Saturday, April 21, 2007

REVIEW: Suze Orman speaks at Detroit Free Press Money 101 Seminar

Today, I went to see finance guru Suze Orman. Suze was the featured speaker at the Detroit Free Press Money 101 Seminar in Livonia. When Suze took the stage, the entire place got an energy that was amazing. I had a seat in the second row dead center so I was up close and personal. This woman really loves what she is doing. She was able to field any question on any money subject that people had. It was amazing to see her in action.

She told the audience that she could have retired long ago, but she loves educating people on the subject of finances. She gave everyone the "secret code" that was available in her latest book to get a deal on setting up an online savings account at TD Ameritrade. If $100 is deposited in the account every month for 12 months, TD Ameritrade would give Suze Orman followers (with the secret code) a special $100 bonus in the 13th month. Now that's a deal that I am going to jump on. It is not everyday that someone gives you money for attending a seminar.

What I learned at the seminar:

1. Don't believe everything you see or read. The Michigan economy is not ALL bad.

2. Check your 401k to see how the investments are allocated. Only 15% of the total should be in your company stock. If you have more, move out at little at a time until you hit your target.

3. Have common sense. Trust no one. Scams are everywhere. Check for a list of recent scams.

4. Your child may be able to get financial aid for college. The formula your finanical aid is based on 22% of your income, 3% assets, 50% of the student's income, and 25% of the student's assets.

5. Invest in a 529 account to pay for college. They have no income restrictions, low impact on financial aid, and state tax advantages. You can have multiple 529 accounts. If your child does not go to college, you pay a 10% penalty on the growth, taxes on the growth, and you get back the principle.

6. A low FICO score is less than 600. A high FICO score is between 760-850.

7. Closing down accounts can negatively affect your FICO score since 30% of the score is based on debt to credit limit. Leave the zero accounts open.

8. Paying your bills on time will raise your FICO score because it accounts for 30% of your FICO score.

9. Adding someone with a good FICO score to your score will increase your score.

10. Dedit Cards don't report to FICO.

11. The 4 must have documents are (1). Will, (2). Living Revocable Trust, (3). Advance Directive, and (4). Durable Power of Attorney. The Living Revocable Trust must have a incapacity clause. The Will will cover anything that is not in the Trust. The Advance Directive gives instructions in case you are on Life Support. The Durable Power of Attorney is used in case you are in the hospital.

12. Real Estate values follow the job market. Other people's misfortunes will affect your home value. 3 Trillion in adjustable rate mortgages are coming due this year.

13. One extra mortgage payment a year changes a 30 year mortgage into a 24.5 year mortgage.

14. Rolf IRA's are best investment if you qualify. You have already paid taxes on the money so you can take the principle without penalty if you need to. After age 59 1/2, all the money is tax free.

15. A good financial plan to follow is 1. Invest in 401k up to the company match. 2. Pay down credit card debt. 3. Invest in a Rolf IRA. 4. Write a Will. 5. Open a Trust. 6. Do a Advance Directive. 7. Do a Durable Power of Attorney 8. Pay off your Mortgage 9. Buy Term Life Insurance (don't insure children).

16. To make $100, go to and use the password 701. This will open a TD Ameritrade accout where you can invest as little as $50 a month for the next 12 months. In the 13th month, $100 will be deposited into the account. The account is insured, has no fees, and gives a 3% return. (This is a limited time offer)

17. Custodial accounts should be setup for minors.