In this article, we will learn about Suze Orman’s 9 Steps to Financial Freedom. I will explain each step in detail and then give you my opinion on how the step is or is not applicable to personal finance and benefits you. 9 Steps to Financial Freedom is a book that Suze Orman wrote in 1997. It is now over 10 years old, but it has stood the test of time and is still liked by many today.
Suze Orman’s 9 Steps to Financial Freedom:
Step 1: see how your past is the key to your financial future
In Orman’s first step in his book, he talks about how most people have some memory from the past that affects the way they perceive money and finances. In this chapter, she helps you realize that past memory and move on so you can start over with your personal finances.
This becomes strange and useless to most people. There are some people who have a poor memory when it comes to money, but in general, most people are too lazy and undisciplined. For most people it is a question of motivation and not a bad experience. This step might be helpful for some people to get started, but it is not broad enough to be applicable to many people.
2 – Facing your fears and creating new truths
Here Orman makes a connection to the first step of the book. Orman makes his readers look at their past memories and see how they make them act towards money in their current life. Orman suggests writing a list of your money-related fears and then figuring out how to overcome them.
Again, I consider this step to be more of a mental exercise for those who need it, but it is not widely applicable to everyone. The first two steps in your book seem more related to a traditional self-help type book and not a personal finance or financial planning book.
Step 3: be honest with yourself
In the third step of Suze’s book, she goes into details about the budget. Suze suggests getting all your past records and realizing where your money has gone in the last 2 years. The plan is to use past records to determine your budget plan for the future.
This step is extremely good and is something that we should all consider. Establishing a budget to keep track of our income is the most basic and important step in starting the search for financial freedom. The only problem here is having 2 year records. If you are not 2 years old, go with what you have to make estimates for the future.
Step 4: be responsible to your loved ones
In Step 4, Suze talks about setting up your money so that you can help your loved ones in the event of your death. The basic setup for this step tells you everything about insurance, estate planning, trusts, and wills.
I consider this step to be very important, but it seems out of place. I think that before you can start planning for others after you’re gone, you need to get your own personal finances in order. If you do not put your own finances in order, you will have nothing to leave your heirs and you will be useless. Steps 4 and 5 need to be changed.
Step 5: be respectful to yourself and your money
Here Orman focuses on helping his readers sort and organize their own finances. This chapter includes information on putting money into retirement, eliminating debt, and many other things. Orman writes how taking control of your finances can make you feel so much better about yourself.
This is another of Orman’s best steps in the entire book. This is the most important step in achieving financial freedom. Without adequate savings, debt elimination, and future financial planning, people cannot even begin to think about financial peace.
Step 6 – Trust yourself more than you trust others.
This step talks about how people should trust themselves and not others when making investment and financial decisions. He says that people should always follow their instincts as well.
I find this step to be completely inaccurate. People should always seek the proper financial planning advice from experts and have all the moves planned rather than going with a hunch at any time. I believe that everyone should have a personal financial advisor to help them with their financial and investment decisions. It is important to note that a financial advisor is only an advisor and that all final decisions must come from you.
Step 7: be open to receiving everything you are supposed to have
In this step, Orman goes into detail that money does not bring happiness, quite the opposite. It also goes into detail about the joys of donating to charities.
Here Orman contradicts many of the earlier statements in his book. In the early parts of her book, she continually talks about happiness and feeling better about yourself, but then she says the opposite here. She says that first you become happy and then you achieve financial freedom. And what does that mean? The two are completely independent of each other in both ways.
Step 8: understand the ebb and flow of the money cycle
Here Orman writes about how sometimes all the difficult and bad times in our lives teach us really good lessons for our future. Talk about how to make the most of our past failures to see success in the future.
I think Orman hits the nail on the head with the precision of his statements, but again, what does this have to do with the nuts and bolts of financial planning?
Step 9 – Recognizing true wealth
In the last step of Orman’s book, write about how real value in life doesn’t come from money and wealth.
Again, I feel like this section contradicts some of what Suze says throughout the book, but I also think it’s very true.
Overall, Suze’s 9 Steps to Financial Freedom is an excellent book for people who want to learn about the psychology of money and want to change their mind about it. It’s more of a self-help book for these people.
His books give very few true financial advice plans and they don’t have much mechanical substance. I would not recommend this book to people seeking the nuts and bolts of personal finance counseling. For these people, I would suggest something from a different financial advising expert.