Why 'money lady' Suze Orman wants you to stop buying lattes
MANILA, Philippines - Buying a Starbucks latte? Personal finance guru Suze Orman wants you to stop and put your money away.
In an interview with ANC's Karen Davila, Orman said people don't realize just how much money they're spending for a cup of coffee every day - money they could be investing, instead.
Known as the "money lady," Orman's eyes went wide as Davila said she buys a cup of coffee, which costs around P120 to P150, every day.
"You're spending that kind of money on a cup of coffee? Are you kidding me," she said.
As the host of CNBC's The Suze Orman Show, she is known for having coined the term "latte expenses," which refers to small daily expenses that people make without realizing how they can add up in the long run.
"Look at it this way, even if you did that once a month, spent P100 a month on a cup of coffee and you did that for the next 40 years... If you had taken that money and invested it, you would have P1 million at just P100 a month," she said.
Instead of buying an expensive cup of coffee, Orman said she makes her own coffee at home.
"Think about it, you drink a cup of coffee, you go to the bathroom. That's what happening to your money," she added.
Why Filipinos don't save
Many Filipinos don't save money, with only 2 out of 10 households having a savings account.
Asked about the Filipinos' low savings rate, Orman said it's not that Filipinos don't want to save, but they just don't know how.
"They think the goal of life is to buy this and buy that and that's how they define themselves. Things will never define who you are. You define the things around you," she said.
One of the reasons she's visiting the Philippines is to help Filipinos learn how to manage their money.
"This is a country that is starting to grow. The economy is growing, the stock market is booming. So the whole country is doing great but its people are not doing great yet," Orman said.
"So before they get into credit card debt, before they get into trouble with all the companies that are going to come here and say, give me your money and buy a Starbucks, do this and do that. Hopefully they will listen to me - you're never powerful in life until you're powerful with your money, how you think about it, how you feel about it."
The Philippine connection
Orman, who is in the country for a second time, is set to deliver a series of talks on personal finance for Bank of the Philippine Islands (BPI) this week.
Orman admitted her good friend, businesswoman-philanthropist Doris Magsaysay-Ho has been inviting her to visit the Philippines for years.
"I love the people (here)... I'm good friends with Doris Ho. She loves this country more than anything in thise world. For 10 years, Doris Ho has told me, please come to the Philippines, my country needs you... I told her, 'if it means that much to you, Doris, we'll come'," she said.
Asked how much she is getting paid for her visit, Orman said she does not "put one cent in my pocket."
"I believe in my heart, how do you tell people who don't have money, if you yourself are making money from it. You can't. I wanted to come here without any strings attached, without making money," she said.
For Karen Davila's full interview with Orman, click here.