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I have $20,000 in a Roth IRA which can be withdrawn at anytime, free of taxes and penalties.
The post above mine notes this, but where do people get the idea that ALL money in a Roth IRA can be withdrawn "at any time, free of taxes and penalties"? Because it's NOT TRUE!
You can withdraw an amount UP TO YOUR CONTRIBUTIONS free of taxes and penalties (assuming the Roth has been in extistence for over 5 years), but a withdrawal of amounts above that (prior to age 59 and a half) is taxable as income AND subject to the 10% "excise tax" penalty, save in certain limited circumstances.
Main point is that all dollars in a Roth IRA can not just be yanked out at any time with no tax consequences.
I don't mind Suze Orman, but I hate that segment "Can I afford it?"
I mean I saw one about an 8 year old girl who wanted an American Girl doll and had maybe $350 saved from birthday/christmas monies and Suze told her no because they have no re-sale value. I have no idea why an 8 year old girl would ask her parents to ask Suze Orman... but it happened. You also see people on there asking if they can take vacations that they could afford (one in particular was to a brother's destination wedding or something) and she will say no because they need more of an emergency fund. I get it - they're important.... but so is enjoying yourself and making memories.
You are doing EXACTLY what you claim to hate about Suze's advice... insisting that one scenario is for all.
Given your circumstances... do what you are comfortable with. We all don't have millionaire parents who will bail us out.... your plan relies on them and on CC debt.
Three months is NOT sufficient for me. I do not want to sell stocks, nor will I rely on others or want to rack up CC debt.
(As I stated earlier, we have 12 months and are very happy with our choice.)
Um, no I'm not. Suze is the one who applies one size fits all. I, on the other hand am analyzing individual circumstances and tailoring a unique plan. For me, an 8-month emergency fund is far too excessive, especially as a single person who doesn't plan on having children, ever, and receives unemployment insurance in the event of job loss, and has plenty of investments for backup, and millionaire parents who will bail me out.
Maybe for YOU, a year's worth emergency fund works fine.
In my early twenties I read a couple of her books and she did have some impact on the way I save and invest, in addition to Dave Ramsey. I am now 30 and have 8 - 10 months of expenses stashed, and try to save 15 - 20% of my gross income.
On the other hand, I drive a 97 Subaru, cut coupons, buy my clothes on the 75% off rack, don't have cable, and live within my means.
Where I totally lost respect and credibility for her was when she said she supports being able to dispose of your student loans through bankruptcy.
Quote:
Originally Posted by duster1979 Can you provide a citation for Suze Orman's net worth? The highest figure I can find is $35 million.
Again, their target audiences are not necessarily the same. People who are floundering and can't seem to get a foothold need Ramsey, those who are getting by but want to get further ahead in their investing are probably best served by Orman. Those of us in between can learn something from each.
I hardly think one having a greater net worth means s/he's "it," anyway. You're right, too, that each can offer some nuggets of wisdom.
As I've mentioned here and elsewhere, though, Suze Orman's advice is often inconsistent. When she first came on the scene, she said that kids just getting out of college and starting their careers (obviously, that was a while ago) were the only ones who should be assuming debt so that they might "get on track." I thought then that she must be kidding because those early habits die hard. Also, she can be downright snobby despite her on-air endorsement of the frugal lifestyle. I detailed on different thread how she investigated another advisor who didn't agree with her advice and had some pretty nasty comments about his frugal lifestyle. Early on in her career, she also failed to disclose her financial relationship with Fair Isaacs, which led many to question her real reason for turning everyone into a nation of Fico Fanatics. She does tend to offer one-size-fits-all advice. For example, trusts are not for everyone in every situation.
I like these business/personal finance-themed shows , columns, and magazines, so I'm essentially a fan. Clearly, though, we need to ferret out the advice that applies to our own situation. One advisor I like is Michelle Singletary. She often repeats her grandma's ("Big Mama") advice that, IMO, is a real gem: "If it's on your ass, it's not an asset." Some things really are that simple.
Agree that she tends to give "one-size-fits-all" advice but her clientele seems to be "everyman" i.e. the average American indebted worker. I actually agree with her advice #7 - protecting your future assets through trusts.
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