Suze Orman Money Class at TV: taking advantage of the US recession to sale books – Part 2

While living in Montreal, I didn’t have a TV, but I had my laptop and the Internet. That been my reality for a couple of years but I never missed watching TV. I was quite busy working at my multiple jobs, blogging, building my portfolio and following my stocks.

Now that I am move back to my hometown (I had the chance to get a better job, better salary better everything right where I least expected it to come from), I have my mom listening to her TV in the launch and I have my father watching his own channel in their bedroom. Here at night, I hear TV noises one over the other. What I miss the most from Montreal is the dead silence of my one and a half apartment. It was silent, I could hear myself think.

Moving back with my parent wasn’t something planned but while living in this small not even city, moving back with my old folks had been a strategic move. My expenses are lower than over. The only thing that changed is me now driving a car. I have a few related expenses but that’s not a big deal. I am about to get my passport soon and I just cannot wait to travel to the US! I haven’t gone in the US in an eternity. According to what I had heard, the little X town hasn’t changed that much in the past couple of years. I am just extremely curious to go and seek around. It will be fun.

My lifestyle had changed, but the adjustment had gone through pretty smoothly. Since I am from New Brunswick, I knew what to expect. I find myself more relax and calm. While living in Montreal, I was working at different jobs, all paying a terribly low wage, I was burned. The August 2011 stock crash didn’t help me in any way. However, I had the surprised of my life when I learned I got a job here in New Brunswick. But not just here, in my XX hometown. Hitting back to New Brunswick with a job in my field, better paid, better everything, well, it cut my breath away.

And that’s why how I found watching one of the two TV we have here in this house. And there I was yesterday, watching Suze Orman desperately trying to sale her financial books. She gave good advices ok, no doubt about it. I am able to recognize the importance of having an emergency fund even if I don’t have one ok. But yesterday, one man appears at the Money Class of Suze Orman.

The courageous man had 18 000$ in credit card debt and he had 100 000$ worth in student loan debt following a master degree. I don’t get if the degree he took was an MBA. I know MBA are the kind of degrees who are extremely expensive like that. I don’t know. But the guy spoke to Suze Orman about his situation. He was earning 20 000$ a year while holding a master degree. And if I understand correctly, the guy had declared bankruptcy before. And his question seems to be at the time about declaring bankruptcy regarding his huge student loan. Well, good news being that no one can clear off a student loan while declaring bankruptcy. The way Suze Orman was talking to the man, it seem like for him, there was no hope.

Come on! A 100k worth in debt is not the end of the world. Myself, I have close to 90k worth in debt and I can manage everything quite properly. During the past couple of years, my earning salary had exceeded the 40k. But that’s nothing considering how much in tax I had paid on that salary. In a certain way, I am pretty much to the same level of that man who earned 20k annually and have 118k worth of debt.

Instead of explaining to the guy that bankruptcy won’t clear his student loan, Suze Orman should have say something intelligent enough and motivate the guy to get a second and, why not, a third job. I handle 3 jobs at a time for quite a while when I was living in Montreal. And on top of that I was managing my portfolio and I was blogging. I had built my portfolio even if I wasn’t earning much, but what I had earned; I make it work for me.

No one should declared bankruptcy just because of a 118k worth in debt. That level of debt is manageable. It’s just the individual have to seek for another source of income. That’s difficult of course, but once again, it is manageable. I won’t be saying the same thing if we would be talking here about a 200k, 300k or up worth of debt. Anywhere below 150k in debt is manageable. You don’t need to destroy your life and your spirit by declaring bankruptcy. There’s nothing an individual cannot handle, I think I am the living proof of that. But Suze Orman totally goes in the opposite way.

Also Suze Orman said during her yesterday show that student loan debts are the type of debt that an individual should be looking to pay as soon as possible. Why? Because a student loan debt cannot be add in a bankruptcy procedure. So see, for Suze Orman, bankruptcy is the financial solution that resolves all problems. But it’s not the case. Bankruptcy destroyed life, it’s the most difficult event that can’t happen to somebody.

If you take the marvelous me (who’s now a superstar on Raymi the Minx by the way – go check it out), I am on the MINX!! as example, I still carry a student debt loan even now and I don’t give a damn. Why? For several reasons. Here they are:

I preferred to build myself a super portfolio for the future instead paying my debt.

Student loan interest is low (below 5%).

A student loan is not a credit line. Once you make a payment on a student loan, you cannot access the money no more. The money disappeared forever. So why should I stressed about paying a student loan? Please explain Suze Orman!

A student loan interest gives you a tax receipt.

For all those reasons, I decided to completely flush the payment on my student loan. Well, not totally flush, because I make the minimum payment on the loan every months but that all. The payment is of 98$.

I think Suze Orman is out there just to make people feel bad about their debt.
It’s just money after all.

My best advice: manage to make the minimum required payment on your loan every single month. Make sure the total of those multiple minimum payments is reasonable. Mine is something like 400$ only.

Asked yourself: if I would be to go under unemployment insurance, would I still be able to make the minimum required payment on my debt? If the answer is yes, your situation is not that bad at all.

Also, always make sure that you have something worth in term of net worth following an improvised payment on your debt.

My personal example:

Total in assets: 156 233.56$
Total in debt: 87 123.22$
Net worth after debt: 69 110.34$

See, even after I paid off completely my debt, I would still have a little something left.

My personal example is dangerous because I am even lucky to be at this stage. I took several risks that I was aware of. However, I considered myself extremely lucky. You have to handle your debt in an extremely efficient manner that it will make you a winner at the end. But be careful on the amount of debt and ho, please, don’t get under a margin account if you are a stock lover because you will sooner or later satisfy your impulse on your broker margin account. I wasn’t able to control myself and I used more than 40k to purchase, not clothes, not boots (I still didn’t purchase a new pair of boots) , no men BUT STOCKS.

It’s important to turn yourself into a passionate investor because the stock market will bring you to a level of richness you cannot simply imagine. Quite powerful stuff. So powerful that it can ruin you or make you rich. One or the other.

And yes, at 69k net worth, I consider myself quite rich. But don’t forget, I am in New Brunswick. A net worth of more than 50k is considered a million here, or almost.

People need to feel confident about their future but Suze Orman is not helping in any way. And at a point, by emphases too much about bankruptcy, she’s bringing it to nothing.

It’s possible to have debt, be enjoying those debts and have a terrific portfolio. It’s possible and achievable, no matter what Suze Orman has to say. That’s my word over her. And I always get the final word. At least here on my blog. :)