577 Suze Orman Rethinking How People Save

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns, and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Welcome back to Breaking Banks. I’m your host, Brett King. And yeah, we’re the world’s number one fintech podcast, so give it up.

No, seriously, we thought today, you know, we’d introduce you to one of our partners strategically at Provoke Media. And you may have heard some of their segments previously on, but this was a great one. It was Jen Tescher, who’s the president and CEO of Financial Health Network on the Emerge Everywhere podcast with Susie Orman.

And it’s a really interesting conversation. They talk a lot about inclusion and those sort of things that’s happening. It’s really even more important right now for us to think about some of those issues, given the wildfires in California and so forth.

A lot of people are going to be affected by that. And I think increasingly the problem with affordability and all of that comes into play. So interesting to have a dynamic with someone like Susie Orman on the show.

But let’s take you straight to that segment with Jen Tescher and the team at Emerge Everywhere. As we mark 20 years of financial health this year, we’re reflecting on the changes we’ve seen over the last two decades, including how we think about personal finance. Spending, saving, borrowing, and planning for the future look far different today, with a wealth of solutions and resources available to manage your money with the click of a button.

In this episode, I get to engage with Susie Orman, a renowned expert on personal finance and co-founder of Workplace Emergency Savings Platform, SecureSave. We cover a wide range of issues, the role of government and employers, whether technology makes it easier or harder to manage one’s money, and the role AI might play as a financial co-pilot. You often hear Susie described as a personal finance guru.

And in Hinduism and Buddhism, a guru is a spiritual teacher. Having now had the opportunity to engage with Susie several times over the last few months, I have really come to see her as a wise soul. Susie Orman, welcome to Emerge Everywhere.

Thank you so much, Jennifer. Let’s rock the house tonight. Let’s do it.

I’ve had a couple of chances to talk to you leading up to this recording. And I have to say, I feel like you’re my new best friend. You want to hear something strange? When I knew that I was going to be doing this podcast with you, I was like, oh, good, because I’ve missed her.

The last time we did that recording, we had a great connection. And the connection really was our desire to help people, financially speaking, and to do it in a way that was valid and relevant and honest and with great intention, which is what really brought the two of us together on that best friend feeling level. Thank you.

I agree with that. And it’s just a thrill to have you on the show. So I saw a recent interview you did with Mika Brzezinski on Morning Joe, where in addition to telling her that she should quit her Starbucks habit, you drew what I thought was a really important distinction between the health of the national economy and people’s individual economy.

Tell us a little bit more about what you meant by that, what you’re seeing out there in the world. You know, so many times we watch these shows or we listen to the pundits and they’re telling you on CNBC, everything’s great, everything’s doing well. We have low unemployment.

We have the stock market that’s at the top. We have all these great things happening in the economy. And then we talk to thousands of individuals, especially on the Women & Money podcast that write in to me, and they can’t pay their bills.

They’re living paycheck to paycheck. They’re never going to be able to buy a home. They don’t know if they’re ever going to be able to retire.

They’re taking Social Security early so that they can just get by. And so if you look at it on a personal level, what people, forget the economy, what people are living like in today’s economy with over about 70 percent of the people in the United States of America, not even having $400 for an emergency. If you ask me personally, people are not doing well.

The majority of people, sure, you have all these rich people that have all this money and nothing matters to them. But if you look at the everyday working person, I think we have struggles on the horizon. And have you ever seen such a big gap between the macro and the micro indicators? Or is this just yet another cycle that we’re living out? I think it’s another cycle that we are living out.

I mean, if you go back to the 2007-2008 depression, that’s when a lot of people, rich people, got even richer. Are you kidding? Everything crashed. They had the money to buy the homes that were selling at a quarter of the price.

I mean, $700,000 homes in Tampa, Florida were selling for $100,000. You had a home in Lighthouse Point all over in Florida that were $150,000. You could pick up for $5,000.

So it was during that time, truthfully, in my opinion, that people who had money were able to take advantage of it and they made a fortune. And I have to tell you, that includes me. That includes me.

I had the money to go in and buy the stock market tremendously at that time. And that looked at what happened starting in 2009, when it started to take off and you had like almost a 14% annual return on the market starting then. But during that time, the people that lost their homes, lost their retirement accounts, lost their 529 plans, and literally had to exit them, they never went back in.

And so they really today, believe it or not, stemming from back then, are the ones who are suffering the most today. Because then they got afraid of ever buying a house again. They got afraid of ever entering the market again or putting money in a 529 plan.

And they just decided, oh, I know, I’ll just stay in cash. And then we had interest rates go all the way down to zero. Because they were pretty high in 2007, 2008.

And then they couldn’t even live off of the money in their CDs and everything. And so, no, it’s been a horrific time for really the masses, if you ask me. Yeah, that’s really interesting.

Our research shows that people actually did pretty well during COVID in a counterintuitive way, because the government came in and really amped up the safety net in a way that would be nice, maybe if they did that all the time. And then COVID’s over, and now they’ve pulled the rug back out from under folks. And so I’m curious if you’re seeing that from the folks that you talk to with your daily show.

Absolutely. Are you kidding me? Part of the reason we’re in this situation, believe it or not, that we are in, maybe because of what happened during COVID. Many people actually made more money staying at home by their unemployment checks, all these checks that came in not only for themselves, but for their spouse, for their kids, if they had it.

And that money went into savings accounts because there was nothing for them to spend it on. They didn’t have a choice. If they were working still, then they didn’t have to go to work.

At the office, they got to stay home. Many of them got paid even just to stay home, even if they weren’t working, so to speak. They didn’t have to spend money on clothes, on gasoline, on food, anything.

They didn’t have to spend money on their mortgage payment, their student loan payment, their car payments, their insurance payments. Everything went on moratorium. They were able to actually access $100,000 from their retirement accounts and not have to pay that back for three years or pay the taxes on it for over three years.

But if you’re going to pay taxes on that money at a time when you’re in the lowest tax bracket of your life because you’re not making any money in those situations, many people took advantage of that to just blow the money or put it in their savings account. Now the world opens up again, and now they have deprivation from having any stimulus for all that time. They go out and start spending money like they never had before, but that’s the exact same time that if they wanted to buy a car or whatever, cars were 30% more expensive, especially used cars.

Houses started to skyrocket. Interest rates were absolutely skyrocketing, so everything cost them more, and they didn’t realize how much more it was costing them. Before you knew it, they spent all of that money, but their behavior didn’t change.

So then what did they do? They started to put things on their credit cards, pay the minimum payment due. Now their savings accounts are empty, their emergency funds are gone, and their credit cards have absolutely exploded. So let’s talk a little bit about behavior for a minute because you’ve really spent your career equipping people with the tools to help them achieve financial security really by encouraging them to focus on their own behaviors, giving them knowledge so that they understand, but then focusing on their behaviors, like Mika and the Starbucks as an example.

But we’ve also just talked about factors that influence people’s financial health that may be outside of their control, like access to good-paying jobs or economic factors like inflation, or frankly, even their identity or the neighborhood they live in or where they grew up. How do you balance out this issue of sort of personal finance with societal finance? What role should the government be playing in helping Americans achieve financial well-being versus this is really about people changing their own behaviors and it’s sort of all on them? So here’s what’s interesting, and it’s not an exact answer to your question, but I will exactly answer that question. It’s nothing more than I hate when somebody’s asked a question and they don’t answer it.

It’s like it just drives me bats. But anyway, over the past few months and maybe the year with the Women & Money podcast and all the people that also are writing me, what’s really fascinating about the different segment that now are older women that are 50, 60, 70, and 80 that have been with me for the past 25 years, they’re writing me and saying, oh, Susie, we have now, we own two homes, we have $4 million, we have all this money, now they don’t know who to trust it with to invest it. That’s another problem for them, but they are totally secure because why they did everything I told them to do.

And they watched the Susie Orman show every single Saturday night. They watched it with their children and now that subset of society, they are doing so great. It’s not even funny.

They had an emergency fund during 2007 and 2008, and they didn’t just have a three-month one, they had an eight to 12-month one because that’s what I stressed for all those years from 2001 till then, and they had those years to accumulate it. So what was interesting is that those people that listened to me, but they did what I was talking about, are so secure today and seriously financially set. It’s not even funny because they listened when I said, do not count on the government.

The government can’t even save themselves. So if you think the government is going to save you, I have a bridge to sell you. And they believed me.

I said, you have to have all these things I told them to do, and they did it. And now they’re fine, and they’ll always be fine, no matter what the government or the economy does. So I guess the real question then is, what do we do for this next generation? So the next generation worries me.

And I just saw this big article that was written on me in Dubai. As you know, we were just in with Mika in Abu Dhabi and Dubai. And it was the most extraordinary time, really.

But what worries me and what I said there is, I don’t know who the younger ones are learning from. I get that they’re learning from TikTok, but on TikTok, do those people really know what they are talking about? Because what was fascinating about my advice was, if you have a financial advisor, make sure that advisor has been in the business at least 15 or 20 years, 10 years minimum. Because then they went through 1980, they went through 1987, they went through all of it.

And so they saw markets that went up and markets that went down and interest rates and savings and loans collapsing. They saw it all. If you have an advisor that’s only been advising for a year or two, and the markets have been going straight up, and technology has been skyrocketing because of artificial intelligence, they don’t know squat about what happens when there is a crash.

And all of a sudden, like in 2007 and 2008, the market goes down 50%. Then what? And so I’m afraid that the young ones now are learning from those that haven’t been doing it long enough. And they won’t be prepared for the what ifs.

And so, you know, Jennifer, I’m incredibly concerned about the younger generation. And so here I am, and I’m speaking to you, and I’m about to be 73. And for them now, they don’t have a clue who I am.

In Abu Dhabi, obviously, it was the 50 over 50 who have changed the world, and the 30 under 30 that changed the world. I get up on stage with Mika, and I could look at these young ones looking at me, and I asked the question, be honest, how many of you out there don’t have a clue who I am. And one after another, all 30 under 30 raised their hands.

Well, they knew who I was, trust me. However, they don’t have a clue. So our real thing is, how do we educate them truthfully and in a way that they can relate to? I don’t have an answer for that right now.

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To learn more about the program, submit your resume for a candidacy review at stern.nyu.edu slash MSFT dash breaking banks. I’m curious if you are seeing any up and coming personal finance gurus, kind of like the next generation of Susie Orman that you’re sort excited about. You know, I haven’t really looked for them because my job right now, in my opinion, and my real focus in life are on those that are older, especially the 50, 60, 70, 80, 90 year old woman who really turned over the money to her male counterpart.

And now she’s older and actually speaking, men die before we do. And their spouse has died. They don’t have a clue where the money is.

They don’t know what to do with it. They’re getting this advice of to buy this and buy that. And they’ve heard me say, don’t ever do that.

And they’re wondering why their husbands did it or here they are in a situation after years of being married. And now their husband has left them for somebody younger. And now they’re in a situation where they went through divorce, but they didn’t get anywhere near what they should have gotten.

And now they really are powerless and penniless. And also they’re in a situation, believe it or not, where they’re having to take care of their children. Even if their kids are 30, 40, 50 years of age, a lot of them are like, Susie, my kids just moved back in with me.

My kid lost their job. And now as a woman typically would do, they’re going to spend everything they have on their children. And now they don’t have anything for themselves.

And now we’re faced with a long-term care state. So my whole passion now is focusing on the elderly woman, as well as her male counterpart or her spouse, if they want to come along for a ride. So that’s where really a hundred percent of my attention is at.

That and SecureSave is enough to take up all my time. Well, it’s funny because that’s where I was just about to go. Because through SecureSave, which we can talk about now for a minute, you actually are reaching, maybe not the youngest, but you are reaching that next generation.

So that’s the last time we had a chance to talk, actually, right, was on a webinar talking about the important role that employers have to play in making sure that people have emergency savings and your relatively new involvement with a company that helps employers do that called SecureSave. Talk to us a little bit about your deciding to hook up with them. What about what they’re doing really spoke to you? Well, it’s obvious that the goal of money, in my opinion, you know, is for you to be secure.

There’s only one way for you to be secure, and that’s through savings. And so for the past 30, God knows how many years now, I’ve been saying, you need an emergency savings account. You have to get out of debt.

It needs to be eight to 12 months, like a like broken record. And so out of all the fintech companies that absolutely approached me over the years, it was like, no, right, I’m not doing that. You’re just doing that.

So one day you can take it public and make all this money. And no, when I was approached by Devin Miller and Bassam Saliba, the other two co-founders of SecureSave, and this was really their idea, everything that they said was what I’ve been wanting to do, but I’ve been doing it on a personal level. Therefore, it was a perfect match.

But my role there was not to reach the younger ones or really the employees. My role was to talk to the employers and tell them why this made so much sense and why this was one benefit that I know without a shadow of a doubt your employees not only need, but they want. And it’s the one benefit you are not giving them.

So let’s stop educating people about money within your benefit systems, because if you don’t have money, you don’t want to be educated. And let’s take that money for those courses for at least now and put it towards matching a contribution to your employees’ ability to just save $20 a paycheck. Give them $3 or $5.

Let’s pay them to save. And let’s see if we can change their psychology of understanding what it feels like to save and that they have the ability to save. Because Jennifer, when people don’t think they have the ability to save, they don’t even try.

When they see that $20 a paycheck goes into their own account and their employer is giving them $3 to $5 per paycheck, and by the end of the year, they sometimes have $1,000. And for them to feel what that feels like, now they’ve become addicted to saving. And they raised their $20 payment that they took out to $37.50. I don’t know why that’s what they do, but they do.

And now we’re changing how people feel about themselves, which makes me thrilled. How I am reaching the younger people, however, is that my role in SecureSave is once a company has signed up with us, they’ve instituted this program. If they want me to give their employees a webinar, and I do this for free, it’s just part of it, that I study the benefits of the company.

And then I talk to them. And we just did this with Humana. Humana had the biggest turnouts they have ever had for a webinar.

Thousands of people came, had signed up for it, and it was over the top. And I just did it the other day as well for HSA Bank, that is announcing that they have just signed up to offer an emergency savings account through their entire system, and it will be powered by SecureSave. So just two days ago, I did the exact same thing for HSA Bank and Webster Bank.

Fabulous. Over the top. Great.

I love that. That’s terrific. See, you’re going to continue to be known, not just with us old people.

I’ll include myself in that, unfortunately. You just talked a little bit about fintech and how you, not surprisingly, get approached all the time. I’m curious, when you think about the technology at large, I mean, we turned 20 this year, the organization, that was before the iPhone even existed.

As you think about technology, how has it changed the art of money management? And has it changed it, do you think, for the better or for the worse? I think it has sped up the ability for people to be enticed to day trade, believe it or not. I think you have all these services out there now using artificial intelligence and all these other techniques, and people are buying into these services for maybe it’s $500 a year or $1,500 a year, and these services, many of them, are buy this, all right, now it’s time to sell it and do this and do that. While I think, overall, there are many issues or areas where artificial intelligence can really enhance the research and things, it also can be used in very interesting ways for the younger generation, especially like with Robinhood and certain things that’s enticing a whole different philosophy of investing.

And I’m not sure that’s good. It also scares me in terms of what artificial intelligence will absolutely replace, how many jobs will be replaced by it? And maybe the high-ender jobs, maybe they won’t be, but will you drive into a fast food place anymore? And will you see a person working there? I doubt highly that you will. It will all be robotic and automatically done, which absolutely then improves the bottom lines of the corporations.

But where do people go who need an entry into the workforce? And they start with jobs like that. And then those are the people that I think are going to be hurt tremendously by artificial intelligence. And then I start to worry about, do kids even need a college education anymore? Really? And with the price of colleges, and will they be like, my job’s going to be displaced, so why should I go? Why should I spend this kind of money? It’s a whole, whole different world that we have coming our way very quickly.

Do you think we’re approaching the age of personal finance gurus that are essentially your AI chatbot or an AI co-pilot? Absolutely, without a shadow of a doubt. And are you as concerned about that development as you are about the impact that technology has had on the way in which people are enticed to maybe invest too much or not in the right way? Or do you think that there could be a silver lining here? There could be a silver lining if the artificial intelligence has also been programmed to understand the emotional side of the person that they’re dealing with, the psychological side of the person they’re dealing with, the absolute situation that that person is in. Are they going to get a divorce? Are they going to inherit money? Are they going to have to support their parents? Are they this? Are they that? Is their job secure versus, oh, I have $25,000 to invest, what should I do with it? Because you cannot tell somebody what to do with their money if you don’t know all these other things about them.

And so if artificial intelligence could be devised, and don’t think I didn’t look into creating an artificial intelligence Susie that asked all that questions and were there for the people so that I could continue on after I was no longer here helping them. That’s a possibility one day when I have a second. But if it were done correctly with the right intention, integrity, forethought, and ability to take the whole person’s situation into account, I think it could be fabulous.

I couldn’t agree more. Avatar Susie, who wouldn’t want to have a personal Susie, your voice, your AI chatbot with your voice, your integrity, your sensitivity, your tough love. I love it.

Sign me up. So we got to find somebody who can do that. I had this dream that you would go on, let’s say, your little iPhone and ask Siri a question, and it would be about money.

And Siri would say, I don’t know, let’s ask Susie. Oh my gosh. Susie, I could talk to you all day, but I think this is a really good place to end our conversation.

Thank you so much for joining me on Emerge Everywhere. And Jennifer, I just have to say to you, thank you for being there for 20 years, creating an organization who really does put people first and who really cares about the financial outcome for all. Thank you.

That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our US-based production team, including producer Lisbeth Severance, audio engineer Kevin Hirsham, with social media support from Sylvie Johnson. If you liked this episode, don’t forget to tweet it out or post it on your favorite social media, or leave us a five-star review on iTunes, Google Podcasts, Facebook, or wherever it is that you listen to our show.

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