Because Orman is a hypocrite and an idiot. How a bottle-blond former waitress and self-described "55-year-old virgin" with a taste for the good life became the financial messiah for millions of Americans is beyond me.
Consider: Orman "loves" something called "dollar-cost averaging," which involves buying the same stock over and over again as it falls.
"It's a great opportunity for you when the value of the shares drops," claims Orman in the inaptly named "The Road to Wealth," "because you can buy shares at 'bargain' prices and average down your cost per share."
Oh, where to begin? Maybe with the obvious: Since when does throwing good money after bad make you rich? It doesn't.
And although one of Orman's mantras is how much she loves stocks -- "(S)tocks, in my opinion, are the best investment vehicle for the growth of your money over time" -- less than 3% of Orman's net worth happens to be invested in them. Instead, she's tucked away the vast majority of those royalties ($32 million-plus, after taxes) into insured, government-backed bonds.
She has always been iffy when it comes to investment advice, advocating a "sell after small declines" strategy that is coupled with a "buy things that have been on the rise" concept, leaving investors in a position to sell low and buy high.
A favorite Orman statistic is that stocks average 11% return a year. Orman recommends becoming an informed investor by watching cable financial shows such as her own; more disturbing is her ridiculing of people who don't think that financial companies are on their side as "paranoid."
The big problem with Suze Orman is that she appears to be a below-average financial planner. She scores very high on the personality index, but very low on the knowledge and understanding of the complex issues that face a lot of her audience. She's giving generic, simple solutions to people's most difficult problems, and judging from her portfolio, she's taking them on a path she really hasn't traveled herself.
(Orman's liquid net worth is put at about $25 million, with an additional $7 million worth of houses. With just $1 million of that in stocks, it means that just 3-4% of her liquid net worth is in the stock market.
What does Orman do with the rest of her money? When asked, Orman said: "Save it and build it in municipal bonds. I buy zero-coupon municipal bonds, and all the bonds I buy are triple-A-rated and insured so that even if the city goes under, I get my money. I take a little lower interest rate to make sure my bonds are 100% safe and sound. "
As for playing the stock market, Orman said "I have a million dollars in the stock market, because if I lose a million dollars, I don't personally care."
In short, the person being trusted as everyone's financial adviser has a portfolio that few people could live with.
She has also hawked for GM, claiming that leasing a luxury car -- you know, the kind that people drive to impress other people -- is a terrific financial decision: "If you ask me, that's smart money!"
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