Suze Orman - "I hate the FIRE movement."

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Freefun
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Re: Suze Orman - "I hate the FIRE movement."

Post by Freefun »

I don’t have any opinion of Ms Orman.

I want to find a balance between having enough money and being in good health to do things.
Remember when you wanted what you currently have?
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Re: Suze Orman - "I hate the FIRE movement."

Post by willthrill81 »

NextMil wrote: Mon Oct 01, 2018 10:52 amI also think the parochial view of FIRE as being black and white is really sort of silly. Even the most staunchest proponents of FIRE who have done it end up still working even if it is part time.
Nate79 wrote: Mon Oct 01, 2018 11:39 am Sounds like she doesnt understand the FIRE movement.
Atgard wrote: Mon Oct 01, 2018 11:58 amAs some have pointed out, the first part of FIRE -- the "financially independent" part -- is always a good thing, whether you want to keep working, switch to a less-stressful job, quit & travel the world, whether you're part of the 25% unemployment she predicts, etc. Having that flexibility to weather the storm and not be as reliant on your current job can only be a good thing.
Paula Pant, the host of the podcast, said in no uncertain terms after the interview that she believes Orman has confused being FI with retiring in your 30s. But even so, the notion that a person in their 30s who isn't a deca-millionaire is incapable of retiring safely strikes me as ridiculous.
Mike Scott wrote: Mon Oct 01, 2018 10:56 am Being financially independent only means that you have choices that most people do not have. You don't have to stop working.

It seems to me that some of the extreme FIRE circumstances (young age with minimal resources) are taking a lot of risk into a long unknown future. But maybe they are OK with that. We don't all have to make the same choices in life.
Precisely.
Mike Scott wrote: Mon Oct 01, 2018 10:56 amSuze's prediction of 25% unemployment in 10-20 years, dramatically increasing taxes and the death of social security seems a bit apocalyptic. Did she mention zombies? :) If this really happens, I doubt that any of us are ready.
camillus wrote: Mon Oct 01, 2018 12:54 pm
willthrill81 wrote: Mon Oct 01, 2018 10:36 am She believes that SS is in real jeopardy, and counting on receiving benefits on almost any level is a mistake...

She believes that unemployment will be 25% in a decade or two, and that tax rates will increase dramatically.
This is a near apocalyptic scenario. Unemployment in 1933 was 25%. Most retirees major source of income is and will be social security. I don't know what justification she has for her beliefs, but it is a pretty wild projection.
If Great Depression Part 2 occurs, nothing will be safe. Many focus on stocks' performance during that time, but bonds were hammered very hard as well.
Smorgasbord wrote: Mon Oct 01, 2018 11:12 am It seems that Orman's threshold for retirement is being able to spend $350,000 a year in perpetuity. At that spend rate, the vast majority of people would be wiped out pretty fast regardless of whether they continue to work or not. If the outcome is the same either way, I don't really see that as much of a reason to continue to work.
I entirely agree.
Jags4186 wrote: Mon Oct 01, 2018 11:44 am Suze saying you need $10 million is no different than the people coming on here saying you can only count on a 2% SWR. Same argument, different framing.
Both are hyper-conservative IMHO.
PVW wrote: Mon Oct 01, 2018 12:05 pmI can see your point. My perspective is from a DIYer that might listen to her advice and use it as motivation to start serious planning. But there are probably a lot of people that take her literally and blindly follow her directions, which I agree is not good.
I don't know how to take what someone who is explicitly giving advice says other than literally. Did she say such things allegorically?
clockman323 wrote: Mon Oct 01, 2018 12:15 pm My thoughts about the biggest flaws in her reasoning is that everyone is in a different situation. How can age 70 be the magic number for everyone? If someone with a low wage job and minimal savings can retire at age 70, why should a good earner with 40-50 years of savings also have to wait until age 70?
Paula Pant, the host of the podcast, called her out on that point, and Orman himmed and hawed about it, saying that the person who works until 70 will have a shorter retirement to fund and will have better insurance coverage than the early retiree.
wrongfunds wrote: Mon Oct 01, 2018 12:44 pm I am shocked, SHOCKED that OP thinks this topic is not begging for a topic lock!

Exactly, what is *actionable* or *personal* about this topic?
Whether it is prudent to retire 'early' is a very personal and actionable topic.
Mlm wrote: Mon Oct 01, 2018 12:46 pm I think Suze got bored with retirement
DING DING DING!!! She pretty much said that. I really don't think she's saying all of this to try to make more money (perhaps she is, but she already has millions upon millions) as much as to try to keep herself relevant. She went on and on about how people were begging her to come out of retirement because she is the 'matriarch' of personal finance and the unwashed masses will not survive without her help. Like Dave Ramsey, she seems to have a very inflated view of herself.
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Re: Suze Orman - "I hate the FIRE movement."

Post by lostdog »

She'll say anything to stay in business. Just more click bait comments that aren't true.
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Re: Suze Orman - "I hate the FIRE movement."

Post by wootwoot »

With predictions like that I'm surprised she didn't throw out a sales pitch for listeners to buy physical gold, just in case...
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Re: Suze Orman - "I hate the FIRE movement."

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wootwoot wrote: Mon Oct 01, 2018 1:09 pm With predictions like that I'm surprised she didn't throw out a sales pitch for listeners to buy physical gold, just in case...
She has to save something for next book. :wink:
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Re: Suze Orman - "I hate the FIRE movement."

Post by Tamales »

re: She believes that unemployment will be 25% in a decade or two, and that tax rates will increase dramatically.

Some of the people who hype AI and automation make similar forecasts, and a tax rate increase would presumably follow due to the smaller contribution base. I bet an article about that wouldn't get this many posts, or would have been locked already as non-actionable.
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Re: Suze Orman - "I hate the FIRE movement."

Post by Wakefield1 »

Fear of giving up some control of one's own personal resource (the ability to earn money)
I and my favorite boss were more or less pressured by family responsibilities to retire earlier than would have otherwise been desired,he told me to try to keep my commercial (truck) driver's license as in trying to preserve the ability to return to work.
If not retired,you have a little more control of your future than if retired (it is harder to return to work than to keep a present job)
but freedom to travel and experience life as a healthy younger retiree (or as a financially self sufficient not dependent on a "retirement" unemployed person might be worth it
Last edited by Wakefield1 on Mon Oct 01, 2018 1:23 pm, edited 1 time in total.
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Re: Suze Orman - "I hate the FIRE movement."

Post by beyou »

80 is the new 60, only a matter of time before 100 is the new 80 :beer
Work to 100 and you will never run out of money !

People want simple answers to unknowable questions, and many are willing to provide those answers.
I could never sit through 2 minutes of her show.
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Re: Suze Orman - "I hate the FIRE movement."

Post by Longdog »

marcopolo wrote: Mon Oct 01, 2018 12:16 pm
willthrill81 wrote: Mon Oct 01, 2018 10:36 am .... She believes that most people should plan on working until age 70. ...

.... She believes that unemployment will be 25% in a decade or two ...
No cognitive dissonance there.
Was thinking the same thing. Mutually exclusive premises. In other words, since 25% of the people won’t be able to find work in ~15 years, everybody should continue working until age 70. I see. :oops:
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Re: Suze Orman - "I hate the FIRE movement."

Post by Starfish »

Coato wrote: Mon Oct 01, 2018 12:04 pm There seem to be a lot of ad hominem attacks here instead of looking at what she is saying.

What she seems (I haven't listened) to be saying is that in the middle of good times, it is often hard to remember that bad times happen.

This community isn't immune to that thinking, and there are a lot of posts about staying the course, keeping intl. and bond allocations at their static allocations even though it seems like US sticks are going to rise forever.

When I think of FIRE I think it essentially means getting just enough to live on and retiring. I would like to do this myself.

But I am also aware that if my wife and I did retire we are opening ourselves up to not just "Black Swan/ Deep Risk" events but also things that are pretty much realities, like inflation, health care and changes in taxation. Not sure if this is actionable or violating political views, but a lot of FIRE assumptions are based around capital gains remaining the same and being able to enjoy lower taxes on stock returns, and who knows how that works out over a long life.

If I was going to be retired with no income for 50 years it would be tough to just assume that personal health couldn't get worse / more expensive, that we would continue to tax everything the same way and that inflation would remain between 2-3%. I think she is just repeating Pascal's Wager here.
I am not that sure how is employment going to protect us in case of black swan events.
2008 or the great depression came with massive layoffs, not only with stock market crash.

As for being conservative, there are 2 types of people:
1. those who are conservative with money
2. those who are conservative with life

Looking at statistics (based on history) and simple truths (you can generate money but not life) apparently the later are better off.
Last edited by Starfish on Mon Oct 01, 2018 1:36 pm, edited 1 time in total.
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Re: Suze Orman - "I hate the FIRE movement."

Post by simplesimon »

When I read the post I thought about FIRE as it relates to people in their 30's a la Mr. Money Mustache and and a recent NYT article, not someone in their 50's. Funny how that goes. I'm in my 30's.

I agree with Orman a little bit because the cost of healthcare is something every 30-year old I've met underestimates.

Edit: After reading some more posts I see that in the interview (thanks Irisheyes), Orman actually is talking about the demographic I was thinking of!
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Re: Suze Orman - "I hate the FIRE movement."

Post by deltaneutral83 »

lostdog wrote: Mon Oct 01, 2018 1:08 pm She'll say anything to stay in business. Just more click bait comments that aren't true.
Some of the BH community would do a lot of good to understand context and audience for people like Orman/Ramsey. More than 90% of the population has no where close to 10x income by aged 65. FIRE'ing early is simply laughable for over 90% of the population. Some of us take it personally every time a news personality gives financial advice that would benefit the masses.
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Re: Suze Orman - "I hate the FIRE movement."

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deltaneutral83 wrote: Mon Oct 01, 2018 1:43 pm
lostdog wrote: Mon Oct 01, 2018 1:08 pm She'll say anything to stay in business. Just more click bait comments that aren't true.
Some of the BH community would do a lot of good to understand context and audience for people like Orman/Ramsey. More than 90% of the population has no where close to 10x income by aged 65. FIRE'ing early is simply laughable for over 90% of the population. Some of us take it personally every time a news personality gives financial advice that would benefit the masses.
If you listen to the interview, you'll see that Suze was squarely taking aim at the FIRE community. She said that $1 or $2 million is not enough for anyone to retire 'early' safely. That's far above the median net worth, including home equity, of 65-69 year olds, which is roughly $210k.
Last edited by willthrill81 on Mon Oct 01, 2018 2:04 pm, edited 1 time in total.
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Re: Suze Orman - "I hate the FIRE movement."

Post by arsenalfan »

She's a firebrand spitfire and a bit "sensational" - easy to see why she was such a magnetic personality and prolific hit. A bit too ranting for my style, but I digress...

I listened to her on Stacking Benjamins last week, and she basically profiles her rapid ascent to multimedia financial guru. Then burnout/need to role model that you work to live, and not live to work -- and that once she had $MMs, she went and bought an island and chilled for a couple years. I don't begrudge her that, sounds good to me!

Then she says the #metoo movement rekindled her mojo. You can call her opportunistic/bored/whatever, but she came out of retirement to help women feel more empowered in their finances - hence her show at the Apollo on the Oprah Winfrey Network, and her new book for women on finance. Cynics will say she was just shilling her book...which I hear is a bit condescending and traps women in a 1950s' June Cleaver kind of relationship...but hey, I suspect that will find a target audience.

TL;DR: Basically I think she's found a focused audience in women now, and teaching them the basics of Personal Finance. And while I don't enjoy the delivery, I appreciate the content. At least it's one more person addressing LBYM, make a budget, save, invest simply, etc etc.
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Re: Suze Orman - "I hate the FIRE movement."

Post by bligh »

deltaneutral83 wrote: Mon Oct 01, 2018 1:43 pm
lostdog wrote: Mon Oct 01, 2018 1:08 pm She'll say anything to stay in business. Just more click bait comments that aren't true.
Some of the BH community would do a lot of good to understand context and audience for people like Orman/Ramsey. More than 90% of the population has no where close to 10x income by aged 65. FIRE'ing early is simply laughable for over 90% of the population. Some of us take it personally every time a news personality gives financial advice that would benefit the masses.
You realize that for that 90% of the population the prospect of spending $300K-$1mil/year in retirement consistently for years at a time (like she describes in the podcast) is even more laughable right?

She says that she hates the FIRE movement, but if you listen to her, she is basically saying you should not hope for LeanFIRE (bring your expenses down to $40K or less per year) or BarristaFIRE (Work part time/low stress jobs to get Health Care and supplemental income), or FatFIRE ( Live comfortably off your retirement at your current or an upper middle class or higher expense level .. "$80K/year is not going to be enough") but instead only say you're done if you can pull off moFIRE (morbidly obese FIRE). According to her, the only safe FIRE is mo FIRE.
Last edited by bligh on Mon Oct 01, 2018 2:08 pm, edited 2 times in total.
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Re: Suze Orman - "I hate the FIRE movement."

Post by harvestbook »

arsenalfan wrote: Mon Oct 01, 2018 1:54 pm

TL;DR: Basically I think she's found a focused audience in women now, and teaching them the basics of Personal Finance. And while I don't enjoy the delivery, I appreciate the content. At least it's one more person addressing LBYM, make a budget, save, invest simply, etc etc.
It's the first financial guru-type person my wife ever listened to, for that reason, but once was enough.

So 25 percent unemployment is because a fourth of the working population retired early? Seems legit. And what if health care becomes cheaper, or we have single-payer health insurance, or AI's success leads to Basic Income payments or...

Her negative speculations are just as easily offset with positive guesses. I agree that every choice carries a risk, but missing much of your life and freedom out of fear is also not high on my list. The actionable part is deciding what risks are acceptable to you, whether you're 30 or 70.
I'm not smart enough to know, and I can't afford to guess.
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Re: Suze Orman - "I hate the FIRE movement."

Post by Irisheyes »

willthrill81 wrote: Mon Oct 01, 2018 1:52 pm

If you listen to the interview, you'll see that Suze was squarely taking aim at the FIRE community. She said that $1 or $2 million is not enough for anyone to retire safely. That's far above the median net worth, including home equity, of 65-69 year olds, which is roughly $210k.
Here is what she exactly said:

"Listen everybody, I know you want to retire at 25, at 30, at 35. Here is the problem as I speak to you at 67....as you get older...things happen...you get sick...If you only have a few 100 k or 1 or 2million i doubt highly...if a catastrophe happens...what are you going to do?"

She was clearly talking to a younger demographic enamored with the idea of extreme frugality as a very early route out of the rat race, inspired by the likes of Mr. Money mustache. She is sounding a cautionary note.

Granted, she does go on to speak about having to spend 2.5m on her elderly mother in her dying years....so arguably then that amount isn't enough for even for the eldest. But it's clear that the focus of her address is to a pre-retired group of millenials.
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Re: Suze Orman - "I hate the FIRE movement."

Post by badger42 »

Keep in mind that Suze Orman is a successful author but a terrible investor.

If you have her portfolio (almost 100% muni bonds), you do need quite a bit more than $2m-$3m to FIRE.

If we assume munis get you a zero real return (might be too high), and a 50 year retirement horizon (FIRE at 45, cover until 95, inflation adjusted withdrawals), your SWR is closer to 2%. Given how low muni yields are, it's likely there's actually a bit of negative real return in there, and 1.5% is closer to reality to cover your black swans - so that puts you in the $6m-$7m range to net $100k/yr.

The standard 4% SWR assumes a pretty substantial equity allocation, especially for longer time windows. To get the same $100k/yr if you follow the 4% SWR (which is actually quite conservative, since spending tends to decrease with age), you "only" need $2.5m.

So.. she's right, if you invest like her. The "not all that lean" FIRE crowd hitting the $2m-$3m number is quite safe, as long as they invest well and avoid major behavioral mistakes (such as selling after the crash).
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Re: Suze Orman - "I hate the FIRE movement."

Post by Earl Lemongrab »

I was a fan of the old CNBC show. She was at least 90% Boglehead. The main problem with her advice here was the dislike of bond funds. Otherwise, it was pretty standard advice. Index funds (that's where I heard of Vanguard first), use your 401(k), stay out of bad debt, live within your means, all that good stuff.

I also think the accusations here that she is doing this out of some self-serving reason are not credible. That being said, I think it's a bit over the top. I do agree that some of those ultra retire early goals are very risky. Retire by age 40 with an budget of 20k/year or whatever. However, people retiring with a modest spending goal and substantial savings aren't going to need to work until 70.
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Re: Suze Orman - "I hate the FIRE movement."

Post by MJS »

camillus wrote: Mon Oct 01, 2018 12:54 pm This is a near apocalyptic scenario. Unemployment in 1933 was 25%. Most retirees major source of income is and will be social security. I don't know what justification she has for her beliefs, but it is a pretty wild projection.
Her justification is probably automation replacing human workers: robots, artificial intelligence, etc. For 70 year olds, this is great: a Jetson-style robot instead of a poorly paid aide. For 30 year olds, strategies include educational & experience diversification, voting for industry or government support for displaced workers, and the gig economy.

Unemployment while agricultural & industrial mechanization took place may have been even higher than 25%, but not everyone was hurt.
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Re: Suze Orman - "I hate the FIRE movement."

Post by jehovasfitness »

Tamales wrote: Mon Oct 01, 2018 1:17 pm re: She believes that unemployment will be 25% in a decade or two, and that tax rates will increase dramatically.

Some of the people who hype AI and automation make similar forecasts, and a tax rate increase would presumably follow due to the smaller contribution base. I bet an article about that wouldn't get this many posts, or would have been locked already as non-actionable.
Just came to say same. In the coming decades AI will leave many without jobs and needing to shift.

Just look at coal industry now.

Trucking industry is next
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Re: Suze Orman - "I hate the FIRE movement."

Post by Toons »

She believes that most people should plan on working until age 70.
And she gets paid to say words like that?
Pass.....

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Re: Suze Orman - "I hate the FIRE movement."

Post by willthrill81 »

Irisheyes wrote: Mon Oct 01, 2018 2:08 pm
willthrill81 wrote: Mon Oct 01, 2018 1:52 pm

If you listen to the interview, you'll see that Suze was squarely taking aim at the FIRE community. She said that $1 or $2 million is not enough for anyone to retire safely. That's far above the median net worth, including home equity, of 65-69 year olds, which is roughly $210k.
Here is what she exactly said:

"Listen everybody, I know you want to retire at 25, at 30, at 35. Here is the problem as I speak to you at 67....as you get older...things happen...you get sick...If you only have a few 100 k or 1 or 2million i doubt highly...if a catastrophe happens...what are you going to do?"

She was clearly talking to a younger demographic enamored with the idea of extreme frugality as a very early route out of the rat race, inspired by the likes of Mr. Money mustache. She is sounding a cautionary note.

Granted, she does go on to speak about having to spend 2.5m on her elderly mother in her dying years....so arguably then that amount isn't enough for even for the eldest. But it's clear that the focus of her address is to a pre-retired group of millenials.
Had she said something like "I believe that 30 year olds with $500k of investable assets who are planning on living on $20k annually for the rest of their lives are taking on a lot more risk than they are aware of," we wouldn't be discussing it here as most would agree. But she later extended that to an example of a 55 year old. There's a big difference between a 55 year old with $2 million and a 30 year old with $500k.
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Re: Suze Orman - "I hate the FIRE movement."

Post by KyleAAA »

I agree the risks are downplayed too much by the FIRE movement, but this is the opposite extreme. If you can get your expenses down into the 3% range, you should be safe from most shocks. The 4% often advocated by the FIRE movement is too high, though.
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Re: Suze Orman - "I hate the FIRE movement."

Post by Earl Lemongrab »

Toons wrote: Mon Oct 01, 2018 2:40 pm She believes that most people should plan on working until age 70.
And she gets paid to say words like that?
Not really. She's retired.

Like several here, I haven't actually heard the comments. If it was something I could read I would, but I don't like podcasts. I gather that people are focusing on this age 70 comment when it wasn't really the essence of the comments.

I also don't get this "came out of retirement to say this". She was a guest on a podcast. Does Bogle "come out of retirement" every time he's a guest on a show or makes a video?
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Re: Suze Orman - "I hate the FIRE movement."

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