Suze Orman Gets Call From Desperate College Graduate

Graduate gets sticker shock from loan payments!

Unemployed College Graduates and students are now turning to the internet to make money. Why? A recent call into the “Suze Orman Show” may give you a clue. Just like millions tune into Oprah for solutions to their personal problems, millions tune into Suze for their money problems. Suze’s “energizer bunny” optimism, warm personality and infectious smile are hard to turn off once you tune in. The show is such a big hit with college students, it’s no surprise her latest work The Money Book for the Young, Broke & Fabulous has been on the Amazon bestseller for some time.  Needless to say when Suze entertains calls from viewers, many are college students. Being a financial genius, solutions usually roll off her tongue without hesitation, however one caller left Suze a little perplexed.

Nicole was a female College Graduate who had taken out over 90k in student loans, 130k total with interest, now after graduation her monthly payments were $1300 a month, ouch. “What did you go to College to Study?” Suze asked. “To be a Fashion Designer,” she said meekly. Suze gulped, then asked her if she’d thought about all this in hindsight. “When you’re young you have all these aspirations,” she answered. Since students loans can’t be written off in bankruptcy, the only advice Suze could give her was to find a job that would cover the monthly payments and hopefully leave her enough money to live on.

If this college graduate was a victim of her “aspirations,” her university is just as guilty by catering to those “aspirations.” Apparently a counselor didn’t sit her down and explain the realities of the job market in that field. If the 90k in loans had been spent on a Medical or Law degree, this young lady would have a chance, but how plentiful are high-paying jobs in Fashion Design? While nothing is impossible, unless she was exceptionally talented (not to mention living in New York), chances are she won’t find any opportunities in that field. She’d probably end up doing something totally different; and since most entry-level jobs start between 25-30k, the loan would take up almost half of her monthly income. Needless to say, she’ll probably be living with her parents a long, long time.

So What’s A Debt-Ridden College Graduate Left To Do?

If you can’t get a break make one!

Savvy, ambitious Graduates and students are bypassing conventional opportunities and turning to the internet to make money. Many have realized in today’s world where degrees are a “dime a dozen,” you won’t get a break unless you make one for yourself. In fact, neither Bill Gates, the owner of Microsoft or Media Mogul, Ted Turner finished college. Ted Turner was actually kicked out! These were people who bucked traditional 9 to 5 jobs and made their own opportunity.

Learning how to make money online is no easy task, however for people who have smarts, patience and persistence lucrative opportunities abound. College graduates and students are ideal when it comes to the type of people who succeed online. Students are open to learning new disciplines and applying concepts. The fact that someone has even completed college proves they have patience and persistent.

Knowledge of the following basics are needed when it comes raking it in on the internet: Research, Web Design, Marketing, Search Engine Optimization (SEO), Pay Per Clicks (PPC), Idea and Business Development. Who can teach you all this stuff? Well there are plenty of so called “internet gurus” who will tell you they can, then shove a $100 e-book down your throat. Their manipulative sales copy usually hook people in with the promise of a “web business in a bottle” type of message. Newbies seeking knowledge, often spend hundreds on guru products at the beginning of their web venture, because there was little alternative.

A University That Teaches You How To Make Money Online?

Many young people have found success through Wealthy Affiliate University

Luckily those days are over thanks to Kyle and Carson, Owners of “Wealthy Affiliate University.”  The two 26 year-old millionaires have been making a full-time living online for the last 6 years. In 2005 they launched WA University in order to help teach others how to build thriving online businesses. Unlike other Internet Gurus, who sell you a useless e-book and run; Kyle and Carson provide continuous 1-on-1 support through their membership site, which has become the largest on Internet.

The low monthly fee is peanuts for the value offered to members. The mega site offers an 8-Week Action Plan, One-on-One Support, Coaching, Video Training, Website Development Training, Internet Marketing Training Guides, Tutorials, and the famous Wealthy Affiliate forum. The best feature of the site is the 8- week action plan. A step-by-step plan that literally walks you through the basic to the most advance techniques used to make money.

While other copycat sites are just interested in collecting monthly fees, Kyle and Carson have structured their site into an interactive boot camp of sorts, where action is not only encouraged, it’s required. These guys know from experience that only through “taking action” will members find success. Many people find that the famous Affiliate Forum alone is worth the cost of membership. The forum gives beginners the opportunity to communicate with intermediate members who have become millionaires.  There are endless success stories associated with WA University, however the testimonies from the younger members really stand out. One member, Cody stated “Before I came across Wealthy Affiliate University, I was a bit lost in life; just out of college, working a job that I didn’t hate, but also didn’t particularly like. I needed something else. More excitement, more money, more of something I could call my own.”

Ironically it was tools he learned at WA University that helped him apply the knowledge he learned in School. “I’ve always been a business kind of guy and WA woke me up to a whole new world of marketing. It allowed me to use the marketing knowledge I learned in business school to market any kind of product I wanted…” He concluded, “I’m now making $500 a month profit after just a few months. This number is growing every month…It’s definitely a way to make some extra money when I need it. Who knows how far it could go!” Another young member named Brandy, who has been with WA for over 2 years, consistently makes over $500 a day from her online business.

And anyone making $500 a day certainly won’t have a problem paying their student loan.
LearningWealth101.com

Best-selling Suze Orman book

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I seriously think Bob and Suze need to put on the boxing gloves step into the ring together and have it out…

Here you have two extremely popular mainstream, “Pop culture” financial advisor, icons spouting their own versions of “financial freedom” and the “truth about debt”.

They both sit at the opposite ends of the spectrum in their views on money, Debt and investments…

So who is right?…Who is wrong?

Personally I dislike them both….More accurately I dislike both of their methods and advice….But if I had to pick, I probably would sit on the “more conservative” side and go the Suze Orman route.

Although I do think Suze is, most of the time, just spouting a bunch of “good sounding” generalities that seem like common sense.

I think Suze speaks with her certainty, and forceful confidence more as a selling point for all the “Kool-aid” drinkers out there that listens and follows anyone that speaks with enough confidence…

Don’t get me wrong, some of her advice is sound and just plain common sense, but I just think sometimes she speaks about things that she really has little knowledge of especially when it comes to Mortgages and loan programs, and indices that certain loans may be tied to and why that is important….

Suze over compensates and errors on the side of caution to protect her reputation and the “kool-aid” drinkers she markets her wares to…. I can understand this approach, but this does not mean I agree with her advice even 25% of the time.

I can appreciate Suze Ormans tendency to be a little financially conservative but sometimes I think she participates in a little “Financial Fear Mongering” on topics she obviously knows “little” about,…specifically Mortgages.

Robert Kiyosaki on the other hand almost borders on “financial reckless abandon”.  He advocates the approach to run up debt to increase cash flow and to use the liquidity from running up debt to make investments.
Mr. Kiyosaki  is a believer in the mindset, which a lot of your more traditional Financial planners out there share, that you should always have a mortgage on your home and be taking the tax benefits…

Robert also seems to like the idea of taking an “Option Arm” program and doing the minimum “Neg Am” payment and investing the difference of what you would be paying towards a more traditional type 30 year fixed mortgage.

I can’t even begin to express how much I shudder at the advice Mr. Kiyosaki gives…What is scary is a lot of  “mainstream” financial planners agree with him.

Me, well,…I tend to fall more in the middle between Suze and Robert.  I believe most people probably fall in this “middle” area.

First, I think you should always focus on completely paying off the mortgage on your primary residence as quickly as you possibly can.  Forget about the tax benefits that come from having a Mortgage…Why the heck would you pay a bunch of interest up-front, just so you can write off the interest on your taxes and hope you can get a bigger tax return at the end of the year?…Just does not make sense to me…Why not just remove this complete waste of time from the equation all together and just pay off your mortgage as quickly as you can….Not too mention that the IRS can decide to pull any tax benefit on owning a home at anytime…I just don’t like putting that control in someone else’s hands….How about you?

Second, Why the heck would you take a “Neg Am” mortgage, on your primary residence, make the minimum payment and invest the difference?…Now if you have the strict discipline to be able to invest the difference this might actually work, but at best, the problem still remains, that you are still gambling on the future performance of what the market is going to do that you are investing in.

Do you realize that by “Contract” the most a financial planner can guarantee as a return on your money is 3%?  Now do the math, when it comes to doing a “Neg Am” payment and investing the difference and see if this approach is really that good of an idea.

Personally I like to have control and NOT put my “faith” in anything, if I don’t have to, especially when it comes to money and the future security to my family and me…But thats just me…I’ve been called a ‘Control Freak” more than a few times in my life.

This is why I like the “Money Merge Account” (MMA) method of paying off your first mortgage as quickly as possible without affecting your monthly cash flow.
What is an MMA?

The Money Merge Account consists of three major components:

1. Your Existing Primary mortgage

The existing mortgage on your home is the foundation for the Money Merge Account.

2. An Advanced Line of Credit (ALOC same thing as a 2nd position Home equity line of Credit)

The MMA Program uses an advanced equity line of credit as a vehicle or a tool to drive the program. The equity line of credit must have the capacity to operate similar to a primary checking account and be set up with an open-end interest calculation vs. a closed-end interest calculation. Combined with the MMA web-based system, this creates a formula in which the money in your line of credit account generates an interest cancellation on your primary mortgage.

3. MMA software

The online MMA system makes a connection between your bank account, the advanced line of credit and your primary mortgage. Each time you deposit income into your account, it registers as a decrease to your mortgage balance. By decreasing your mortgage balance you now lower the balance in which interest accrues. By decreasing the balance in which interest accrues, you increase the portion of your monthly payment which is credited toward your principal pay down. The algorithms in the proprietary MMA system are systematically programmed to create the highest interest savings possible in the least amount of time.

In short, an MMA is basically getting a smaller second position “Home Equity Line Of Credit” or HELOC on your home and use this HELOC as you would use your regular checking account by cycling your income through it  (direct deposits and what not).  Since HELOCs use “open ended” interest calculations you can use this to your advantage by canceling the interest on the “Closed-ended” interest calculations on your current “first” mortgage and making some accelerated and “compounded” principle pay-downs in the process.

A HELOCs payment is also based on an “Interest Only” calculation on what ever the average daily balance is of the Line of credit.  It is assumed if you are cycling your income through this line of credit not only is the HELOC payment automatically made for you but the amount of interest that is charged is minimal because you are constantly keeping the total drawn amount on the line at a very low level. Compare this concept to a fixed second mortgage and see what you come up with…Go ahead do the math.

You always will have access to your income and cash flow based on the HELOC being an open ended line of Credit that you can draw upon at anytime.

You get the best of both worlds using this approach.  You get to pay off the biggest debt you will probably ever have (your home) in less than half the time and you still have access to your cash to invest as you would like to so you do not miss any great investment opportunity that may come along.

Using a “Money Merge Account” (MMA) as a financial planning tool gives you back control.  It is a known as opposed to an unknown, which is the territory that most “traditional” Financial planners roam.

Now using the MMA concept does take some discipline.  It does you NO justice to constantly run up the MMA account on frivolous purchases that you would not normally make if you did not have the MMA.

Your Home is NOT a credit card and an MMA should NOT be the vehicle to treat your home like a credit card.  But, with this being said,  I challenge you to compare this level of discipline that is required to effectively use the MMA against the discipline that is required using a “Neg am” option ARM type payment loan and investing the difference which is spouted by Mr. Kiyosaki and some of your more main stream financial planners.

Now, because I personally like the MMA concept this is where I diverge from not only from Robert Kiyosaki but Suze Orman as well.

Hell, I remember Suze Orman spouting here usual “fear mongering” about the dangers of “Home Equity Lines of Credit” HELOCs saying that if you miss a payment on a HELOC you will lose your home.  Jeesh, that’s a little bit of an exaggeration.

The problem people run into when they use HELOCs is that they tend to treat them like a credit card secured by their home.  This is the absolute wrong approach and is nothing what the MMA method advocates.

So back to the original question…Who is right who is wrong?…

If you’d ask me I would say Both Robert and Suze are wrong because they are not understanding the “wide scope” implication of what they preach to the masses.

I would also say there are certain financial concepts that both are unaware of that they might actually both agree with.

Not everyone will fit into any “cookie cutter” financial plan.  A lot of it comes down to style, comfort levels, discipline, and personal financial tolerance…in essence “Different Strokes for Different Folks…”

My only point is not to believe anyone “blindly” just because they may be popular or speak with confidence.  Investigate for yourself what may be the BEST course of action for you based on your own personal financial situation and goals…

In the mean time I will see if I can arrange that Celebrity death match between Robert and Suze, You interested in buying tickets to watch?…..

Certifed Mortgage Consultant Article Source

Years ago, I caught an episode of Dr. Phil. On it, he was talking to an overweight woman who was talking about yet another diet that proved to be unsuccessful. She listed off all the healthy foods that she was eating and yet she fell off the diet because she gorged on some ice cream after a bad day at work or a fight with her husband or something emotionally draining. Dr. Phil was able to sum up the whole of this woman’s dieting experience with these two sentences: “It’s not about what you’re eating. It’s about what’s eating you.”

I was reminded of these words last night when I was up way too late watching yet another television program featuring yet another “guru of the moment.” Suze Orman was taking a call from a woman who flirted with declaring bankruptcy and she needed advice regarding the perpetual lack of money in her life. Suze Orman’s immediate response to this was “A lack of money doesn’t create problems. Problems create a lack of money.” And in this caller’s case, she was right.

While this statement is not always true, nor is it entirely accurate for every situation, I do think there is something there. How many of you find yourself in a pinch because, due to some crisis (a surprise layoff, hospitalization, ignoring your bills entirely) you are now facing a financial setback? Below are some general areas to help you create a day where you get to deal with life, instead of worrying about money.

Get some order to your life.

Don’t stuff the bills into one pile that you then shove into a drawer when neighbors come over for dinner, thinking you’ll remember to pull those out at the end of the night. Because you won’t. Out of sight, out of mind. A billing cycle will roll around and you’ll notice that your payment now includes a past due amount. Why? Because the original bill is at the bottom of the pile that’s sitting the bottom of your desk drawer. Develop a filing system. Group your bills together according to they’re due date and mark your calendar. If you find that too many bills are due at the same time, call a couple companies you owe and ask if they can move the payment due date either earlier or later in the month.

Develop a system of going through your mail.

Professional organizers suggest that you go through your mail over a recycling bin. You immediately toss out promotional flyers and circulars that are addressed to “occupant” and you shred the remaining credit card offers (and anything else with your name and address printed on it). The remaining one or two envelopes are probably bills. You deal with these immediately. Either pay them right away or devote a couple of days a month–days that fall either on or close to payday–to mail off these payments. Online banking works wonders for the disorganized, by the way.

Safeguard against “the” crisis.

It happens. And we all know what “it” is. Put as many safeguards into your life to end this oppressive cycle of debt. Work on getting that emergency fund savings account filled. Work on getting health and disability insurance. Look into life, home/renter’s insurance, too. And, when the crisis does happen, don’t pull out the plastic to fix it temporarily because you will end up paying for it in the long run. If you do find yourself in a moment of prolonged crisis–like sudden unemployment–lower your standard of living immediately. No more eating out. No more pizzas delivered. No more shopping as entertainment. And don’t charge your life away, either.

As you get your financial life in order, you’ll find that the lack of money wasn’t actually the problem. Don’t get me wrong. I know, we always want to make more, more, more. But recognizing how much you do make and planning and spending accordingly to your income level will truly clear your path to a heightened level of financial freedom.

Get your spending under control Article Source

Step 1 - Seeing How Your Past Holds The Key To Your Financial Future

“Messages about money are passed down from generation to generation, worn and chipped like family dishes.” Suze Orman

It is important to spend time understanding your family’s stories about money - and the ones you created yourself, as you were growing up. Financial freedom begins with freeing ourselves from the burden of the past.

Step 2 - Facing Your Fears And Creating New Truths

“The trouble with fears is that when we keep them inside and refuse to deal with them, they grow, like weeds left alone in a garden. Take the fear of not having enough to cover the bills this month and let it wander around by itself, unchecked. Where will it go? It will become the fear of not having enough in general.” Suze Orman

New financial realities can only grow once you have faced your fears and replaced them with new, more empowering beliefs.

Step 3 - Being Honest With Yourself

“Most of us believe, or deceive ourselves into believing, that we need about $1,000 to $1,500 a month less than we actually do need to go on living the exact same way we live right now.” Suze Orman

It is very important to go back through your records and establish exactly how much you have really spent. Guessing won’t get you free!

Step 4 - Being Responsible To Those You Love

“It’s not OK when you get sick, or when you die, to leave financial chaos behind you for everyone else to clean up.” Suze Orman

Make sure you have a will, including a testamentary trust, adequate life insurance, income protection insurance, and health insurance. If you are not sure what any of these are, or how to get them, consult a financial planner.

Step 5 - Being Respectful Of Yourself And Your Money

“If you’re respectful of your money, and do what needs to be done with it, you will become like a magnet, attracting more and more money to yourself.” Suze Orman

The most powerful and respectful way to make money is to invest wisely. Plan for your future, take advantage of the superannuation plans that are available to you, face your debt, and stand guard over your money, ensuring that every penny you spend is a penny that must be spent.

Step 6 - Trusting Yourself More Than You Trust Others

“When it comes to every financial decision you will make for the rest of your life, you will choose correctly if you go with the answer that reflects your instinctual response.” Suze Orman

Your financial freedom is your responsibility, and it can only be planned and brought about by you. There is no “expert” or “insider” who knows better than you what you should do.

Step 7 - Being Open To Receive All That You Are Meant To Have

“Money is a living entity, and responds to energy, including yours, and to how you feel about yourself.” Suze Orman

Thoughts of poverty are the chains which bind - to release them, give money to a charity you feel stongly about.

Step 8 - Understanding The Ebb And Flow Of The Money Cycle

“How often have you heard, for example, of someone who is devastated by being fired, only to land a much better job and end up happier?”

To be at peace with the ebb and flow of money, remember two things. Always take the long view of your financial future, and believe that everything that happens is positive, if you are willing to let it be.

Step 9 - Recognising True Wealth

“True financial freedom lies in defining ourselves by who and what we are, not by what we do or do not have.”

You cannot put a price tag on your life. No matter what financial ups and downs happen in your life, you will be truly wealthy when you understand that none of that stuff matters. Not really.

“Money itself cannot make you financially free. Only you can make yourself financially free, and you can do it - and so much more. You have that power.”
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