In this article we are going to 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 how it benefits you. 9 Steps to Financial Freedom is a book that Suze Orman wrote in 1997. She is now over 10 years old, but she has stood the test of time and is still loved 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 the first step of his book, Orman 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 him realize that past memory and move past it so he can start over with his personal finances.
These steps may be a bit out of place and useless for most people. There are some people who have a bad memory when it comes to money, but in general most people are lazy and undisciplined. For most people it is a matter of motivation and not a bad experience. This step might be helpful for some people to get started, but it’s not broad enough to be applicable to many people.
2 – Face your fears and create 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 about money in their current life. Orman suggests writing a list of his money-related fears and then figuring out how to overcome them.
Again, I find this step to be more of a mental exercise for those who need it, but it’s not applicable to everyone. The first two steps of his book seem to be more related to a traditional self-help 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 detail about the budget. Suze suggests getting all of his past records and finding out where his 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 something we should all consider. Setting a budget to track your income is the most basic and important step in beginning your quest for financial freedom. The only problem here is having 2 years of old records. If you don’t have 2 years, go with what you have to make estimates for the future.
Step 4 – Be responsible with those you love
In Step 4, Suze talks about setting up your money so it can help your loved ones if you pass away. The basic setup of this step gives you information about insurance, estate planning, trusts, and wills.
This step seems very important to me but seems to be out of place. I believe that before you can start planning for others once you’re gone, you need to get your own personal finances in order. If you don’t get your own finances in order you won’t have anything to leave to your heirs and it will be useless. Steps 4 and 5 need to be changed.
Step 5 – Be respectful of yourself and your money
Here, Orman focuses on helping his readers declutter and organize their own finances. This chapter includes information on setting aside money for retirement, eliminating debt, and much more. Orman writes how taking control of your finances can make you feel so much better about yourself.
This is another one of Orman’s best moves in the entire book. This is the most important step in achieving financial freedom. Without proper savings, debt elimination, and future financial planning, people can’t 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 over others when making financial and investment decisions. He says that people should always follow their instincts too.
I consider this step to be completely inaccurate. People should always seek the right advice on financial planning from the experts and have all the moves planned instead of going by intuition 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 all final decisions should come from you.
Step 7 – Be open to receive all that you are meant to have
In this passage, Orman goes into detail about how money does not bring happiness, quite the opposite. He also goes into detail about the joys of donating to charity.
Here Orman contradicts many earlier claims in his book. In earlier parts of the book he continually talks about happiness and feeling better about oneself, but then says the opposite here. She says that you become happy first, 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 hard and bad times in our lives teach us really good lessons for our future. He talks about how to make the most of our past failures to see success in the future.
I think Orman is spot on with the accuracy of his statements, but again, what does this have to do with the nuts and bolts of financial planning?
Step 9 – Recognize True Wealth
In the last passage of Orman’s book, she writes about how the real value of life does not 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 the way they think about it. It is more of a self help book for these people.
His books give very few real plans for financial advice and do not have much mechanical substance. I would not recommend this book for people looking for the nuts and bolts of personal financial advice. For these people, I would suggest something from a different financial advice expert.
