She Turned Missteps Into Profitable Experiences

“The Courage to Be Rich: Creating a Life of Material and Spiritual Abundance� (Riverhead Books, 1999) is the latest bestselling financial advice book from Suze Orman. Her first book, “You’ve Earned It, Don’t Lose It� (Newmarket Press, 1995), is in its 21st printing. Her second book, “The Nine Steps to Financial Freedom� (Crown, 1997), is a New York Times bestseller.

Not bad for a University of Illinois student who worked as a waitress throughout college.

Question: Tell us about your work history before you got into finances.

Answer: In 1974, I got a job as a waitress at this place called the Buttercup Bakery in Berkeley, where I worked for almost seven years. And I thought that’s what I was going to do the rest of my life.

Q: That’s the part I want you to get into--how you changed careers.

A: Well, when I first got hired it was this tiny place that sat maybe 30 people, if that. I started coming up with these ideas, and before I knew it, it expanded to 105 people. All of a sudden, I was watching me making $400 a month and the people who owned it expanding. So it started with the thought that I could have my own restaurant.

Q: How did you secure the funding?

A: This guy who I’d been waiting on for years came in and said “What’s wrong, Sunshine?� I told him the story. He just gave me this look and went back to his jack cheese and ham omelet that I made him every single morning. He came back with a check with a note that I still have that said, “This is for people like you, to have your dreams come true. To be paid back in 10 years at no interest if you can.� He said, “I want you to go down to Merrill Lynch and open up an account.�

Q: How’d you do your first time investing?

A: At first we were doing great. [The broker] made $5,000 like in the first month, and I thought I had died and gone to heaven. My whole bedroom started to be pasted up with the Wall Street Journal options pages. I was starting to put it together, and then January of 1980 came and the oil stocks which he had been investing in started to crash.

Q: Were you still waitressing at this point?

A: No. I had left because I actually had the plans drawn up for the restaurant and was dealing with the [Small Business Administration]. And then the oil crashed, every penny was lost and that was my working capital. That was everything. Gone. I thought, “Oh, now I’m in serious trouble. What should I do?� I got dressed in my blue silk shirt and red and white striped pants tucked into my white cowboy boots--I thought I looked so hot. I was a size 6 at the time. And I interviewed with five brokers. I’ll never forget the looks on their faces. I honest to God didn’t know better. They ended up hiring me at the end of the fifth interview--in my opinion, nobody has ever said this to me, but only to fill their women’s quota.

Q: One of the main points you always emphasize is for Americans to get out of credit card debt. What’s your own credit card history?

A: I went and applied for a credit card at Macy’s and charged my card to the max, $2,000, to buy clothes. I came home and cried because I didn’t know how I would ever pay that off. I would park my car on the street at the meters, not in the lot where all the other brokers parked their Jaguars and Mercedes, because I didn’t know where I was going to come up with the money to pay that monthly parking fee.

Q: Was your financial planning company successful, the one you started in ‘87?

A: When we first opened up, I had a very hard time.

Q: I’ve heard you talk about somebody scamming you in the office.

A: Yeah. You betcha. I did it to myself. I set it up because I trusted her. So she had legal authority to sign certain things and she was signing the contracts. But it was the greatest thing that ever happened to me.

Q: How do you figure?

A: Because when you’re making a lot of money, as hard as you may not want to think it, unless you have incredible discipline, you can fall into the pit of “you are your money� and that you’re special because of your status. I hate to say it--I think that’s what happened to me in 1987. I was making a lot of money. I was extremely successful. And I thought I was hot stuff. And you know what? I needed to be kicked in the booty because otherwise I couldn’t be doing the work that I’m doing today--the work that really matters, that financial people don’t address--the America that’s in credit card debt and wants to get out and save for their retirement but nobody’s paying attention to them because all they have is $50.

Q: Did you get into credit card trouble besides the Macy’s card?

A: Terribly. Totally. Oh, serious credit card trouble, which is why I can write about these things. In ‘87, because of the setback from the employee, I again went into a lot of credit card debt because I wanted people to continue to think that I was successful. So before you knew it, nobody had debt like I did. And that’s when everything opened up. That’s when I started to tell everybody what had happened to me because I had been hiding behind the shame.

Q: Do you still have clients as a personal financial advisor?

A: I have clients from years ago, so if they want something I’ll help them, but no new clients for the past two years.

Q: Do you have a financial advisor?

A: I do, actually. . . . But let me tell you why. I’m traveling so much, I can’t watch my stocks every minute of the day, so the money is with [him]. He doesn’t make one investment decision without me. And I know if, God forbid, something happens to any areas that I have, I’d get a call from him in two seconds and I need to know that.

Q: When you make purchases now, do you use charge cards?

A: Absolutely. But I only do American Express. You can see my wallet. I carry American Express and Visa . . . if they don’t accept American Express.

Q: Has American Express approached you to do a commercial?

A: No. I wouldn’t do a credit card commercial if my life depended on it.

Whatever Works runs every Monday. Send e-mail to [email protected].