Suze Orman's 7 Most Sensible Investing Tips (Anyone Can Use These)

If you want to build wealth, curating an investment portfolio designed to grow is critical. But many of us don’t know exactly where to get started. The good news is that personal finance experts like Suze Orman offer straightforward advice to help you move the needle.

From the ideal amount you should be saving for retirement to portfolio adjustments, we explore Orman’s top investing tips below.

As you save for retirement, Orman recommends saving at least 15% of your income. If you are starting in your 20s, this should be enough.

Orman says, “The 15% savings rate is based on a lot of smart people doing a lot of mind-numbing number-crunching that factors in how investments grow over time, how much of our work-years income we need to live comfortably in retirement, and how much other income sources, such as Social Security will provide.”

While there are countless types of assets to invest in, Orman recommends focusing your efforts on investing in a diverse group of stocks. 

Avoid investing heavily in assets tied to high levels of risk. For example, you might want to avoid making cryptocurrency the bulk of your investment portfolio.

In addition to stocks, Orman recommends adding bonds to your portfolio to create more balance.

Orman recently wrote, “High-quality bonds are a good option for money you want to move out of stocks. I recommend you consider owning bonds with a maturity in the range of 3–7 years or so.”

Although you likely have short-term spending goals, build an investment portfolio with a long-term outlook. It’s possible to build tremendous wealth over time.

“While stocks lost ground in 2018, let’s not lose sight of the fact that they have been going up for 10 consecutive years. That is a long time that has produced some big gains,” Orman wrote in a blog post in 2019. 

“Even after a rough 2018, U.S. stocks still have a 10-year annualized gain of 13%. That’s well above the long-term average of 10%. If you are investing for the long-term, it’s how your money grows over time that matters most.”

As almost any seasoned investor will tell you, stock prices rise and fall. Although some dips are expected along the way, sticking to your long-term investment plan could make all the difference to your returns.

“You know I am a big believer in stocks for the long term. They have historically delivered the best inflation-beating gains,” Orman wrote in a recent blog post. “But that means signing on for periods when stocks lose value as well.”

It’s often easier to stick with your long-term investment goals if you have a solid base of emergency savings to lean on in tough times.

“An emergency savings fund is how your family can weather a layoff, or reduced hours, if we do head into an economic slowdown,” Orman says. “There is no more important investment right now than building up your emergency savings.”

As you save for retirement, your goals and risk tolerance might change — and that’s OK. Adjusting your portfolio every couple of years or so is a good idea.

Ormans says one common change is that many people will reduce their reliance on stocks as they get closer to retirement. “This is an entirely personal decision based on your needs,” she notes. 

“But just because you had 80% or more invested in stocks when you were 40, doesn’t mean you need or must keep that much invested in stocks when you are 65 or 75.”

Orman is one of the top personal finance experts today. She offers sound investment advice that millions have listened to.

As you build your net worth and start investing, sticking with Orman’s investment tips should keep you on the right track. But don’t be afraid to incorporate investing and personal finance tips from other personal finance experts on your path to wealth.