"The American Dream is dead." That's the provocative headline that topped some news stories announcing Suze Orman's book tour for her latest release, "The Money Class." The headline belied a core message of the book, as reflected in its subtitle: "Learn to Create Your New American Dream."
Read "The Money Class" and you'll see -- Orman's message is less that the American Dream is dead, but that it's molting. If it's dead or dying, it's doing so in order that a new dream can be born, Orman argues.
Orman sets the book up by quoting stats and trends to make her case that the dream is dead. And that's not hard to do -- rampant unemployment, foreclosure and bankruptcy rates at the end of last year, when the book was written, were all at all-time or lifetime record highs.
The book presents a laundry list of ways in which the American Dream of homeownership, job opportunities and upward financial mobility has turned into an unattainable fantasy, or even a nightmare, for many Americans. Orman then proposes to teach readers nine courses on individual financial subjects, which she says will help them build a more conservative, sustainable and personalized dream for their own lives.
Orman's been doing the financial guru drill for a long time, now, and her understanding of Americans' financial pain points -- derived, at least in part, from her live Q-and-A call-in show -- is clear in the subject matter covered in this book. So is Orman's trademark financially conservative, point-blank, "what-are-you-thinking?" approach to money matters.
Her facility with simple, memorable, concrete money rules-cum-catchphrases is also apparent throughout the book. Adages like "the pleasure of saving is equal to the pleasure of spending" and "live below your means, but within your needs" irritate some financial sophisticates as oversimplifications that are tailored more for TV sound bite-dom than for depth. But many, everyday people who seek to have a simple, stable financial system will find that Orman's advice resonates with their frustration and offers some hope for getting back in control of their finances.
Given that few people make dramatic financial change, I suspect that even Orman's most conservative advice -- such as don't buy a home without 20 percent down, or don't spend more than 25 percent of your take-home pay on your housing expenses -- will rarely be followed to the letter. What's more likely is that her advice will temper the financial impulsivity and overextending that got so many in trouble in the recent past.
For example, Orman says the most you should accept as a down-payment gift (gift!) is 5 percent of the cost of the home, or a quarter of the minimum total down payment Orman says buyers should put down. While I doubt you'll see many people refusing down-payment gifts on Orman's advice, you might see some reconsider how that gift is impacting the financial situation of their relative who's giving the gift -- another Orman recommendation.
"The Money Class" offers Orman's signature, black-and-white money advice on family, home, career and retirement planning. Retirement planning is covered in segments tailored to those in their 20s and 30s, 40s and 50s, and those actually living in retirement.
Orman oscillates back and forth between sound bites ("if it doesn't feel right, it isn't right") to providing fairly detailed advice on each of these topics and a long list of subtopics.
In the section on home, for example, Orman quips, "A home is a savings account, not a hot stock," and also makes very clear mandates for what is smart buying and ownership in her world.
Underwater? Suze says if you can't afford to pay the mortgage, the responsible thing to do is sell the place and use your savings to pay the difference. Unless you're 50 percent or more underwater, in which case she says walking away is OK. That seems a little arbitrary to me -- I'm not sure how Orman arrives at 50 percent negative equity as the threshold that turns walking away from an irresponsible to an acceptable act.
Orman's rules and dictates lack some of the aspirational aggressiveness to move on up that some still hold to be part of their own American dreams. I personally know many single women, ethnic minorities, suburbanites and city-dwellers who would never have owned a home if they waited until they had saved up 20 percent, and are much more prosperous for having been able to become homeowners (myself included!).
However, many recession-weary Americans, looking to fatten up their finances for the next economic winter, will find Orman's advice meets them right where they are.
I was pleasantly surprised to see Orman offer personal finance advice to entrepreneurs, as an increasing number of Americans find themselves being "inspired" by unemployment to take on freelance gigs and otherwise start their own businesses.
Suze Orman often provokes love or intense dislike among those within reach of her voice. If she always gives you hives, don't read this book -- it is Orman giving her signature firm, conservative rules, with few exceptions allowed. But if you are seeking what Orman calls a "long-term rehabilitation plan" for your finances, want some very clear and simple rules by which to live your financial life, and you usually like what Orman has to say, you'll probably be very pleased with "The Money Class."
Readers should make sure to check in with their own financial advisers for more personalized advice, though, especially in the realm of mortgage, tax and retirement planning.