Where does Suze Orman, the high profile “financial freedom” counselor, invest her own money?
According to a recent newspaper article, Ms. Orman finds financial success and peace of mind in municipal bonds.
Ms. Orman has amassed a personal fortune estimated at $25 million from the sale of books, investment kits and other products that she promotes on television and on the Web, according to The New York Times.
Naturally, what caught our eye was that until six years ago, her money was almost exclusively in equities, but by 2000, she had sold off the majority of her stock holdings and invested the proceeds in tax-free bonds.
Today she says 75% of her net worth is invested in zero coupon municipal bonds. Zero coupon bonds make the most sense to Ms. Orman since her enterprises provide annual income of $3 million to $5 million, which eliminates the need to produce investment income. She is comfortable being “heavily invested” in the bond market, and although she is a former stockbroker, she says the stock market is a “major stress” producer.
By investing in bonds, Ms. Orman feels she is avoiding major financial risks.
Obviously, we agree.