In this article we are going to learn about Suze Orman’s 9 Steps to Financial Freedom. I will be explaining each step in full detail and then giving you my opinion on how the step is/isn’t applicable to personal finances and benefiting you. 9 Steps to Financial Freedom is a book that Suze Orman wrote in 1997. It is now over 10 years old but has stood the test of time and is still liked by many today.
Suze Orman’s 9 Steps to Financial Freedom:
Step 1 – Seeing how your past holds the key to your financial future
In Orman’s 1st step of her book she talks about how most people have some past memory that effects the way they perceive money and finances. In this chapter she helps you to realize that past memory and move on from it so that you can start new with your personal finances.
This steps to be a bit off and useless for most people. There are some people who have bad memories regarding money but in general most people are just to lazy and undisciplined. For most people it is an issue of motivation and not an issue of a bad experience. This step could be helpful to some people to get them started but it not broad enough to be applicable to a lot of people.
2 – Facing your fears and creating new truths
Here Orman makes a connection with the first step in the book. Orman has her readers look at their past memories and see how they cause them to act toward money in their current life. Orman suggests writing out a list of your money related fears and then realizing how to overcome these.
Again, I find this step to be more of a mental exercise for those that need it but not to be widely applicable to all people. The first two steps in her book seem to be more related to a traditional self-help type book and not a personal finances or financial planning book.
Step 3 – Being honest with yourself
In the third step of Suze’s book she goes into detail about budgeting. Suze suggests getting all of your past records and realizing where you money has gone over the past 2 years. The plan is to use previous records to determine your budgeting plan for the future.
This step is extremely good and something we should all consider. Setting up a budget to track our income in the most basic and important step in starting on a quest for financial freedom. The only issue here is having 2 years of old records. If you do not have 2 years go with whatever you have to make estimates for the future.
Step 4 – Being responsible to those you love
In step 4 Suze talks about setting up your money so that it can help your loved ones if you were to pass away. The basic setup of this step tells you all about insurance, estate planning, trusts, and wills.
I find this step to be very important but it seems to be out of place. I think that before you can begin to plan for others once you are gone you need to get your own personal finances in order. If you do not get your own finances in order you won’t have anything to leave to your heirs and it will be useless. Steps 4 & 5 should be switched.
Step 5 – Being respectful of yourself and your money
Here Orman focuses on helping her readers sort through and organize their own finances. This chapter includes information on putting money towards retirement, eliminating debt, and many other things. Orman writes how taking control of your finances can make you feel a whole lot better about yourself.
This is another one of Orman’s best steps out of the whole book. This is the most important step in achieving financial freedom. Without the proper savings, debt elimination, and future financial planning people cannot even start to think about financial peace.
Step 6 – Trusting yourself more than you trust others
This step talks about how people should trust themselves over others when making financial and investing decisions. It says that people should always go with their gut-feelings too.
I find this step to be completely inaccurate. People should always seek out the proper advice about financial planning from experts and have all moves planned out rather than going with a gut-feeling at any moment. I think that all people should have a personal financial advisor to help them with their finance and investing decisions. It is important to note that a financial advisor is only an advisor and all final decisions should come from you.
Step 7 – Being open to receive all that you are meant to have
In this step Orman goes into detail about money not bringing happiness but the opposite being true. It also goes into detail about the joys of donating to charities.
Here Orman contradicts many statements from the earlier in her book. In earlier parts of her book she continually talks about happiness and feeling better about ones self but then says the opposite here. She says that you get happy first and then you achieve financial freedom. What does that even mean? The two are completely independent of each other in both ways.
Step 8 – Understanding the ebb and flow of the money cycle
Here Orman writes about how sometimes all the tough and bad times in our lives teach us really good lessons for our futures. She talks about how to make the most from our past failures to see success in the future.
I think that Orman hits the nail on the head with the accuracy of her 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 she writes about how the real value in life does not come from money and wealth.
Again, I feel this section contradicts some of what Suze says throughout the book but I also think that it is 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 mindset about it. It is more of a self-help book for these people.
Her books give very little true financial advising plans and there is not much mechanical substance to it. I would not suggest this book for people looking for the nuts and bolts about personal finance advising. For these people I would suggest something by a different financial advising expert.