Tuesday, May 31, 2005

Suze Orman

Suze Orman is currently famous for her motivational speeches and books preaching to the layperson about how to be financially responsible. Her most recent book is The Money Book for the Young, Fabulous & Broke. For reasons I've never been able to identify, Suze Orman has always bugged the crap out of me. Really, on paper, she's the kind of gal I should get excited about. She's fashionable. She's hip. She's empowering women by being a role model for financial freedom.

A recent interview with Suze Orman yielded the following question/answer exchange:

Q: What's the number-one positive reason for going into debt?

Orman: Number one, even before a retirement plan, is to save for a down payment and finance a home. A home will provide not only a place to live, but also great tax write-offs. Mortgage interest is tax deductible, as well as property tax. Live in the home two years and the first $250,000 from the sale of a primary residency is tax-free; $500,000 if you own it with someone else.

On the surface, this is a great answer. Buy a house. Save money. The problem is, that her answer is not entirely true. Sure, you can deduct mortgage interest from your taxes, and that's great if you live in a nice house in a big city, like her native Chicago. Back when I lived in Portland, I was happy to deduct my mortgage interest from my taxes and get a sizeable refund. I was also making $70,000 a year, and living in a $155,000 house.

Now, in GradShitTownVille, I live in a 3 bedroom house amid miles and miles of flat farmland. My 1950, 1.5 story house cost $60,000. I'm currently living on my $1500 per month stipend from the university. My monthly mortgage payment, sans mortgage insurance or property taxes, is $280.11 of which the interest is $222. Over an entire year, that interest is nowhere near the standard tax deduction for a single person filing a 1040. So, instead of deducting my taxes, I just take the standard deduction.

I'm not going to complain about my $280.11 mortgage payment. It's far nicer than paying $600 for a shitty apartment with paper walls and loud undergrads for neighbors. I just want to point out that simply because I own a home doesn't mean I get to deduct it from my taxes. It feels like Suze Orman is too caught up in her world, not realizing that poor people live in cheap, little houses which don't amount to anything of value when it comes to tax deductions. It's just another example of poor staying poor.

I kept trying to like Suze Orman until I read the following quote from a recent interview with her. She was describing what it was like growing up with a speech impediment and learning disability. She didn't really start reading books until she was an adult. She describes the effect reading a couple of fiction books had on her,

"I loved the books but I didn't like what they did to me," she said. "Prior to that I hadn't had any other voices in my head - no characters or plots. My life was all just me.

That seems incredibly narcissistic. Reading stories distract her from paying 100% attention to herself and her books about being financially responsible as a rich white person in America. Perhaps if she read more stories, she might find about about the rest of America, and the 35.9 million Americans below the poverty line.

3 comments:

David said...

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David said...

FemaleCSGradStudent as Female and as a Grad Student in CS and who knows things about Computers and Science, FemaleCSGradStudent's RSS feed which is loaded in Safari on the Mac fails to show the newest article on FemaleCSGradStudent's webpage.

David said...

nevermind, they just post in different order. grrrr.