Last month Time magazine included Suze Orman on its list of the 100 most influential people in the world for the second year in a row. Oprah Winfrey's been a fan of the Emmy Award-winning financial guru for years, but with the economy in a meltdown, Orman is hotter than ever. Now you can meet her in person this August in Chicago at SalonLife, sponsored by the National Cosmetology Association.
I asked Orman what she plans to talk about at SalonLife. "I've never planned a talk," she says. "It's more exciting when it happens on the spot. I'll be looking at you, feeling you, asking you what you want to talk about. It will have a life force all its own, it will have a flow, and it will live in your heart forever, but it will be about what the majority of people out there want to know about their money at a time when money is more important than ever."
Since ours is an industry in which company-sponsored 401ks are the exception rather than the rule, I asked her how hairdressers should plan for retirement. "You could open a Roth IRA or a nondeductible or traditional IRA," she says. "There are all types of retirement accounts out there that allow you to contribute $5,000 or $6,000 a year depending on your age. Look into a good discount brokerage firm. My favorite is TD Ameritrade. You can set up an account and invest in it from then on."
Meet financial guru Suze Orman at SalonLife in August.
Orman also suggests that hairdressers think about putting their tips into an emergency fund or retirement account. "Your living expenses should be based on your income, not your tips," she says. Just for fun, I asked her how much you could be looking at some day if you began socking away just $5 a day or $150 a month right now. Orman pointed out that the stock market usually averages about a 10 percent return on investment, but based on a modest 8 percent return, she estimated that you'd have about $27,500 in 10 years. "Leave your money in for 20 years and watch how things compound," she says. For the record, you'd have about $88,000. Leave your money in the market for 30 years and you're talking $223,000. Don't touch your money for 40 years and you'll have close to half a million dollars. Mind-boggling, isn't it?
Let's face it, hairdressers—and most right-brained writers like myself—probably had trouble with math in school, which is why it's so important for us to get this stuff sooner rather than later. And while it's crucial for men to understand the importance of financial planning, it's even more important for women, who, Orman points out, tend to do more for others than they do for themselves. "They do not learn until they're 45, 50 or 55 that they're in serious danger because they've taken care of others and are left with no money," she says.
Orman had some good news for hairdressers who are worried about job security. "It almost takes longer for people to recover from a bad haircut than it does from losing money in the stock market," says Orman, who's convinced that there's nothing like a great haircut to make a woman feel more powerful, more attractive and more competent. "When she has that power, that strut about her, she lands the job she wants or the man of her dreams. You can't outsource a haircut. If you can make women look good, you've got it made in the shade." —Marianne Dougherty, editor in chief, [email protected]
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