Success From the Ground Up

Suze Orman, one of America's favorite financial advisors
March 29, 2009

Suze Orman is one of the world’s most influential people, according to Time magazine, and the top female motivational speaker in the United States, according to BusinessWeek. She has won two Emmy Awards for her TV talk show and five Gracie Awards for her work in television and radio. She’s written seven consecutive best-selling books and has helped PBS raise more money than any other fundraiser in public television. Clearly, when this certified financial planner talks, people listen.

But the fame and fortune Orman has earned during more than two decades are not what she expected from life. Following a modest childhood, a relatively normal college experience and a seven-year stint as a waitress, Orman’s life was forever changed the day she applied to be a broker for Merrill Lynch. The event that led her to that brokerage firm was something many people can relate to—a crushing financial loss in the stock market.

Learning the Hard Way Orman, who earned $400 a month as a waitress, had a dream to open her own restaurant. While working at the Buttercup Bakery in Berkeley, Calif., Orman befriended many regular customers. One day, she mentioned her dream to a longtime customer named Fred Hasbrook. She told Hasbrook she’d asked her parents for a $20,000 loan to start a restaurant, only to be reminded that though they would do anything they could for their daughter, they simply didn’t have that kind of money to loan. Hasbrook spoke with several other regular customers. Before leaving, he went up to the counter and handed Orman a personal check for $2,000. Orman was shocked to see that Hasbrook and several other customers had written checks and commitments totaling $50,000. Along with the handful of checks was a note that read: “This is for people like you, so that your dreams can come true. To be paid back in 10 years, if you can, with no interest.”

Unsure of what to do with that much money, Orman took Hasbrook’s advice to invest it in a money-market account with Merrill Lynch. A waitress with a degree in social work, Orman knew nothing about investing at this point—her personal checks were prone to bounce. So when she visited the brokerage firm’s Oakland office and the broker agreed to invest it for her—better yet to help her “make a quick $100 a week”—she signed a blank form that allowed him to handle her money.

At first, things went well. As her investment grew, she picked out a location for her restaurant and began working on building plans with an architect. She also watched the stock market and began learning all she could by reading The Wall Street Journal and watching Wall Street Week on PBS. After three months of increases, the markets soured. Orman says she had told her broker upfront that she only earned $400 a month and could not afford to lose the money—but that’s what happened. She lost everything.

Orman was devastated and angry, but the experience gave her an idea: She could do at least as well as the broker who’d lost her money. So, rather than give up, she applied for a job as a broker at Merrill Lynch. “It was an all-male office except for female secretaries. The manager told me when he interviewed me that he thought women belonged ‘barefoot and pregnant,’ and that in his opinion, I would be out of there in six months,” Orman says. But six months at the $1,500 monthly salary he offered was equivalent to almost two years of waitressing. She realized she would come out ahead even if she lasted only six months.

In the months and years that followed, Orman took that opportunity and created an extraordinary life. She paid back the people who loaned money to make her dream come true, not knowing how that act of generosity would eventually impact millions of people’s lives. Despite the ups and downs she has experienced, she says, “I do not have any regrets. Everything happens for the best. Every ‘no’ leads you closer to the ‘yes’ you were meant to have.”

Through failure and success, Orman learned much about herself and, of course, about money. She has helped shape the way America views female financial advisors, and has influenced the way millions of people—particularly women—save and invest. And through her life’s journey, Orman has discovered and applied three principles that shaped her course: Find your niche and become an expert; do the work; like who you are and what you do.

Become an Expert The process for becoming a stockbroker took time and training. While still in the training stage, Orman attended weekly sales meetings.

“I’ll never forget: Tuesdays at 1 o’clock. I remember sitting there with the male brokers. They talked about sales ideas, and I thought ‘I cannot believe I’m sitting in this office with all these financial advisors, these people I look up to.’ I got this feeling of wow. I’d been admitted into this elite group of people and I could not believe I was there,” she says. “It was such an extraordinary feeling, and I remember thinking ‘I like how I feel. This is great, this is exciting, and I can really help people.’ ”

Orman says she acquired a thirst for learning. She devoted her time to studying for the stockbroker’s Series 7 exam and learning how to excel in her new career. Once she’d passed that hurdle, Orman found a niche that served her clients well.

“I started to specialize in an investment called single premium whole life,” Orman says. “I loved it!” She describes the product as a legal tax loophole that allowed people to invest with minimal risk and high returns. Then one day, while listening to a radio talk show on KGO in San Francisco, she heard another financial expert answering callers’ questions about single premium whole life. “He was answering them 100 percent wrong. I was outraged,” Orman says.

She wrote a scathing three-page letter to the show’s host, Jim Jorgensen, outlining the points the guest advisor had explained incorrectly. A short time later she got a call from Jorgensen who invited her to come on the show and explain the product. “The next Saturday I went down there and did a show. After that, my phone started to ring off the hook,” Orman says. Other radio shows and TV shows requested that she come on as a guest expert. “Everybody all of a sudden wanted me on their show, because at that time, I was the only one who had mastered how this investment truly worked. It was one of the greatest investments around.”

Do the Work—the Results Will Follow Like other financial advisors, Orman had to be versed in a wide range of investment options and products, but she worked at becoming an expert in particular areas of focus. This strategy served her well when she conducted retirement seminars. “Pacific Gas and Electric came to Merrill Lynch’s Oakland office and asked if any financial advisor there would like to give a seminar to their employees who were going to retire. Nobody wanted to do it,” she says. “Word had gotten out that it was a waste of time. Advisors would go give a seminar, spend all this time and nobody ever retired from PG&E, so they never made any money.”

Undaunted, Orman agreed to give the seminar. She studied the organization’s retirement plan and put together a small booklet explaining it to give to each attendee. “It was a tremendous success. And, of course, nobody retired. But I didn’t care because I had a really great time doing it,” she says. PG&E’s employees were so impressed by Orman’s presentation she was asked to conduct the seminar at locations around the state. “Before you knew it, it took me four full weeks to give all the seminars, and nobody was retiring,” she says. Orman was asked back year after year. Then in 1987 PG&E laid off 10,000 people. “And guess where they all came? I did the seminar for five years and never made a penny. But my reputation kept growing. Before you knew it, the other brokers went to PG&E asking if they could give a retirement seminar and they said sorry, ‘Suze’s our girl.’ ”

Orman opened her own firm in 1987 and used her mastery of single premium whole life to help her new PG&E retirees. “It was the most brilliant thing I’ve ever done, and I made a fortune. And the people made a fortune,” she says.

Those seminars as well as her appearances on radio and TV shows opened doors to new contacts and helped Orman develop her public-speaking skills. The exposure also eventually put her in touch with the people who would help her publish her first book, You’ve Earned It, Don’t Lose It: Mistakes You Can’t Afford to Make When You Retire. “That book went on to sell more than 100,000 copies in hardback in the first year,” Orman says. “That was the start of everything.”

Like Who You Are and What You Do In those early days as a broker trainee, Orman liked what she did. She liked helping people take control of their finances. When her first book sold so many copies, Orman realized the potential that existed for helping people en masse. Up to that point, her goal in publishing a book was focused on impressing and equipping her clients.

While her book was in bookstores, Orman began teaching a class she called The Nine Steps to Financial Freedom. “I started to teach this class, and the women went off the charts with it. I was teaching them the nine steps that I put my clients through,” she says. In 1997, Orman released her second book, The 9 Steps to Financial Freedom. The book became a best-seller, eventually selling more than 3 million copies. “It was at that point that I made the change from being a financial advisor who wanted simply to give a book to my clients to a No. 1 New York Times best-selling author,” Orman says.

She has since written six other best-selling books, including her newest title, Suze Orman’s 2009 Action Plan: Keeping Your Money Safe and Sound (Spiegel & Gran) which hit No. 1 on The New York Times Best-Seller List three days after its release. “I think at this point, when people see my picture—and I don’t say this egotistically, I’ve worked very hard for this to be true—they know that whatever it is, they can trust that it will help them,” Orman says. That degree of influence is something she takes seriously. “I feel the responsibility of trust on my shoulders. The more trusted I am, the more seriously I take that responsibility. It’s a feeling that I owe it to them to never disappoint them. I owe it to them more now than I ever did,” she says. “Once you’ve earned someone’s trust, the key is to keep their trust and never, ever, ever disappoint them.”

Living with integrity and knowing what she thinks and believes are hallmarks of her success. “Liking who you are and liking what you do can make you an incredibly successful person. That is how I define success. I would not define it financially. You can be a really successful person and never really have a penny to show for it,” she says.

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