch her show every week and I’ve read one of her books. She definitely wasn’t my favorite money person but I liked her show enough to watch it (did not like the book). But she just seemed completely out of touch and full of herself in this interview. Even condescending. And as someone else already pointed out she was using fear as a motivator and was just generally pushing her brand/self the whole interview.
While I agree that one needs to be prepared for such things in life and that unexpected things will happen (I have chronic illness and a disabled sibling so I get it) that fear shouldn’t rule your life. And life isn’t all about money. My health problems are actually one of the reasons we are into FIRE. I know I may not always be able to work full time and that led to my husband and I not wanting to be dependent on our incomes. I still want to work of course and plan to but I want the security of knowing we’ll be ok if I can’t for a while or need to cut back. So I think she’s got it completely backwards. A lot of FIRE people have absolutely thought of those things. Had I not had health issues I seriously doubt we would have gone down this path. Other motivators for me are being able to have children and actually spend time with them and to be able to help my disabled sibling and be there for him. And I would guess that most people that are into FIRE have similar reasons/stressors that pushed them to wanting financial freedom.
This just felt like an uninformed brag session from Suze (we get it you live on an island and have infinite millions). She made it seem like unless you are able to amass more than 10 million you won’t be ok. Which is just not true and depressing for most people to hear, not motivating. I am actually surprised by just how full of herself she seems at points in this interview. Again I quote “I am the money matriarch of the world.” That was the point where I wanted to vomit a bit. She’s smart and successful, obviously, but that has clearly gone to her head.
I don’t know what her goal was with this interview other than pushing her brand but it certainly wasn’t motivating and it definitely turned me off of anything she’s involved with. I agree with you 100% Paula. Except I don’t actually think she cared if she understood FIRE properly or not. I got the impression that she wasn’t really listening to what you were saying and just wanted to hear herself talk. As you pointed out, she contradicted herself a few times. Well, what a let down. I actually was excited to hear her take on it!
Bottom line, are you ahead of 90% of retire’s if you have saved $1M for retirment.
YES.
So why not do what you want and retire early, the worst that could happen is you would join the other 90%, the best, you would live the rest of your life comfortably retired.
OH the Horror!
Don’t try to live like suzy orman, she has an extravagant lifestyle, compared to the majority of Americans.
I generally agree with Suze.
And I agree with Paula.
I think in the scheme of things, it came down to semantics. Seeing through the words, I think they are advocating for pretty much the same thing.
Suze said that no amount of money short of “many millions” would enough to retire safely. Paula doesn’t believe that. So no, they are not advocating for “pretty much the same thing.” Things that are different are not the same.
My takeaway is there are CHOICES and ways to go about creating the life you want if you plan, prepare, and expect randomly that things won’t go perfectly as planned. We only get one life, and for some people, Suze’s method works, for other’s FIRE works, or the Mini-Retirement Movement, and the Live where you want to retire movement. For me, I take what I want from each and build what works for me. Take it all in and build your own path. Now as far as Suze, I do think she really beat over our heads she has a new book, she is experienced, her way works ~ although, it didn’t seem she followed that path herself.
Paula,
I have been listening to your show for a while and I thought I loved it. Boy was I wrong! I had no idea the matriarch of money was out there. She is now my queen and she will surely lead me to the promised land! Don’t get me wrong, your show is cute, but her friends have billions and billions and billions of dollars. I will buy her books as soon as I stop typing. I shall brand my chest with an S for Suze. My new aim in life to find her and lick her toes. That, I gathered from the show, is what she expects from your old listeners/ her new readers.
All jokes aside, I really enjoyed this episode. Thanks to Suze for coming on the show. Something I would love to ask her is what dollar value she would put on a year of life in her 20s. If she could buy back a year of 25 year old health, would she? And for how much? I’m curious about this because her resentment for the FIRE community is a total over reaction, especially when most of her opinions actually matched with FIRE philosophies.
Her message seemed to be as follows: Her life is amazing. Her path should be seen as an absolute stunning success story. You should not take breaks. Never stop working. Make as much money as you possibly can. Be amazing, like her.
Her demeanor did not match the message. She was aggressive and angry. That does not seem like the attitude of somebody who actually has had an awesome life and feels successful. She did not appear to be a peaceful or happy person. She even said that she HATES the FIRE community. Why all the hostility? Why hate this group?
She hates FIRE because she has been successful according to every single metric that exists and these ideas challenge her self worth. She has fame, money, and friends (with money by the way, in case you missed that, she has wealthy friends, very wealthy friends). Yet here is the FIRE community saying that anyone can be happy, healthy, and secure while putting waaaay less emphasis on a traditional career. All she hears from the FIRE community is “Hey, sorry about your whole entire life, you blew it. You worked too hard. You have too much money. You don’t have to own an island to be happy.” I don’t feel that way, but I would imagine that is why she came onto the show all guns ablazin’. Something about the FIRE philosophy strikes a nerve and makes her feel like she’s being attacked.
Suze,
You’re fine. You’re successful. Good work. Nobody is attacking you. Enjoy your island.
Cheers,
Peter
I absolutely agree with Peter’s very well-written take on the episode.
Paula, I very much appreciate you having people on your show who provide a counter-argument to what can sometimes be an echo chamber in the personal finance/FI space. I just wish she had more useful things to say. I love to hear guests who intelligently provide a contrarian perspective to often talked-about FIRE ideas, such as Tanja’s warnings about the growth of the FIRE movement and FIRE bloggers during this decade-long bull market and Big ERN’s analytical simulations and conclusion that the “4% rule” should really be more like the “4% (or 3.5%) rule of thumb”.
Back to this episode: Although I felt my gag reflex acting up throughout the hour, I still found it hard to turn away, like when you pass the crazy guy on the street with the signs and bullhorn. I think this episode really shows how fortunate Suze Orman is – that her passion for speaking, feeling important, and sounding the alarm provides a purpose that nets her millions because it is perfectly matched with the stereotypical American societal issues of over-spending, under-saving, and valuing their self-worth and security by the homes they “own” and things they have. She also provides many great examples for aspiring salespeople and politicians of how to provide an answer that lacks any concrete advice or objective data, while at the same time pushing forward an agenda and sales pitch by touching on people’s base fears and insecurities. Take this example, where Paula asks an excellent, straight-forward follow-up question to Suze’s statement of “Be secure in every possible way no matter what happens. That’s the movement I’m out to start here.”:
Paula: “How do you know when you’re secure?”
Suze: “You’re secure when you really don’t have to worry about if you have a job or you don’t have a job, (when) you’re absolutely fine no matter what can happen in your life. When you’re out of debt, when you own your home outright, when you’re fine no matter what catastrophe comes your way. ‘Cause remember, you can own your home outright and it can be blown away by a hurricane, by a flood, and a lot of these houses that you see now that are suffering flood damage because of the hurricane – do you think they’re covered with flood insurance? Or do you think they’ve lost all of the money that they had in their home? Uh huh. You better think about that. Because when the floodwaters go away, mold comes in and now your house has to be destroyed. And most of your policies will not cover you for mold. But then, it’s all right, you’re part of the FIRE movement. You don’t have to worry about it, do you? I’ve seen people who had millions and millions and millions of dollars in real estate that was generating income for them, and then the floods came, and their real estate fell into a sinkhole, or off a cliff in California, or the muds that went through Santa Monica and killed 7 people that I happen to know in multi-million dollar homes. Their homes are gone. They’re gone. Which means the social security is gone. Which means everything is gone, not that they needed it. And now what do their families do? I’ve seen it happen with people who are in their 40s and they had a kid, and now Mommy and everybody is gone and the kid is there all by themselves. Do you have a will? Do you have a trust? Do you have an advanced directive? Do you have a durable power of attorney for healthcare? Have you taken care of what would happen if something happened to you? Who’s going to pay your bills? Who will write your checks? A will isn’t going to help you. Minors can’t inherit money. All your money will go into a blocked account if you left it to your kids until their 18. And then at the age of 18, they’re now no longer minors and if you don’t have an advanced directive and a durable power of attorney for healthcare for them that they’ve signed over for you, if they need your help and they’re in an accident or get sick, you can’t make any decisions for them. These are all the things besides just accumulating money that you best all know about.”
By the end of Suze’s answer, she has you all fired up about insuring your home which you have a multi-million dollar mortgage on and making sure that you still make choices for your kids when they are adults. (“yeah, water can really come from anywhere, whether you live up high or down low! And yeah, if it’s not water, then it could be tornados or fires!”) Then you have to slap yourself and say “wait a minute, I am not over-leveraged on any real-estate properties, I won’t have to go into bankruptcy if my home were to burn down, and I am trying to raise my kids so they can make their own decisions when they are adults!” And you remember that the original (financial) question was: “How do you know when you’re secure?” And you realize you just wasted an hour of your life.
Or not.
Brilliant.
Thanks, Paula. Keep up the good work.
Thanks Forest. I’m going to look into those episodes with other contrarian views. They sound interesting.
Does anybody know of an episode that dives into the macro-economic effects of FIRE? I can’t imagine we’d be able to rely on a 4% safe withdrawal if every person was as frugal as Mr. Money Mustache. I can’t imagine the economy would grow at the same rate. I guess my question is: is it in our best interest to “spread the FIRE” as Paula-P encourages us to do?
Cheers,
Peter
I always wondered about theMacro economics of it too. But because people like Dave Ramsey and Suze Orman still have audiences, I don’t think there will be an impact on the economy anytime soon. Except I do wonder about the labor market being so tight When they talk about the non participating work force, they are talking about me! I should be working based on my age, but I’m not ( at least right now)
Good summation, Peter. I truly hope she is happier than she sounds.
I luv Suze & I miss her show on Sat nights (yes I am a wild child lol).
I know alot of folks have poo pooed her statements on this pod cast. But she confirmed my love of no load index funds, automatic investing + time.
She also confirmed my beliefs that everything I currently have which is quite a nice nest egg because I am a ridiculous saver… it is not enough. According to FIRE I could retire, but I think not.
I love my work & clients so it’s nice to know I’m on the right track. + I couldn’t abandon my clients.
Paula,
I appreciate how you handled that. FI to me isn’t about sitting on a beach forever, it’s just the skill I chose to get really good at and monetize is something I like, but I don’t love it. I look forward to taking some time off and hobby entrepreneurship. It sounds like Suze is wildly passionate about her job and didn’t like her attempt at retirement.
I hope to find something I enjoy with that same sense of purpose that she has.
Orman is an idiot.
Suze – Thank you for your opinion. Paula – Thank you for not losing it and allowing us the opportunity to hear this conversation. When I was growing up, Suze Orman would talk about the importance of starting to save when we were young. We are doing just that! I was so excited to hear this episode. Thank you, Suze, for adding more fuel to my FIRE!
I’m so excited to re-listen to this episode with my husband. I’ve always appreciated your opinion, Suze. I still do. I respectfully (and whole-heartedly) disagree.
Update: My husband listened to the episode and kept yelling at Suze Orman. After he listened to the entire episode, his final response was, “Wow. I thought she would be proud of us.”
At 33 years old and 34 years old, we paid off our first rental property last week. We plan to both quit our careers (surrounded by fluorescent lights) in the next nine months. We’ve saved and listened to advice from really smart people in this community, INCLUDING Suze Orman. We still love her – but we are excited to prove her wrong (and maybe even make her proud).
I can say this about Suze, she checked into a hotel and I was right behind her. It was a big financial conference and she was our keynote speaker. This was 15 years ago and she was at the peak of her fame. The desk clerk did not recognize her and was rude and dismissive. But Suze was patient and gracious. And knowing nothing else about her, it was clear she was a good person, more patient than me. I did not let on that I recognized her, I just smiled the smile frequent travelers exchange. But I’ve been a fan ever since. You can tell a lot about someone by how they treat those they can treat how they wish. She’s solid in my opinion.
*applause*
I love that the interview with Suze makes me consider the potential life catastrophies, tax considerations and that she has made me reconsider my priorities and the planning that I need to consider. However, I also don’t believe Suze fully grasps what the FIRE community is striving to achieve. I do believe she points out some important considerations that some in the community are overlooking. And this episode has me stepping back and considering weather I should be striving to achieve FIRE or if I should be striving to find the motivation and benefits of sticking with my job for the long term benefits that it will provide me. Life is a constant balancing act that requires continuous re-evaluation. I also feel pretty put off by the salesmanship that Suze exudes. She unabashedly builds on our emotions about the potential catastrophic events that life may or may not hold for us in order to sell her book and to dismiss the desire to achieve the FIRE lifestyle. Feeling conflicted! But I feel pretty confident about her motivation for appearing on the show. It also makes me question Paula’s motives for having the guests she chooses on her show. Featuring those who have a book to sell? Or presenting unbiased, well informed views?
Paula, thanks for having Suze on the show, she was my inspiration before i discovered ‘FIRE’ and she set me up for ‘FIRE’. What Suze says is not ‘wrong’, she agrees with having a nest egg, she just doesn’t want people to fail, that’s toally fair. I follow bloggers who preach FIRE and who actively earn an income through their passion projects, gigs, blogs, etc. Every blogger I follow is following Suze’s advice, which I got as ‘don’t draw down on your savings/investments and rely on only that as your income’.
When it comes to medical care in the US, it is a total unkown. I exercise, eat well, am fairly healthy and still spent $3,500 on a sprained ankle – I have an 80/20 plan. My neighbor is young and perfectly healthy, but an unisured motorist hit him and his 2 kids, car caught on fire and they’re lucky to be alive, but medical insurance is not going to cover all the surgeries they have had and time in the hospital – so much for being ‘healthy and taking care of themselves’.
We can all learn a bit from Suze’s cautionary advice and adjust our plans accordingly – I don’t think we all need 20 mil, but more than bare bones FIRE.
Yes, I think the biggest take away from this episode is that FIRE needs to account for the unexpected. It does not do a good job of that at all.
Crazy old woman, in what world she lives in? The way she talks even if 99,99% of people work until the day of their death they won’t ever have money to retire. This lady makes money by being controversial and saying disgusting things like this, it’s her think and let it be, IMO it was a disservice to bring her to the podcast, the only place I could ever see her been useful is on a debate face to face with MMM….
Geez, Suze, “Hate” is a strong word!
There are things I agree with though. You shouldn’t sit back and sip pina coladas with your $1M or $2M. You should continue to pursue passion projects and generate cash flow after early retirement. Real estate passive income comes to mind. Starting a blog like Mr. Money Mustache did – great safety net there.
To answer the question, “What is the definition of FIRE?” It’s the ability to say “F-You!” to the corporate sling. But you better have a Plan B to keep productive. We’re not a lie-in-bed and eat bon-bons crowd here.
Nice catch, Paula!
I like SuzeOrman and she made a strong influence on me along with FIRE bloggers but she seemed too negative in this interview and some of her (extreme) points did not seem logical. But yes – medical expenses (in the USA) is the wild card. This should not be news to everyone. But other (first world) countries have a different approach to this and they seem to be doing well, if not better. I FI/RE’d last year at age 48 (US-based) and been traveling ever since. And I am now working on moving to France to significantly reduce the risk of getting wiped out by medical catastrophe expenses. Recent changes in France made it easier for early retirees to move to France, though you still have to pay in to access their national health insurance but at a much reduced cost compared to ACA. Will consider moving back to US when I am Medicare eligible. I am pretty much exercising geographic arbitrage, which is a key advantage if you have passive income from investments and can live anywhere!
Hi Nooj – That’s so great that you’ve FIRE’d and you’re traveling! Thanks for mentioning the France arbitrage idea. I’m going to look into this. May I ask how much it costs to live there?
Thanks for posting your comments!
Hi Paula,
I loved this interview with Suze Orman, she has been my mentor for a long time. I have read most of her books and learned a lot from it. On the other hand, I love your podcast; I discovered your podcast just 6 months ago and it’s so informative and clear. I see both points of view and I believe that in order to have a great life I should have a combination of both ( Suze and you) ways to financial freedom, and security for my future.
I really appreciate that you and Suze share all this knowledge.
Thank you.
It was a great episode. Just because I don’t I agree with someone’s point of view I won’t knock a whole episode. A lot of the concerns Suze brings to the table are valid, specially in this country. I agree with a lot of the FIRE movement, but I agree with Suze a bit more.
I just turned 41 and have been helping/supporting my dad for almost a decade now. In a way a I’m lucky he lives in a third country because expenses are the cheaper and the dollar goes further. I would not be able to afford it if he lived here. Suze’s point on healthcare and illness is spot on. I experience this last year with my wife when she experience a health scare.
I think there is a lot of confusion on the surface with the FIRE movement. I also thought some of these people would retire at 30 and never work again. I never thought 1 or 2 million dollars would be enough for the next 40 or 50 years. Also I think a lot of them make it look so easy where they go travelling non stop around the world and sipping margaritas.
It was a great episode Paula, keep it up. BTW you have a great voice.
Paula,
I am late to and for FIRE but I believe in the movement and I want to thank you for the episode. I just wanted to give you my major criticism of the Suze Orman approach.
My major concern with the Suze Orman approach is she doesn’t detail the costs of having money that is earned through income. It is not only that we have a progressive tax structure but other costs are based on income.
#1) College. I have an 18 year old daughter who will likely go out of state for college. FAFSA for college is based on income, not assets. So when Suze Orman asks “How are you going to spend $250,000 to send your kid to Harvard on $60,000 to $80,000?” Well, you don’t spend nearly that much. For instance Harvard is free if your family income is less than 65K, Dartmouth is free if your family income is less than 100k. Stanford is free for family income less than 125k. (https://www.collegeraptor.com/find-colleges/articles/affordability-college-cost/these-10-expensive-colleges-have-free-tuition-or-full-ride-scholarships-for-middle-class-families/) Thus, in some respects you can save a quarter of a million dollars if your family income is less than 100k.
#2) Health insurance. It is a financial cliff based on 400% poverty level. Thus, with a higher income of 100k a family of 3 could spend $19,979 a year on health insurance for a silver plan with a significant deductible. This would drop to $4780 a year if the family income was 50k (information from Henry Kaiser Family Foundation Health Insurance Marketplace). That’s a “savings” of $16,000 a year for the same coverage.
#3) The “max it out” problem. The bulk of my money is in traditional 401k, 403b and IRAS. If I hold this to 70 and 1/2 and have to take the Required Minimum Distribution (RMD), then the RMD would tax 85% of Social Security, plus considerably increase Medicare and Medicare Part D concerns and I wouldn’t have control over how to dispense the money. This issue is causing me considerable grief as I am trying to find ways to convert the traditional IRAs to ROTHs. The problem, of course, is the tax consequences. The most effective ROTH strategy that I have seen at the Root of Good and at Mad Fientist, show that it is most beneficial to make such a transition when you have no or very little earned income. But creating such a plan takes considerable work and forethought.
#4) Freedom. Paula, unlike you, I have never been to Burning Man (or many other places). But I would like to. Many people make such trips because they prize and use the freedom they have acquired through Financial Independence to see such sights. Freedom is expensive — not necessarily in terms of money but in terms of time, dedication and planning. But it is an expense that is personally valued and appreciated. That is true wealth, in my opinion.
Just my thoughts,
David Lippman
FIRE is an alluring acronym, but it can lead to some misunderstanding, especially for those who are just focused on the retire early part. If I were to re-brand the movement, I would adopt two other acronyms – FDLO (Financial Dependence, Limited Options, FIMO (Financial Independence, Many Options). If FDLO and FIMO were the branding focus, I think Suze would be fine with it. FIMO basically asserts that if you can reach Financial Independence, retiring is one of the many options available to you.
I have much respect for Suze Orman because all the cautionary points she makes is just real world truth. While there are different definitions, I think the most real world definition is when your passive income earned from your assets (not from your work) are enough to cover all your known living expenses, and where you have a large enough financial cushion to cover any unknown and unforeseen expenses. I think even Suze would be fine with that definition. We can pretty much calculate for the known living expenses. But as Suze cautioned, it’s the unknown and unforeseen expenses that none of us can accurately calculate, so ever building, ever compound our assets and income is really the best way to cope with this uncertainty.
Woah, this was interesting.
Suze knew exactly how to get people talking with this topic, whether positive or negative. But she did make some good points too. I don’t necessarily agree with everything said, but I took it as her warning everyone to be cautious and be as prepared as possible.
I do think the costs of certain things she mentioned were higher than some costs I’ve seen.
Either way, awesome podcast Paula!
Thank you for urging listeners to respond to the Suze Orman episode. What I found disappointing was her low opinion of your listeners. Or it could have been her very incorrect assumption that those interested in FIRE and financial responsibility have a narrow understanding of what the pursuit of financial independence is.
Thank you, Paula, for always being quick to point out in conversations that your listeners are very educated and very motivated. I mostly enjoyed listening to Suze’s words of caution, but it got frustrating and exhausting to hear her repeatedly tout, “Bet you didn’t think of that!” She reminded me of a most nagging, tattle-tale at elementary school recess! It also made me realize that she didn’t prepare well enough for this interview; rather, her appearance on Afford Anything was self-serving.
No, Suze Orman, most of Afford Anything’s listeners HAVE thought of that!
I agree with much of what was already said about this interview. Suze makes some valid points about catastrophe that should be accounted for, while also making some outlandish assumptions about how much you need to live on in – does one really need to send their child to a private school for 50k a year? I can’t think of any reasonable middle class family that could consider this in good conscience.
But very early on in the interview, as she is stating why she hate FIRE so much, she seems confused about the compounding interest. She correctly states that money invested earlier will compound more than money invested later. However, she then goes on to say that to retire early “wastes” those compounding years. Maybe true if you’re drawing down on a traditional investment account, but for a tax-deferred IRA that you can’t touch without penalty, this is not true. In my back-of-the-envelope calculations, if you max out a traditional IRA starting at 22, you would have 70%-80% of the balance by stopping at 35-40 (respectively) as you would if you worked all the way up until 60. In this case, is it worth potentially working at a job you don’t enjoy for 20-25 more years for the extra 20-30%? I think there’s probably a sweet spot in there somewhere that is different for each person.
I’ve only been looking into this FI idea for a month or so, but most of what I’ve read encourages maxing out tax-deferred IRAs, then putting post-tax money into an investment account to live on until you can draw from your IRA. Live well below your means (which Suze advocates for, as well), invest the extras, find passionate work, etc.
Holy cow. Just in the first few minutes she says a ton of ridiculous stuff. “As you get older things happen… and when you’re younger. Hit by a car, fall down on the ice, get sick, get cancer.” Ummm… ever heard of emergency funds and health insurance???
“If a catastrophe happens or something goes wrong what will you do?” Ummm use emergency funds and even draw on the investments if needed…
“Spent 2.5 million dollars on my mom”. Guess she didn’t have long term care insurance…
Is she forgetting that the FI part of FI/RE is “financially independent”?
“When people are no longer working because machines have replaced all of us…”. Ok now she’s just making herself sound old. Give me a break. There will never be NO human workers at all contributing to the economy. What a bunch of conspiracy theory thinking.
“….there will be nobody paying taxes into the tax system so brackets will go up”. same point as above.
“the money won’t be there for Social Security (in the future where all workers are robots or AI)” lady where have you been the last 15+ years? SS is ALREADY broke! and it has nothing to do with AI!!!
SMH. I don’t know if I can keep listening to this and that was just the first 2 1/2 minutes….
Even without long-term care insurance, spending $350k annually (the number Suze quoted) is obscenely high. And even if the “AI is going to eliminate human workers” idea was true, that should be pushing people toward becoming FI now!
I think that Suze just got bored with her retirement and missed being in the spotlight. She’s now got to find a way to make herself relevant somehow. Maybe if she keeps telling people that she’s the ‘money matriach of the world’ that someone will believe it.
“Nobody has talked to more money about people in this world than me…. 10K emails a week”.
I have a feeling Dave Ramsey would take issue with that…
At age 52, I’m somewhere in the middle on all of this. I often hear people who are in their 20’s and 30’s and in the FIRE movement state somewhat arrogantly, “What’s the worst that will happen? I’ll have to get a job?” And I think that is a naïve view. There are a lot of worst things that could happen. Not having worked for some number of years could make it hard to get back into the job market. Employers are suspect of holes in a resume and also of loss of skills during a period of not being employed. This happened to me two years ago after only a few months of unemployment after my company reorganized. Or, as Suze stated, there could be a medical or family crisis. Relying on a bare bones 4% index fund stash at thirty-something is, in my opinion, a risky bet. But I’ve been through a few personal crises and a few stock market crashes in my adult life. I have lived and learned. My FI goal is cash flow and a good-sized cushion.
On the other hand, I also thought that Suze was way off base with her grand numbers and ‘having seen it all’. If she thinks most people, particularly frugal people, can’t get by on $80,000 a year, she is very out of touch. Just because she paid for what must have been a Taj Mahal nursing home, does not mean that the average person will be paying $30,000 a month for care for their parent. And the prices she named for private elementary and high school educations? I don’t think any FIRE proponents are going to be looking at those schools or a fully-funded private college education, so they don’t need to factor that into their FIRE number.
Additionally, I felt she kept contradicting herself and the bragging was interminable. We get it – she sold a lot of books and probably has a tax bill coming due on her private island, so she needs us all to buy her new book so she doesn’t have to tap into her millions upon millions of dollars. But props to her for talking about the conflicts of interest in the investment houses.
Finally, kudos to Paula for handling the rant and ramble very graciously. As for me, I’m not discouraged from my FI goal. Sitting here in this cubicle until I’m 70 is not my life plan. I’m about to visit my 50th state and then start a new bucket list!
Just to touch on your first comment about possibly having to re enter the work force. Keep in mind that your current job while working toward FI must pay for living expenses plus savings. Once FI, you only need to cover your expenses in a worst case scenario. So if at some point in retirement you’re nest egg isn’t looking healthy, how hard would it be to pick up even a part time job to cover some / most of your yearly expenses and let it regrow? “Back to work” doesn’t have to mean “back to my career.”
Obviously I can’t speak for everyone that has said that. But that’s how I interpret their statement.
– Cheers
I love, love, love the fire community. It has taught us well.
We were on our way to fire then our daughter was diagnosed with MS. We now care for her and 2 small children because her husband abandoned her. Any sort of retirement is off the table due to our new life duties. Won’t happen to everyone, I know. Doesn’t mean you shouldn’t have goals it just means that you have to be resilient an adapt to whatever life brings you.
I will be 75 before the last child is launched. Suze, of course, is not always right but don’t misunderstand what she is saying. A young person has no idea what is ahead. Doesn’t mean you shouldn’t retire. Just be aware of how life can go versus how you wish it. You’ll be fine. It’s just a little wisdom from someone who is older.
Some people struggle with their delivery, some people struggle with their listening skills. Be grateful to have been delivered the “other” side of the story to chew on.
Suzy sounds neurotic. As if not having a job means a person has no purpose. She sounds like Trump every other word seems to be I’ve seen this or that, Trump say believe me. She starts off with you need 10 million to retire but that 50k a year meter reader example will never have 10 million. She’s just trying to sell herself and her point of view and she is very condescending about other points of view. I really don’t care that she lives on an island with a boat and spent 30k a month on her mom’s care. These are all decisions she made. Trust me I have taken care of and continue to take care of elderly parents and grandparents, I know the cost of care. She talks about frugality and living below your means but she had 5 homes, she’s a hypocrite. She touts buying your needs not your wants but she certainly doesn’t listen to her own advise.
What I found disconcerting is Paula Pant’s comments at the end of the podcast. Targeting and achieving a large savings amount at a young age is indeed laudable and desirable. It does provide one with more options. No question. Where it gets tricky is when you are solely dependent on 1 or 1.5 million for the next 50 or more years, with a lot of unknowns. Large savings (don’t want to call it Financial Independence) based on good saving habits like living below one’s means does help to deal with inevitable s like temporary job loss or when one has to go back to school or pursue a different career path or go after another passion resulting in less/no income for a year or 2. It may not provide true financial independence for decades to come without a supplementary income stream. Reason being, life is not a straight line and stuff happens that one cannot anticipate in the present. Yes, 4% withdrawal rate may be sustainable. To be more certain, some experts recommend 3.5%. But real question is whether income from 3.5% is enough for every year over the next 50 years, under different conditions. The answer is likely not, for most people. I would think that this is well known to most of the FIRE bloggers but they cleverly try to gloss over this point or even mislead. FIRE as a concept concept needs to evolve more and be based on more data points over 10 or more years. It is dangerous if each individual does not think hard taking into account all possibilities before deciding that they are financially independent and can retire completely. Of course, the odds get better when one gets older (into the 50’s) but targeting a retirement lifestyle with no or very little income starting at age 30 based on 1 or 2 million dollars is dangerous. I feel that this is what Suzie Orman was pointing out but she exaggerated quite a bit in the process. Her essential points are on the mark though.
Even with a healthy dose of skepticism toward’s Suze’s estimates, she is basically just arguing against ‘lean FIRE’ and arguing for ‘fat FIRE’ instead. If she said as much without all of the hyperbole and ranting about $350k annually to pay for long-term care and her private island, I think that many here would be more agreeable with her.
I am all about the FIRE but I understand Suze’s point about being prepared for the unknown. I was surprised that she didn’t mention the elevated instances of depression when people loses connections that they tend to get from work. Finding a new passion is critical to your longevity if your goal is FIRE.
I discovered Suze Orman early in my personal finance “journey”. She set me straight about the ABSOLUTE NEED for estate planning and retirement planning. I thank her for that.
HOWEVER
I think who ever said she’s like a female version of Donald Trump nailed it. I had to stop listening. Sorry Paula, please take no offense and I certainly won’t diss your show, but I can’t listen to her any more than I can listen to Trump. Self-aggrandizing… Patronizing… Gross generalizations… Sensationalist.. Inflexible…
It’s not that I don’t think she understands the FIRE/FI community, but I don’t think she understands the audience and participants of the FIRE/FI community. She viciously underestimates their education, skill and talents. Many, many participants are not just tech-competent, but tech-savvy. It’s possible that one reason why Orman is so freaked out about the FIRE movement (and the future in general) is because she doesn’t understand it’s tech ability or how the FIRE movement leverages tech knowledge to move ahead collectively or as individuals.
She also underestimates our financial and life skills savviness. We’re an educated and alert bunch. In fact it’s sort of a prerequisite to even find and participate in the FIRE movement. None of what she said (in the ten minutes I could stand to listen) is news to me. And ironically, it’s not news to me because I had through a few of her books years ago…
Her information was the start of a process whereas the FIRE movement/lifestyle is concretely more advanced.
There is a saying: Out with the Old, In with the New.
Good bye Suze…
I loved Suze’s view. She is not well versed in the nuances of FIRE lifestyle but that’s maybe the community’s fault for not clearly communicating that you can work after hitting FI number (as you mention Paula). But I found I learned a lot about things I never considered because ppl in the FI community never discussed these issues (long-term care, etc.).
Funny coincidence that Joe Saul-Sehy touches on some of the same issues around the same time (something in the air?) — maybe there is something to learn from these financial advisors’ experiences with coaching people who retire. Early retirement still includes normal retirement in it.
https://www.biggerpockets.com/renewsblog/biggerpockets-money-podcast-40-taking-command-of-your-finances-by-understanding-and-controlling-money-with-Joe-Saul-Sehy/
By the way, Paula, great job keeping your composure during the interview. You’re a pro.
Your end comments absolutely nailed it. The beauty of FIRE is that if you pursue it, but never achieve it, you will still be putting yourself in a position to have more options. FIRE really is all about having more options, because when you’re 100% dependent on a job for income you have very few options and even fewer when you lose your job. My favorite quote from Timothy Ferriss “Options – the ability to choose – is real power.” has been my guiding mantra throughout my own passive income journey.
FI/FIRE isn’t the travel poster image of lounging on a beach sipping mai tais all day, but the burning desire to be less dependent/vulnerable and having more choices in life .
I do agree with some of her points in regards to working longer. One down turn will derail your 4% withdraw rate. Why dont you just retire from whatever job that leads you to FIRE at 40. Then find that next job your passionate about and earn a salary until your 70. But on your terms, she is so braggadocios I guess if we just buy her book, watch her on Oprah and pray at the alter of the great Suze all will be well.
I can appreciate Suze Orman’s perspective. She has lived the life. She is really providing an alternative point of view to personal finance.
We can’t really fault her for her perspective on the FIRE movement, although limited because early retirement is not quitting work all together. It’s about putting yourself in a situation to hedge against the ups and downs of the market.
The 4% rule should only be looked at as part of the retirement strategy.
To Suze’s credit she did say, “work as long as you possibly can, in an area you love…”
And to my knowledge healthcare is still a big question mark for the FIRE movement.
I enjoyed this episode Paula! Thanks for bringing a refreshing, outside view on the FIRE movement that I’m sure will challenge us all to make sure we really do stay on top of everything we are building now and planning for the future.
The comments are so on point that I have little to add, so all I will say is that Suze Orman’s biggest issue (narcissism aside) is that she will never have enough, and that’s far worse than retiring on 50 or 80 or 100k.
To retire young, you don’t need at least $5m. I know because I retired young and was worth about $5m at the time. I invest in real estate and dividend stocks, and the income from these investments is very steady and reliably exceeds my costs. SO, I had a pretty high savings rate when I retired – I reinvested about 40% of my after-tax dividend and rental income each month into more income producing assets. Plus, the companies I invest in raised dividends too, and I was able to raise rents on the properties I owned. Each time the income got larger, I had more to reinvest into income producing assets, and the income just grew and grew at an exponential pace. THEN, I moved to Portugal and cut my living expenses in half. At this point, I pull in over 3 times my average living expenses and the income is growing at about 12% a year on average (whereas my living expenses are relatively flat). At this point, the main problem I face is that my income is too high relative to my needs… and the spread between what I earn and what I want to spend is only getting bigger and bigger each year. I’ve been retired for over 6 years, haven’t withdrawn a penny of principal, and as much as I appreciate Ms. Orman’s warning about accidents and sickness and so forth, I’m insured about 6 ways to Sunday and keep a sizeable emergency fund that could last me for years.
Maybe if I wanted to drive a Porsche or live in Palo Alto in a 5 bedroom house, I’d have some financial problems. I’m just basically a normal dude, though, and don’t want that kind of stuff. I’d say that if you are someone like me, just a regular guy or girl who doesn’t wear Prada or pine for a private jet, you could retire on a fraction of $5m. I say that if you can just live on dividend income, never touch principal, and afford to save 10% of your income each year, you’re in fabulous shape. If you can live on $60k a year, and invest in some dividend growth ETFs, some preferred stock and REIT ETFs and maybe a bond ETFs, all at a combined 3.5% yield, by my math you’d need $1,886,000 in liquid assets, plus let’s say $120,000 in emergency cash. Toss in some real estate equity for your primary residence, and if you live in a reasonably priced jurisdiction, maybe you could retire early with about $2,200,000 or $2,300,000 and feel pretty safe.
Needless to say, if you can do some work in retirement and bring in, let’s say, $20k a year, that number goes down. If you are willing to take on some risk, or put in sweat equity running some rental real estate, you could retire on far less than that – maybe $1,300,000 or so. I have friends who bought run down buildings in Lisbon, renovated them and rent out the apartments on Air B&B. They “retired” with $600,000 between the two of them – although it’s hard to call what they do “retirement” since they were working 80 hours a week managing their properties. Ten years of that “retirement” and they are worth over $12,000,000. Sometimes “retiring” is the best way to get rich.
Island?? Private jet?? 3 years of not working???
Now shes back?????
Promoting a new book and hitting all the podcast that she can with a guest appearance on the Oprah talk show…..
Sounds like Suze needs money and has been living beyond her means.
Maybe she do more listening to some of the FIRE podcasts instead of talking….
It is impossible to take ALL of Suze’s attacks on FIRE at face value. She brings valid points in that we always need to plan and budget for the unexpected, but I would not to jump on the deep end of FIRE hate like she does in the interview. She is certainly not a FIRE expert, fan, or advocate and her lifestyle is already outside of the range that most FIRE community members are comfortable with. FIRE places a higher value on owning your time rather than slaving away until just before your best years are gone or you die. If you reach FI and decide to work, it is a choice and not an obligation. By living below our means, many of us that have reached FIRE are able to live a life that is dedicated to what we like and not defined by the traditional American model that Suze promotes – live to work. We are better served by surrounding ourselves by savvy financial experts that, instead of finding faults on FIRE lifestyle are able to find creative ans sound ways to make LIFE a reality. FIRE life can range from living a simple, low cost life to living an obscene life of luxury. The choice is on the individual and dependent on their portfolio size. I traded money for being the owner of my time; and I do not regret it. The Suze definition of ability to do FIRE are based on outrageous budgets, dreamy recommendations of work on what you love (sure!) and an overly pessimistic outlook that will render just about every person unable to ever retire early. To that I say – HELL NO! I chose to be successful on the Bob Dylan definition – “A man is a success if he gets up in the morning and gets to bed at night, and in between he does what he wants to do.” In that respect, I am a success and so are my fellow FIRE tribe members.
Not sure it is a good philosophy to live in fear and trading away your life in order to plan for the improbable. Suze invested a lot of time with stories that could happen but are unlikely. People who live in fear trade away their life to the man and are easily controlled.
Not everyone works because it is their passion. They work for a paycheck in exchange for their time. When you have enough it is great to have your life back to use as you wish.
Clark Howard weighed in on the discussion on his Oct 3 podcast. https://clark.com/podcasts/10-3-18-holiday-hiring-moviepass-mega-bungle-suze-orman-makes-silly-retirement-remarks/
Spoiler alert. He named the segment “Suze Orman makes silly retirement remarks”. He was one of our original FIRE individuals, retiring at 31. He was a member of FIRE back in the days that they were called Max Savers. I have been listening to his shows for decades. I would trust his advise any day over Suze Trump’s carnival show.
Great podcast Paula! Congrats for getting her on and sparking a discussion.
I agree w/ Suze’s views on bad things happening that cost money as we age. It’s better to have more and be safer than sorry. I’ve come across several people who retired early because it was the trendy thing to do, but ended up ruining their finances and their relationships as a result.
There is this real FOMO that is developing from folks following FIRE who are NOT calculating the numbers.
I also admire Suze for her confidence.
But her confidence seems borderline narcissistic. Most know who Suze Orman is already, so to keep saying how great and rich she is seems very off. Maybe it’s a cultural issue because in Asia, we’re taught to be as humble as possible with our wealth and success.
Sam
I have to comment. I love the principles of the FIRE movement. My husband started trying to follow these principles at a young age when we got married at 22. But I really agree with Suze here. I have lived the crazy string of circumstances that she is describing and I’m not even old. And I think FIRE needs to look vastly different depending on your relationships. Are your parents well off and set? Do you know? If they aren’t, are you going to step up to help them when that time comes? What if something happens to them or you before retirement age? Both my parents have faced crazy health issues, totally unexpectedly. It has cost them fortunes. My dad was the main breadwinner and died at 56 from a lung cancer that is almost exclusively found in smokers. He never was a smoker in his life and was pretty healthy. Then my mom was disabled from a heart attack. She clawed her way back and was planning on working or making investments to support herself better with the money she had left from my dad, then had a massive stroke at 60 leaving her completely disabled and in need of long term care. SHE IS ONLY 60 and burning through every penny they had faster than you can imagine. And guess who will be trying to float the bill for the remainder of her life? My brothers and I. I have three children of my own to support and just turned 32. My husband and I have been extremely frugal and smart with money, thankfully. But I can’t even fathom how we will do this. How will we save for our own retirement, support my mom, save for our children? Now we follow the FIRE movement out of necessity to support those in our lives. I wish it was for the goal of early retirement. If you are fortunate enough to not have parents to support, just please be sure to leave enough money (way more than you can imagine if you need any kind of supportive, long term care) to support yourself if you happen to be disabled at an early age so your kids don’t have to. People talk about how hard it is at 50 and 60 to support elderly parents when they need it, I can’t explain how hard it is to do it at 30 when we are just beginning our own lives as a family. Feels like all of our own financial goals have been completely washed away.
What Suze was saying in so many words is: “The world is a scary and very uncertain place, and you owe it yourself and your loved ones to do as much as you can for as long as you can do it”.
In the event the robot apocalypse does come, or WW3 or whatever, people are going to prioritize helping those that did their best. Gov’ts, and even friends or family may not rush to bail out those that stopped working 10 years into their prime.
I agree with all the other comments, I think Suze Orman doesn’t quite understand the concept of FIRE. All the doom and gloom scenarios she states can happen to working people – most of whom DON’T have the savings cushion of the typical FIRE follower to absorb the hit. Also, what she said about the employer or corporation taking care of their worker with insurance and/or long term care insurance is just B.S.– Maybe at executive C suite level but NOT the typical worker. Based on her comments, a person would need many multiple $$$ millions to retire–If a FIRE follower’s portfolio is inadequate for retirement then a typical wage earner has no chance.
Define RETIRE!!! that is where the problem here, because you cannot be half pregnant its either your pregnant or not! Even the word Financial Indipendence is an illusion. Those who opposed to FIRE just simply translating what exactly the term means to you FIRE people. Maybe we should replace the word FIRE to something that reflect what we really want to achieved, here it is: AFCLLW (pronounced af-clew) “Achieve Financial Confidence to Live the Life that you Want”.
Good podcast, but I have a hard time believing that 2 million dollars is not enough to retire on a modest living.
It seems to be a bit of a PR run via CNBC which is fine… Makes me glad I am Canadian with freeish health care so I do not have to feel the fear many Americans do… most people playing with FIRE…seem more focused on the FI aspects… with encore job prospects like real estate, writing or small biz options etc…full FIRE wannabes…just need to consider the pro’s and con’s… doing their homework carefully before leaping into the flames… I kinda like FAT FIRE with side biz options … how about you?
http://christianprofessionalsoverseas.com
Agreed
You bla bla bla all the “projected success” into the echo chamber. Projected wealth is not wealth. Enough money in the bank is wealth. Suze gave you insight into failure. Suze gave you insight into risk. Insight based on the failure data she has experienced in letters and such from a lot of people. There is no means in the FIRE blogosphere to acquire failure data. People don’t publish failure. In addition failure often takes decades. Hardly anyone in this echo chamber has been active for decades and certainly hardly anyone has been retired for decades to tell the tale. Most people in FIRE are in accumulation. Accumulation is inflationary. Your portfolio is compounding. Inflation happens because the W2 is providing the cover. Your dominant brain chemistry is dopamine based in accumulation. In addition the W2 provides risk mitigation. Health care, retirement accounts, paid vacation, educational opportunity, disability, life style stability etc. You go to work your employer manages your risk. Dopamine and no risk, you think you’re super person. It is the reason you stay, it is the golden handcuffs. Most can not stand managing their own risk, they much prefer to be taken care of. There is a whole different part of the brain that responds to risk aversion and it is very strong. As soon as you loose the W2 your risk picture changes. Now you get to own all your risk. It’s on your head. Furthermore opening your portfolio is deflationary, and the portfolio becomes liable to SORR so you have increased risk and deflation ruling your life because the risk aversion part of your brain is freaking out. It’s easy to be brave in accumulation. Suze does not miss this. It is precisely what underlays her histrionics. She’s scattered, poorly spoken and self absorbed but not stupid. I’m not a Suze fan but I get her point, and her point does not screw with my denial, because my goal is to not die rich but to not die poor.
If you want to be bold in the FIRE community devote some podcasting to failure and how failure occurs. Accumulation is the easy part. Correctly managing portfolio risk in the face of 30 or 50 years of portfolio deflation is the hard part, since no one knows the future. Every one bla bla bla’s the easy part. My property pays me this, my property pays me that. Start podcasting about failure and risk controlled deflation, that would actually be interesting and worthwhile. Accumulation is not interesting. Accumulation is trivial. You can’t solve a problem without failure analysis. You want a source? You just interviewed her. She has the data.
With no prior opinion of Suze Orman, I find she lacks credibility. Two observations:
Suze : “…$500 a month would cost you $3.5M if you waited ten years. You wanna be a multimillionaire? Do not, do not, insult the beauty of compound interest.” (At minute 21:34)
Her math requires a 73.6% yearly return rate. Perhaps she just misspoke, but it is not clear what she was getting at. Assuming a 7% return rate, accumulating $3.5M in ten years would require saving $19,730 per month. Saving $500 per month would require 54 years to reach $3.5M.
Suze: “Paula are you one of these people who wanna stop working at 39, at 30 or whatever age you are?” (At minute 31:08)
Suze and her publicists didn’t do their homework. A cursory look at the Afford Anything ‘about page’ would have informed her of Paula’s views on financial independence and cubicles.
She did not appear to be aware of the interviewer or the audience. She pontificated for an hour.
Oh. Paula! Thanks for doing this… it sure has sparked conversation! You are wise and we all know that you are really truly the financial matriarch of the world. 😉 Great job with the interview and recap. Otherwise it’s all been said.
There are a lot of posts so I may have missed it if someone already said this but, I think Suze’s team knew exactly what they were doing getting her on this show. She was always controversial but less so in recent years. So how do you get more exposure for your new book? Put yourself in a show who’s audience is going to disagree overall and at the same time an audience actively engaged in social media. I’m not saying she doesn’t have some valid points but she is a money making machine who’s audience is aging and she needs more exposure. Nothing against Oprah but, again what is the age demographic? Maybe FIRE has the wrong name because most people I know that achieve FIRE just want freedom to work or pursue life on their terms. FIFE financial independence freedom early?
A little on the conspiracy theory side, I think Suze believes the parts about automation and tax tables going nuts and people being unemployed. I think people who make money in the stock market lose when the minions no longer buy into the theory of work until 70 and don’t draw down your investments because you’re drawing down their money. She wants to preserve the system as she knows it.
Posted from my phone with big fingers.
Paula, I really like your FIRE definition of basically becoming enterpreneur with safety net. I can really relate to that.
Like you, I really don’t see myself stop working at all. But I would love to quit my mundane corporate job to build businesses with peace of mind that my family is taken care first financially.
Kudos for airing this episode, thank you!
FIRE evangelists have become like any other religious group of fanatics that move to Guyana following reverend Jones. You preach the gospel. You repeat it time after time. You end up drinking your own KoolAid. Cheers!
Now if you pause for a second and listen closely to Suzy, you might discover a few nuggets here and there even if you mostly disagree with her point of view.
The truth is that compounded investments in the stock market after 20 or 30 years produces results not otherwise obtainable. When you RE in your early 30’s, you loose that. It is also true, that for SOME people, REing in their lates 20’s is worth more than the potential returns on compounded interest/investments that they could attain by staying invested long term. What Suzy is saying is that there is a price to pay for REing. Be aware of that.
It is a choice that does not workout the same for everyone, either. Following Suzy’s line of thought; life may throw a curve ball at you at the most unexpected moment. You don’t see it coming. You won’t know until it hits you. There are various degrees of problem solving money solutions for the very same problem. But the more money you have to throw at a problem, the less stressful it can become. Suzy spent over $250k a year in long term care for her mother. Me? Nah –I would probably move my mother to Dominican Republic and spend $20k a year instead. Or bring her home with me and I will take care of her myself and possible one other helper.
I think Suzy deserves a bit more respect than Paula’s characterization of her. You can preach your gospel, but you also need to respect other’s. Learn from the old Spanish adage: “El que no escucha consejos, no llega a viejo”. There is good pieces of information on her words.
At the end, some FIRE evangelists –like Paula– are really telling you to RE in order to find other means to make money. To some, it is great advise. To me, it tells me to stop being a software engineer so that I can become part of the gig-economy by driving for Uber. Non-sense. RE is RE. Don’t call it RE to join the gig-economy. When RE evangelists speak of RE they confuse people like Suzy who really thinks you are speaking of RE.
One particular mistake Paula makes all the time is to present real-estate investments as a panacea and even dares to call it “passive income”. If you are inexperienced at RE investments, listen very closely: “PASSIVE IT IS NOT”, and also; “RISK FREE it is not”. So when she compares 9% market returns to 9% overall RE returns, she forgets to tell you; index investing is completely passive. RE investing IS NOT. I could write a book of the expected and unexpected situations you will encounter with RE investing.
I own 20 rental properties. Every day is a new day with new challenges. Don’t get me wrong. I love solving my rental problems. After years doing this, I have a system in place and have developed the stomach to deal with these situations while sleeping just fine at night. Be ready to pay the price while you climb the learning curve your first few years. Also, unlike stocks, properties are like “loaded” bond funds. Keep in mind you will pay about 10% of its worth at the time of sale. IMHO; you are better aim at more than 10% return when seeking RE investments.
Here is one last nugget; any time you hear Paula say, “find a good management company”, remember this; that is easier said than done. I deal with 3 different management companies. It is always a tug of war with each. One works better for smaller rent apartments while other works better for bigger rent houses. None is perfect and you are better keep a close eye on everything. I could explain in more detail, but I would digress. Property management companies are really best at milking the cow. The cow being the landlord and the tenant. Attend any property managing seminar and you will see what the biggest emphasis is. You will need a property manager, yes, I’m not arguing otherwise, but remember these 3 words: “tug-of-war”.
In short, I have both, rental properties investments as well as stock market investments. I own indexes as well as over 51 individual stocks that pay dividends. I love real estate rentals as much as my dividend paying stocks. But while one is mostly passive, the other is not by any stretch of the imagination. I would have not had the money to purchase my rentals out-right if I was not invested in the market. Money in the market has more than tripled in the last 10 years. I have not stoped writing software. How could I walk away from doing something as much fun as writing software that pays tons of money in order to drive for Uber?
Just my 2 cents,
Reinaldo.
I think an overall theme here is that mere mortals cannot afford certain curveballs, retired-early or not. I am temporarily “early retired” due to a longstanding illness which has financially decimated me while destroying my ability to work for myself, and it wasn’t even a particularly expensive one, and yes, I had health insurance.
As I consider starting over from scratch (although fortunately, not much debt), it strikes me that many in the working world will not hit $80k a year. (Honestly, I never have.) Is it irresponsible and short sighted for them/us to continue working at such “low paying” jobs? Is it that much of an edge that we haven’t fallen out of our chosen careers? We still can’t afford the pitfalls Suze mentions, either.
I hear the health one a lot—your health, a parents’ health. The problem here does not seem to be the irresponsibility of someone working for less than $80k or retiring on it. I am ALL for paying your own way and covering your own expenses. But at a certain point, the costs are so ridiculous, you’re basically becoming your own insurer, leaving money on the table in the end if you don’t use it. What’s a person to do, early retired or not? I’m really not sure. It becomes an ethical quandary, one that can’t be crunched on a calculator.
How about we look at the other side of the equation Death Rates ( https://www.cdc.gov/nchs/nvss/mortality_tables.htm ):
from 35-44 1,844/100,000 (1.84%) in the US die
from 45-54 4,209/100,000 (4.21%) in the US die
from 55-64 8,777/100,000 (8.77%) in the US die
from 65-74 20,113/100,000 (20.1%) in the US die.
So sure you can need extended care, you can have a lot of issues but if retirement is waiting to do something guess what there is almost a 15% chance you are going to be dead by 65.
Look at the reality of those who are retiring now and the median net worth of those retiring today after 65 is less than $200,000 per the Census Bureau I think she is living in a dream world. Those who have managed money well enough to FIRE are going to be in better shape than the majority of Normals and 15% of them will enjoy freedom that the Normals will die before they ever retire. I am FI but have chosen not to RE but she has fallen into the dream world of those who have received success beyond her needs.
Wow! Great podcast. At age 82, do I agree with Susi Orman? Mostly no.
I do agree with her about the concept of compounding and the importance of working during the years of 25-45 (20 years to gain your fortune) to build your money base (after your education completion by age 25 or so).
Call it FIRE, call it whatever. Her point is well taken that it so much easier when younger, healthy, and focused.
However, listening to her exposed the other side of the coin where her focus is so much about money and security that one would never be brave enough to tackle freedom from paid work. She suggests…2-4-10 million, or 20 million to feel secure before quitting work? Might as well as sign up to become a robot to the corporate world with that vision. Sure, machines will take over in another 20 years. And, we could have a world war in ten years and be taken over by ? And, Trump could be a foreign agent for Russia and the USA becomes a slave state to the Soviets? Hey…anything could happen in the future. And, it could cost $50,000 a month for a nursing home.
FIRE is a vision of freedom. The key is vision. When events change in a personal life or on a world basis, one just adapts to change. She paid $30,000 a month for her mother’s nursing home? She obviously lives in a rarified world. In my hometown in Oregon , the costs vary from $2000 to $5000 a month. Most of our friends never use them and prefer their own home. My aunt will be 100 years old next month in Maine and lives in her own home. A nurse checks in on a daily basis.
In our 80’s we still travel, hike, bike, and kayak all over the world. We are fortunate to be healthy because we exercise daily, eat a plant based diet, volunteer, and I still work seasonally at places like Amazon and Costco. I quit college teaching at age 45. Sold my business of adventure travel at age 55. Built a home and gardened for ten years until 65, and then went back to grad school. Worked overseas until 70 teaching ESL. RV’d full time until nearly 80. And, had five kids (blended family) and eleven grandchildren.
Yet … We rarely ever had more than $200,000 in savings or investments. My main investment was my education with three advanced degrees. There are so many ways to be independent and free to live one’s unique vision and lifestyle. My point is…live your dreams and make them happen. Today, at age 82, we live in an apartment on a golf course, and travel with our converted camper van with two kayaks on top and two bikes on the back. Our expenses average $3000 a month.
In the end, we all die. End of story. Many of my friends are dead. Some took there own lives in their 80’s because of health problems. What’s tragic is not to live your dreams and contribute to society in the process. 20 million to feel secure? Give me a break!
I really appreciate your comment about expenses and certain areas of the country. Of course, there’s some very valid truth in that.
I will say that I have a new perspective on elder care since we had to put my father into a dementia facility at 77 years old. Dad was an investment manager for his entire life, and we thought that if anyone was prepared for retirement, he was. But, Parkinson’s Disease and dementia are no joke. It is so much more expensive than I could ever have imagined. And, you have to think about the type of care you’d like, if you were confused and in pain. You’re not going to want to “cheap out” on this expense. Very sadly, some of the cheaper facilities wanted to keep Dad sedated constantly to keep costs down. We went with one of the more expensive ones that didn’t believe in drugging Dad into a constant state to stupor.
It’s easy for costs to add up, and Suze’s numbers are not unreasonable. Think about how much it costs if you have to have someone care for you 24/7. For a while, that’s what we had to do for my Dad. No matter where you are in the country, even at the lowest federal minimum wage, round-the-clock care costs more than $5k/month. That’s in addition to your other living expenses and medical expenses at that point. These assisted living facilities insist in their contracts that you pay the extra expense in the event that you need too much care than they can provide. You’re vulnerable, and you’re really stuck.
So, while Suze’s numbers may be a little inflated, I still think that she makes a good point about rethinking how much you’re really going to need at the end of your life, since we’re living so much longer. My husband and I are now questioning what it would look like if we needed a lot of care. We are rethinking how much we’d really need for F.I.R.E., and it’s so much more than some of the financial bloggers project.
Thank you, Paula, for your calm approach to this interview. I think Suze makes a false assumption regarding the FIRE movement. That assumption is that all FIRE people have NOT considered any future risk. Really? A FIRE person who has been smart enough to save 2 Million in their 30’s has not only been a great saver, has learned to live below their means, has considered how long their money will last under various scenarios. They probably have a Compound Interest Calculator bookmarked on their computers. I know one thing FIRE people are probably not doing-buying a private plane and island.
Paula, I’m a big fan of your show (and your appearances in someone’s basement). I’m very glad you had Suze Orman on your show. She was in rare form and I was actually laughing out loud in my car at some of her more grandiose statements. She was certainly laying on the doom and gloom pretty heavy and certainly exaggerating the risks of retiring early. Perhaps her own recent family tragedy is weighing on her mind. Yet hyperbole is her specialty and I’m guessing that she has learned from her broadcasting experience that if you want to make a point you have to overstate it. I do hope that this conversation does help folks think again about how ready they are to step away from salary and benefits and how carefully they have factored in the unforeseen eventualities of life. Keep up the great work and congrats on the Plutus award.
Suze’s bright chirpy voice gives me indigestion! She is so out of touch with most of humanity and so full of … herself! It is arrogant for her to insist you need millions to retire and a huge income to get by. She writes off the great majority of humanity who are simply trying to make the best and work hard for the future. She puts down the FIRE movement (which I only just heard of recently) and fully displays here ignorance on the subject for all to see!
BTW, I at 67 just started a blog and youtube channel. I have no hope of matching the 20- and 30- somethings out there (much less you)! But I will start anyway, even at this late date.
As a woman at the tail end of the baby boomer group, so much of what Suze says is dated. It’s what we women of the baby boomer generation needed to hear. Divorce devastated many women financially and many women never had high paying jobs that allow them to retire comfortably. But your generation has already gotten benefits from the movement that she and the women equal rights movement started years ago. Paula you are the new voice for a new generation, you and Mr Money Mustache, etc. your generation has the ability to reap the benefits, to be financially secure, and have the option of changing the world. So set the world on FIRE!
Interesting. I agree with your takeaways Paula. Seems like she needs to do a little homework on FIRE. She doesn’t think we’ve calculated risk into the equation, know about inflation, and we are dipping into our principle.
Would be fun to have a debate with her on FIRE, so she might actually see that its more calculated than she thinks.
Wish you would have said you were an advocate of FIRE when she asked if you planned to retire early and see her reaction.
Boy Suze has become quite a rambler. Seriously if AI is coming for everyone then you might be better off already being a stoic. Plus I’d assume most FIRE are above median intelligence and most are generating income from side gigs or hobbies. So in my mind her argument is moot.
She’s talking basic compounding ROFL.
If you have 2 million and are drawing 5 percent, thats a 100,000 “income”. How is that different that a job that brings that income? She just seemed to come across as a hard headed close minded angry crazy person to me. Maybe I missed something?
Wow, she is like a financial hypochondriac!! 10, 20, 40, 100 millions is nothing! It is nothing because we can find terrible thing that could happen that cost more than that. What she will do?? Seriously how she can face a 1000% inflation per year like they have in venezuela. What if… What if…
This is ridiculus.
I never leave reviews but after listening to this episode, I felt compelled. The reason I am leaving the review is specifically because of Paula’s intro to this episode, I absolutely loved it. Paula, everything you said was spot on; yes Suze may be controversial but I very much appreciated hearing a perspective different from my own. I don’t want to get caught inside my own echo chamber. I could be better about seeking out differing opinions but I am so glad you asked Suze to come on and talk about her thoughts. I’ve always been curious as to the “drawbacks” (if you want to call them that) about FIRE so it was great to hear some of Suze’s comments about health costs in later life etc.
Paula, love your show and will continue to listen because you truly have great content. Thank you for encouraging us to broaden our horizons!!
My favorite line was that without a job, you can’t get disability insurance because you have no income to insure. It’s like saying you must have a car, otherwise, you can’t buy car insurance.
And Paula, you were awesome!
One of the wealthiest people in the world died of cancer at 65 yesterday (Paul Allen). If a person can responsibly create a life of freedom, they should do it because you never know what is going to happen.
When I saw the news of his passing, I immediately thought of this episode and how misguided some of Suze’s advice had been. Build a life (noun) of freedom and independence so you can live (verb) the life you choose.
Thanks, Paula!
Best Episode Ever! It’s great that you welcome different opinions! Plan for the worst, hope for the best. She brings up interesting points. Thanks so much for this. Great perspective.
If everyone needs $80,000 a year to survive, then my parents, my grandparents, my siblings, myself, and just about everyone I know, doesn’t actually exist. Spooky.
I just recently (fully) retired in my late 50’s. I used to watch Suze when she was on TV and enjoyed her point of view. She had the same “enthusiasm” (which on this podcast definitely was off-putting) on her show then and in general she wanted people not to live beyond their means and to pay off debt they had accumulated–all good things.
She does have a couple of very good points though:
–compound interest is your friend and when you retire early to live off your passive income (say at 4%), the amount in your nest egg is not growing as it would be if you kept working.
–you probably will have some large unforeseen personal or financial catastrophe in your life-I did and it seems everyone I know has also. This means you will (much more likely than not) need substantially more than what you think
She does come off in this interview (and also towards the end of her years on her show) as very full of herself. In my opinion, all her numbers are way inflated–probably because she is living her own prediction that if you have more money you spend it–and in her case she has a lot more money and is spending it.
I have become a fan of your podcasts as a result of this interview. I loved the way Paula gave the interview and the subsequent commentary on the following podcast. I am now in the process of listening to all your podcasts.
2.5 million dollars on her mom? What did she do? put her up in the Taj Mahal?
I have always been fascinated with Suzie Orman. I decided to write a blog post on this interview. In my post, I comment on the interview. Additionally, I researched the true cost of long-term care and how one could mitigate the costs of Long-term Care.
I titled my post 4 ways Suzie Orman Could Have Managed Her Long Term Care.
Thanks for the interview Paula
https://www.theretirementspt.com/2018/11/21/4-ways-suzie-orman-could-have-managed-her-mothers-long-term-care-costs/
I have paid off all my bills but 1 for a credit card from BofA for ten thousand dollars. I have built a house with cash borrowing from my 401K. And will move as soon as I pay the one credit card I have left. I own my cars still working. What I want to know if. Since this credit card account is closed do I need to pay this card offf?