Table Of ContentALSO BY SUZE ORMAN
You’ve Earned It, Don’t Lose It
Suze Orman’s Financial Guidebook
The Courage to Be Rich
The Road to Wealth
The Laws of Money, the Lessons of Life
The Money Book for the Young, Fabulous & Broke
Women & Money
Suze Orman’s Action Plan
The Money Class
A Note to the Reader: As of the publication of this book, all of the information is up to date.
It is possible that in the upcoming years, laws, especially those pertaining to retirement
accounts and estate taxes, may change. In order to remain abreast of current legislation,
please go to the NineStep updates section of my website, www.suzeorman.com. On the site
you may download important information regarding any new financial laws.
This publication is designed to provide accurate and authoritative information in regard to the
subject matter covered. It is published with the understanding that the publisher and author are
not engaged in rendering legal accounting or other professional service. If legal advice or other
professional advice, including financial, is required, the services of a competent professional
person should be sought.
—From a Declaration of Principles, jointly adopted by a Committee of the American Bar Association
and a Committee of Publishers
Copyright © 1997, 2000, 2006, 2012 by Suze Orman
All rights reserved.
Published in the United States by Three Rivers Press, an imprint of the Crown Publishing Group,
a division of Random House, Inc., New York.
www.crownpublishing.com
Three Rivers Press and the Tugboat design are registered trademarks of Random House, Inc.
Originally published in hardcover in the United States by Crown Publishers, an imprint of the
Crown Publishing Group, a division of Random House, Inc., New York, in 1997, and
subsequently published in slightly different form in softcover by Three Rivers Press, an imprint of
the Crown Publishing Group, a division of Random House, Inc., New York, in 2000 and 2006.
Library of Congress Cataloging-in-Publication Data
Orman, Suze.
The 9 steps to financial freedom / Suze Orman.—3rd pbk. ed.
1. Finance, Personal. I. Title.
HG179.0755 1997
332.024—dc21 98-3320
eISBN: 978-0-60960716-9
v3.1
This book is dedicated to my dad,
who through all his hard times kept a smile.
Within his pocketbook, he may not have had as much as many,
but within his heart he had more than most.
Not long ago, I asked my mom whether, when my dad was alive, she
had seen him cry a lot. She thought for a second and said, “Well, he only
really cried when he watched Wheel of Fortune.”
“Wheel of Fortune?”
“Yes,” she said, “when people would win a lot of money, he would be
so happy for them that he would cry.” That sums up my dad—to wish
for others what he wished for himself. This is true generosity. Dad, I
hope you can see me now and are as proud of me as I only wish I could
tell you that I am of you. Mom, I will always be there for you, so don’t
you ever worry, I love you—you are the best.
CONTENTS
Cover
Other Books by This Author
Title Page
Copyright
Dedication
PREFACE
WHAT DO YOU WANT FROM YOUR MONEY?
S 1: S H Y P H K Y F F
TEP EEING OW OUR AST OLDS THE EY TO OUR INANCIAL UTURE
S 2: F Y F C N T
TEP ACING OUR EARS AND REATING EW RUTHS
S 3: B H Y
TEP EING ONEST WITH OURSELF
S 4: B R T Y L
TEP EING ESPONSIBLE TO HOSE OU OVE
S 5: B R Y Y M
TEP EING ESPECTFUL OF OURSELF AND OUR ONEY
S 6: T Y M T Y T O
TEP RUSTING OURSELF ORE HAN OU RUST THERS
S 7: B O R A T Y A M H
TEP EING PEN TO ECEIVE LL HAT OU RE EANT TO AVE
S 8: U E F M C
TEP NDERSTANDING THE BB AND LOW OF THE ONEY YCLE
S 9: R T W
TEP ECOGNIZING RUE EALTH
About the Author
PREFACE
Look back over the past fifteen years and the one constant is change.
Our personal lives, as well as the world we step out into each day, may
bear very little resemblance to where we were, who we were, and what
we thought back then. Change isn’t just inevitable, the degree of
evolution can at times be breathtaking.
And yet if there is one profound lesson I have learned over these past
years, it is that deep down what you want from your life, and what you
may be struggling to make of your life, has not changed at all. I didn’t
have a cable television show fifteen years ago, nor were you and I able
to converse through Twitter. But the same questions I field today on my
show, or when you send me a tweet or e-mail that I field on my iPhone
and iPad—talk about two very big changes!—are exactly the same
questions my clients and I were working through together fifteen years
ago when I was a certified financial planner and wrote this book.
To be sure, the investment vehicles or events that propel you to seek
out my advice are very different. Back then we were just beginning to
get comfortable with mutual funds; now we have next-generation
exchange-traded funds. Back then many of you came to me for advice on
how best to handle a pension distribution. Today very few of you
working in the private sector have a pension; your retirement is instead
going to rely on how well (and how much) you manage to save in your
401(k) and IRA accounts. Back then we had yet to experience the
Internet bubble and the real estate bubble. And I doubt that any of us
could have envisioned fifteen years ago the magnitude of the financial
crisis that began in 2008 and will be reverberating through our lives for
years to come.
But for all that change, you are still striving for the same elusive goal
that brought so many to The 9 Steps to Financial Freedom all those years
ago: You want to stop worrying about money. You want to know deep
down in every molecule of your being that you are going to be okay—
that you and your loved ones will not be weighed down by the pressure
and anxiety of not having enough, or not being in control of your
money.
Those are the very issues that compelled me to first write The 9 Steps
to Financial Freedom. And though I have gone on to write eight more
books in the intervening years, each of them overflowing with detailed
financial advice, it is remarkable how The 9 Steps to Financial Freedom
continues to resonate for me, both personally and as the touchstone for
all the advice I give today.
What I first introduced to millions of you back in 1997—what was
considered so revolutionary at the time—has never been more relevant.
To master your money requires first mastering your fears. And then, as
now, there is no shortage of ways that your fears are holding you back
from achieving financial security. If anything, I think we can agree that
many of the events of the past fifteen years have in fact made us even
more fearful. That is why I am so glad you have come to discover, or
perhaps rediscover, this book. Yes, it is fifteen years old, yet the lessons
in these pages are absolutely timeless and incredibly timely. And rest
assured, the version you have before you has been updated to include
the latest financial data and regulations in effect as of 2012.
It is so very interesting to me that the field of behavioral finance has
become so popular and respected in the years since The 9 Steps to
Financial Freedom was first published. When I wrote this book there were
some people who thought I was a bit out there to suggest that our
emotions play a central role in how we handle money. Now we are so
appreciative of the work behavioral economists have shared with us,
helping us to understand exactly how our emotions—many of them fear-
driven—can cause us to make improper or costly financial decisions. The
emotional component to financial planning has certainly gone
mainstream since The 9 Steps to Financial Freedom was first published.
But why is it that what I shared and taught years ago still needs to be
learned today? For all the people who have come to me with stories of
great triumph and success in taking control of their money, I am all too
aware that many still struggle. I think part of the problem is that what
transpired over the past fifteen years made it excruciatingly hard for
many of you to figure out the right and honest path. In fact, so many
products and the ethos of the time practically goaded you into making
wrong choices. Why live within your means when there was a seemingly
endless supply of credit cards willing to offer you ever-bigger credit
limits? Why save for tomorrow, when you could take out a home equity
line of credit today to pay for anything your heart desired? Why save
more from every paycheck when you figured you could save less because
big market gains would do the hard work? Maybe some of you
remember that the average annualized return for the S&P 500 in the
decade of the ’90s was 18 percent, nearly double the long-term historical
rate of return. But so many people just assumed that 18 percent was
what they could count on going forward. Only to watch the same
benchmark stock index basically gain close to nothing in the first ten
years of the twenty-first century. And who needed to save up for a home
down payment when there was an all-too-eager lender ready to give you
a mortgage with no down payment, nor any responsible consideration of
whether you had sufficient income and savings to honestly afford the
mortgage payments?
Lots of bad choices, lots of bad temptations. And thus, not
surprisingly, still lots of fear. Maybe even more than in 1997.
But that’s why I am so excited you have this book in front of you right
now. Often we need to be scared to take action. And if you are here
because you are scared or fearful or just frustrated that your financial
life—and therefore all aspects of your life—are not as you wish they
were, the nine steps that I share with you are the foundation of
everything you ever need to “learn” to become more financially secure.
Dig deep to explore the emotional underpinnings of how you treat
money, how you think about money, how you save money, and, yes,
how you spend money, and you will unravel the mysteries of why you
are holding yourself back. Yes, you.
There is no question the past fifteen years have been very challenging
—poor stock market returns, a few too many bubbles, and then the
financial crisis. But please listen to me: There will always be challenges.
We don’t know what will go wrong next, but we have to be smart
enough to recognize that bad things will indeed happen. That is not
meant to be depressing. Anything but. For when you can accept the
inevitability of there being downs along with ups, you become more
willing to prepare yourself for being able to best weather the next down.
And the one after that. And the one after that.
The nine steps are what will help you move forward toward a life
