Investing

Suze Orman Investment Advice – 10 Tips You’ll Wish You Knew Before

Susan Lynn “Suze” Orman is one of the best-known financial advisors in the US. She hosted The Suze Orman Show on CNBC from 2002 to 2015 and has written 10 New York Times bestsellers about personal finance.

In this guide, we’ll highlight 10 pieces of investment advice that Suze Orman has offered over her career. So, let’s dive right in so you can learn what Orman suggests to be successful!

Suze Orman Investment History

Suze Orman’s career began in the early 1980s at Merrill Lynch and she founded the Suze Orman Financial Group in 1987. Orman gained more widespread notice when she began writing financial books, starting with her 1995 book “You’ve Earned It Don’t Lose It.” She went on to publish nine more books on finance, all of which were New York Times bestsellers.

Suze Orman is the Founder of Suze Orman Financial Group

The Suze Orman Show, a weekly financial advice show hosted by Orman, aired on CNBC in 2002 and ran until 2015. While the show was running, Orman began writing a personal finance column for Oprah Winfrey’s O, The Oprah Magazine. Today, Orman hosts her own podcast, the Suze Orman Women & Money podcast.

Suze Orman Investment Advice

While a lot of Suze Orman’s advice is about personal finance, she has also discussed investing frequently throughout her career. So, let’s take a closer look at 10 of the best pieces of advice Orman has for investors.

Suze Orman-Investment Advisor

1. Stick to ETFs

Orman has seen investors trying to pick stocks in recent years, but she warns against buying individual companies. “Maybe you’ll hit it right,” she says, but “maybe you’ll hit it wrong.”

Instead of taking a chance, Orman tells followers to invest in something that’s a little less risky: low-cost index funds and sector-wide ETFs.

2. Remain Patient

Another thing Orman emphasizes to investors is that investing is for the long-term. “All you really need to do,” she wrote on her blog, “is check your account once a year to see if you need to make any changes to bring your overall allocation back to your target. Other than that, sit tight.”

Remaining patient is especially important during a market downturn, when less disciplined investors panic and sell. The market has always rebounded in the past, so investors who hold through a crash are likely to be rewarded.

3. Hunt for Lower Fees

While Orman is in support of fund investing, she’s well aware that many funds charge high fees. That’s why she encourages investors to take a hard look at their portfolio and jettison funds that charge more than 1% per year.

“Paying less in fees means keeping more of your money growing for your future,” she says. “And that’s extra important for the times when market returns are low, or even negative.”  

4. Think about Your 401(k)

Orman also points out that 401(k)s and other employer-sponsored retirement plans are rife with fees. She tells investors that “while you are limited to the funds offered within your plan’s lineup, it’s in your power to choose the lowest cost options.”

She also advises investors to transfer their 401(k) and other retirement plans to a low-cost broker after leaving a company. That way, you can invest your money with lower fees.

5. Consider a Financial Advisor

Suze Orman tells investors that a good financial advisor is “worth their weight in gold.” Having a professional take a close look at your financial situation can enable you to make smarter decisions instead of guessing about how to invest.

Suze Orman Investment Advice-Consider a Financial Advisor

The catch is that not all financial advisors are equal. Orman recommends looking for a fiduciary, since these advisors are required to put your interests ahead of your own and declare any conflicts. She also encourages investors to ask prospective advisors how they get paid.

6. Investing can be Better than Homeownership

It’s a commonly held belief that homeownership is always a good investment. But Orman points out that the financials behind ownership can be more complicated. “Sometimes, depending on where you live,” she says, “it makes sense to simply rent.”

This goes against the grain of traditional wisdom, but Orman is quick to point out that she’s not against homeownership in general. Instead, she notes that if you invest and save money now, you might be able to afford a better home or pay less in mortgage interest down the road.

7. Invest Every Month

Another thing Orman tells investors is to “invest every single month.” That way, you don’t have to worry about whether the stock market is going up or down because your cost basis is averaged out over time.

There is an exception to this rule, though. If you need money within the next 5 years, consider saving it instead of investing it so that you’re not at risk of needing to pull money out of the market in the middle of a downturn.

8. Buy and Hold

Orman is a believer in buy-and-hold investing and she is often heard quoting Warren Buffett. “A good quality stock is a stock that you should keep, and you should keep, and you should keep,” she says. “You should not trade.”

Orman points out that most of the time, companies that investors are excited about often have long-term potential. When you trade, you might make a quick profit but miss out on gains of hundreds or thousands of percent over the next decade.

9. Get Rid of Debt Before Investing

Like many financial experts, Suze Orman encourages everyone to do their utmost to get rid of debt. That means for many young people, it makes more sense to put savings towards debt payments or building a rainy-day fund than it does to start putting money into the market.

In fact, Orman was once asked what investments individuals under 30 should look for. Her response pointed out that investing isn’t everything: “You’re just rushing to be investing in the stock market,” she said to the interviewer, instead of “putting building blocks in place” for a sound financial future.

10. Take Advantage of Roth Accounts

Orman also encourages investors who are saving for retirement to take advantage of Roth accounts rather than traditional retirement accounts. “Those are the type of retirement accounts that you want to be in,” she says. “Stay away from the traditional ones.”

Suze Orman Investment Advice-Take Advantage of Roth Accounts

That’s because Roth accounts enable you to pay taxes on your income now, instead of in the future when you might be in a higher tax bracket. Roth accounts also make it easier to plan for retirement since you don’t have to worry about tax rules changing over the next 20 or 30 years.

Conclusion: Suze Orman Investment Advice

The right investment advice can make a world of difference. Suze Orman is widely considered one of the top personal finance experts in the US. Over her career, she’s emphasized long-term investing as a way to build wealth and reach financial goals. In particular, she has encouraged followers to take a close look at their strategies and investments to make sure their money is working as hard as possible for them.

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Kevin

Kevin is an ambitious entrepreneur that is obsessed with all things related to finance. From a young age, Kevin has always been involved with side hustles ranging from online selling to freelance work. Over the years, Kevin graduated from side hustles and started launching multiple online and offline businesses. Kevin is a serial entrepreneur who loves starting new businesses and exploring all things related to business and finance. He is constantly looking for new ways to save money, invest money, and create income streams.

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