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PIERS MORGAN TONIGHT

Interview with Suze Orman

Aired February 1, 2012 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)

PIERS MORGAN, CNN HOST (voice-over): Tonight, a number one issue in America --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The truth is, it's going to take more time than any of us would like for the housing market to recover from this crisis.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We have programs to help the poor. But the middle income Americans, they are the folks who are really struggling right now and they need someone to help get the economy going for them.

MORGAN: No one knows the economy and your money like Suze Orman. Tonight, the tough questions.

SUZE ORMAN, PERSONAL FINANCE EXPERT: By the way, why are you in so much debt?

MORGAN: The bottom line.

ORMAN: I looked at every penny that you spent and every penny that has invested. So, be careful of what you say here, sir.

MORGAN: I'm the one that times fear.

ORMAN: Denied, denied. You are denied.

MORGAN: Suze Orman, live, with answers for you. And our studio audience.

UNIDENTIFIED MALE: Suze, help me decide where to go to college.

UNIDENTIFIED MALE: How much should we invest in savings every week?

UNIDENTIFIED FEMALE: Should we buy a house in this economy?

UNIDENTIFIED FEMALE: I can't wait to hear your advice.

MORGAN: Plus, I mean Americans, base on don't ruin the wall street. A $5 billion success story.

This is PIERS MORGAN TONIGHT. (END VIDEOTAPE)

(APPLAUSE)

MORGAN: Good evening. This is a special live edition of PIERS MORGAN TONIGHT.

I want to welcome our studio audience and my special guest, Suze Orman. We will be taking your questions on twitter. She is in #suzeoncnn and then on facebook page, it's facebook.com/pierstonight.

Who better, frankly, than the Suze Orman to talk dollars and common sense on America's economy. From what we've taste, turn around. Well today, President Obama had his say.

(BEGIN VIDEO CLIP)

OBAMA: Banks and lenders must be held accountable for ending the practices that helped cause this crisis in the first place. And all of us have to take responsibility for our own actions or lack of action.

(END VIDEO CLIP)

MORGAN: Both today of controversial comments from Republican front-runner Mitt Romney on CNN saying he's not concerned with the poor, the focus instead on middle class Americans.

(BEGIN VIDEO CLIP)

ROMNEY: I'm in this race because I care about Americans. I'm not concerned about the very poor, we have a safety net there. If it needs repair, we'll fix it.

(END VIDEO CLIP)

MORGAN: Now, what I'm getting, Suze Orman is almost taken on this. She is of course the number personal finance guru, author of her book, "Is the Money Class?'' and she joins me now. Welcome, Suze.

ORMAN: Thank you, Piers.

MORGAN: Let's start with Mitt Romney because that was extra ordinary comment for somebody who wants to be president of the United States right now to make I thought. You know, I'm not concerned about the poor. Whatever came afterwards, whatever context he was trying to put it in, it sounded bad, didn't it?

ORMAN: It sounded bad and it all sounded I hate to say very naive. Because for so long, have I not been saying the rich are getting richer and poor getting poorer and middle class are disappearing. So, he says he's concerned about the middle class. What middle class are we talking about?

You know, as we sit here, there are about 50 million people in poverty. What does that mean? It means a family of four making $22,000 a year or less. There's almost 150 million people that are in poverty, near poverty, or that close to it. So, almost one out of two, one out of three people in the United States of America are edging in poverty. And he's saying he doesn't -- he's not concern? He should have fought it, Piers. But, he never should have said it if he thought it. But, it's a ridiculous thought.

MORGAN: Doesn't it sum up Mitt Romney's problem, which is the sense people have about him that he has disconnect from ordinary Americans? And we see it. Remember he said the $10,000 bet. You know, we see it about the vast sums of money that he declares on taxes and so on. All of it adds up to a picture of a very wealthy guy slightly out of touch with real Americans, many of whom, tens of hundreds of millions, like he says, are really suffering right now.

ORMAN: I don't understand the safety net he says is there. If it's broken, he'll fix it. Like he said, easy. For him to get the economy back online, the first programs he's going to change are what are the programs that affect the poor? So, very, very silly thing for that man to have said.

MORGAN: For President Obama today, you know laying out, again, criticism of the system that got America into this mess, pretty strongly, quite interestingly in Britain. Two things happened to the banking community in the last week we learned.

One big banker was denied a million pound bonus, so, $1.5 million at least. It was removed by public pressure of anger. Secondly, another famous banker was knighted by the queen. So, this is the banking. They stripped him of his knighthood, almost unprecedented thing, normally reserved for spies. So, what you are seeing is a real serious of big blow to bankers in Britain. Would you like to see that in America? Do you think they have gotten away with it in many ways?

ORMAN: I think many bankers have got away with it, but I think many of the executives on wall street have got away with it as well which is why the CFP, the consumer financial protection bureau that President Obama put into place. You know, he went over someone's head and did this. Because they didn't want to provide funding. It is so important that they are in power now because the banks have to report to them.

The banks have to be held responsible. People in high economic positions need to be held responsible. And one of the best ways to do it at this point in time in the United States is with the CFPB.

MORGAN: At the moment, lots of people are cueing up to say, I suspect for political reason, things are improving. You know, the jobless figures are getting slowly better. Although Friday, we await new figures. Some people predict to my mode and do back up again.

But, let's say the economy, there are green chute is slowly improving. Do you agree with that? Do you think America is now coming out of the recession?

ORMAN: No. I think people constantly get the economy and stock market confused. When the stock market is going up and everything, people tend to feel more hopeful because they see their 401(k) statements go up, their I.R.A. statements go up.

But, is the economy itself, getting better? I don't see it, Piers. I don't see jobs coming back. I see millions of people out of jobs. That those jobs won't come back because of the computer, productivity. They don't need them anymore. Half of this world is functioning as great without these workers as they were when they had these workers. So, why get them back?

MORGAN: I mean, to me, it's very worrying. I think when you are kind of, you know, iconic airline, American airlines is former bankruptcy cutting 13,000 jobs today then as extra. This is serious stuff, isn't it?

ORMAN: It's serious but it's been serious. So, I think people get to feel hopeful when they are watching TV and they are seeing good earnings and they are seeing these things. But, real estate is not coming back. Jobs aren't coming back. People don't have more money to do things with. So, I think they are going to get a little bit sadder again, as this year goes on.

MORGAN: What is the answer to the broken problem of the moment of America incorporated? The country as a business?

ORMAN: Well, the country as a business isn't running like a good business. If you were going to give them a grade, you have to give them an F truthfully. You know, these people will tell you because they are my fans that constantly when you say it, we saw it, denied. When you can't afford it, you don't buy it. And if you spent so much more money than you were taking in, you would be financially bankrupt.

MORGAN: Very hard for the average American to understand this message of spend within your means. When you have a country's debt of approaching $14 trillion. That's the wrong message, isn't it? That says borrow whatever you like, it doesn't matter.

ORMAN: Well, it says that they don't have a solution to the problem except to borrow. It's not like they want to borrow. It's not like they want to keep getting into debt. But, they don't know how to fix a system that is seriously broken. The Medicare system is broken. Social security is broken. So many things are broken and they don't know how to fix it.

MORGAN: Do you think, as many do, that America needs to go back to building things rather than consuming?

ORMAN: I think they do need to go back to building things. However, do I think it's a reality? Roads, cars, maybe. But not to this degree when we have this industrial revolution here and everything was happening here.

I think the answer is people are going to have to become entrepreneurial. They have to go - they are going to have to become their own bosses. The day of working for a corporation, you get a pension after 30 years and health benefits, gone. So, if you really want to be secure, you are going to have to be your own boss.

MORGAN: It's fine for you because you are a very bright cookie. You started as a waitress in a restaurant and built this incredible empire. But most average Americans aren't natural entrepreneurs.

And I don't think I can agree with that. I think that America does needs to build things. For example, I'm told there's a huge demand in China for big, heavy machinery and they would buy it from the Americans if the Americans were producing it in the volume that they need it. But they are not. The old style industrialization in America isn't happening anymore.

ORMAN: And I think it's a nice idea. I just don't think that's what's going to happen. I think we're -- we have entered a new period with new technology and things that have never been developed before. That, I think we can do here.

But I still think we have a big problem with how do you get the people back now to work? We can't wait until all that happens. They need to go back to work now to work. And since the jobs aren't here, they have to create a job for themselves.

MORGAN: Donald Trump says one of the problems is that look at China which is swallowing up American debt almost on a daily basis and in the other countries around the world. And China is oversea mass producing, very cheap labor. Al lot of stuffs the world is consuming.

Is it time to have a formal trade war with China? Is it time America got more insular and took over -- the example, the classic one is Apple. The most successful company in the world right now. But Apple employs more people in China than it does in America. That, to me, is wrong.

ORMAN: That may be wrong, but it is the way.

MORGAN: Why is it the way?

ORMAN: It's the way because it got so expensive to hire a laborer here with the insurance, with everything, we couldn't afford it. Because things are have going and getting more and more expensive. Then you have Wal-Mart comes in.

MORGAN: Doesn't America have to work at a way of affording it? Shouldn't companies like Apple, who I think are a brilliant company and I used many of their products. But I fundamentally disagree with an American company having more people employed in China than they do in their own country. They should be looking after their own country, shouldn't they?

ORMAN: But, in their way, they are. I'm just going to say this. If they had to hire people here to produce the ipads and ipods, whatever they are, we would have to probably charge four or five times the amount of money that they are being charge to it now. And people won't buy it. MORGAN: Or Suze, let's address the unthinkable. Or Apple reduces its massive profits slightly in the national interest.

ORMAN: Possibly but that isn't the American way. It's not unthinkable, I just don't think they are going to do it.

(LAUGHTER)

MORGAN: Let's take a break. Let's come back and get some questions from miss already fired up. I can feel it. I can sense it among such --

(APPLAUSE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ORMAN: Wherever you are, I want you to listen to me. Student loan debt is actually the most dangerous debt that any of us can have. Because in most cases, it is not dischargeable in bankruptcy.

(END VIDEO CLIP)

MORGAN: That's Suze Orman show, "America's Money Class" on Oprah Winfrey's own network. Welcome, Suze. There's someone in the audience who has a very specific question on this very issue. And that is Shelly . Off to you, Shelly.

SHELLY DRORI, AUDIENCE MEMBER: Thanks so much for taking my question, Piers. Hi, Suze. Thank you for taking my question and thank you for everything you do for us.

Our son, Johnny, is heading to college this September, has had a number of scholarship offers from some high tier colleges and has a 100 percent scholarship offer from a lower tier college. My question is, should he take that 100 scholarship percent offer and give up the other higher tier colleges in order to avoid any type of loan?

MORGAN: That is a brilliant question, isn't it? Because that tops to the absolute heart of America's educational problem. Which is -- there's a very bright student being offered a great scholarship in a number of places. But to be in the top tier, to really realize his potential is going to cost money that perhaps the family can't afford, pricing him out of the best education that he should be able to get in which other countries led by China, India and others are now beginning to offering their students.

ORMAN: Welcome to America, Piers. Welcome to America. So Johnny, here is what I would have to ask you. When you graduate college, if you had 20, 30, $40,000 as student loan debt, how would that make you feel?

JOHNNY DRORI, STUDENT: It would make me feel awful. I don't know how I would pay it back. I don't know what kind of job I would need to pay it back as soon as possible. ORMAN: Then that is the answer to the question. You never do something with money that after you have done it makes you feel horrible, makes you feel afraid. You want to graduate and you want to feel free. If you walk into a job and you have $40,000 of student loan debt on your shoulders, you start to feel the burden of debt. and then you go, l I have to get a job, I have to get a job.

MORGAN: Suze, what do you do then?

ORMAN: He should go to the college that gives him 100 percent scholarship. Because I refuse to believe that what gets you a great job, what makes you a great career is the school that you went to. The school does not make you people. You make the school. You make yourself. You make your career, boyfriend, stay out of debt and take the 100 percent scholarship.

(APPLAUSE)

MORGAN: See, here is where we are going to start to fall out. Because I don't agree with it. You see, I don't think you should be in this position. By the way, we have exactly the same crisis in the British education system. So, I have exactly the same scathing criticism of what happens there. Bright students should not be priced out of this kind of educational opportunity. It shouldn't be happening. The government of this country should be looking at this specific kind of case and fixing it so these students are not laden with debt.

ORMAN: Piers, the problem goes so much deeper. It's not just college. What is it that kids now today have to go to a private school for grammar school, first grade, second grade. You have so many people in the United States of America spending $30,000 a year to send their kids to high school. It's wrong.

I think no private school should be out there. I think everything should be public. I think everything should be that way. But, we don't honor our teachers. We don't pay them enough. They are the first people that we cut. And so, what do people do? They start spending money to go to private schools. It's ludicrous. It's not the American way.

MORGAN: Suze, the problem is not specific comparison, people will get a better education at a private school right now than they would from a non-thief main school in America, wouldn't it?

ORMAN: They would. But, you are looking at somebody who grew up on the south side of Chicago, 81st, went to horseman grammar school, (inaudible) high school, every single class would smashed out. You had to be frisked before you went in. The education was not good. And look at me today. So, anything you want you can get. I don't believe your education makes you.

MORGAN: You have an amazing story. And it's incredibly inspiring. And if I just sold the jewelry on your body right now, I could retire.

ORMAN: I don't think so. $200 for a watch. $75 for this ring, maybe $1,000 total here. OK? Got it people?

MORGAN: That's a good answer. Is that true?

ORMAN: Yes. I don't know, this is what, Michael Cores. I don't know. This is like -- yes.

MORGAN: This trinket.

ORMAN: Feel it.

MORGAN: Blind me. She has a good answer.

ORMAN: So, that's the trick. You wear things. And because you wear it, everybody thinks it's expensive when it doesn't have to be. I make my jewelry, my jewelry doesn't make me.

MORGAN: I like this lady. (Inaudible).

(APPLAUSE)

MORGAN: Let's go to our second question. This is from Bill Loftus. Bill, over to you.

BILL LOFTUS, AUDIENCE MEMBER: Hi, Suze. Thanks for taking my question. I wonder what kind of advice you would give 20 to 30-year- olds today making the decision between buying a home or renting. You think given the depressed housing prices, the large inventory of homes available and the unprecedented low interest rates now would be buy, buy, buy. But a lot of young people in their 20s and early 30s are real nervous about that kind of commitment. What kind of advice would you give them?

ORMAN: They are nervous about that kind of commitment because they don't have 20 percent down. They don't have the security of knowing if they get a job, they get to keep their job. And they don't have the security of knowing that a house will appreciate in value. So, if they need to sell it, they will be able to at least get back their closing costs, their moving costs and everything like that.

There's good reason for them to be nervous. There's also good reason that they can just wait until they are not nervous anymore. Because it's a fallacy to think the interest rates are going higher. They're not going anywhere. Fallacy to think that real state is not going to skyrocket. It's not going anywhere for a long time.

MORGAN: There's a breakdown in trust. When I grew up, I was sure the same for you, bricks and mortar was the great mantra of investment.

ORMAN: Yes.

MORGAN: You've never go wrong if you invest in bricks and mortar. Now, you can go badly wrong. Look at Florida where this primary just happened which has the worst record for closures in the whole of America. And these people are desperate that they all invested in this old American dream, save enough money, you deposit down, you buy a house. A, you have a lovely home, b, you will make money when you resell it. That's gone, isn't it?

ORMAN: That's gone for now. However, if they did have 20 percent to put down, if you could get a steal of a deal and you understood money and you had enough of a cushion, they would probably do it. But when you see these kids not wanting to do it, it's because they are not secure in their jobs, they don't have enough money to make a go.

So, if you don't have enough, you rent until you do. It's the way. There's nothing wrong with renting for the rest of your life. Nothing wrong with it if that makes you feel secure.

MORGAN: That is not the American dream.

ORMAN: It is now. It most certainly is now.

MORGAN: Yes. But, Suze, the American dream has been tarnished in recent years. But, isn't it important to work from philosophy rather than America is broken that America remains a great country. It just has to be brought back up, again. Isn't that a better way of looking at this?

ORMAN: No. America is a great country. But, its people are broken. And it's people right now are broken because they can't feed themselves, they can't get a job, they can't take care of their kids, they can't keep their cars. They can't do anything. So, our spirits are broken.

MORGAN: The problem, is a lot of people -- when I grew up for example, you could buy a house with a five percent deposit. You are talking 20 percent. I bought a house recently in America. And had to put down 35 percent deposit.

The banks are no longer lending the money they used to. The same bankers, not all of them, but the same wall street institutions and bankers that you could argue brought this country to their financial needs. Now, awarding themselves the same old bonuses but not lending the money to people desperate for their homes. That has change, isn't it?

ORMAN: Yes. But these people could, if they wanted to, buy a home with 3.5 percent just by going to FHA. But, if they have been listening to Suze Orman, they know, don't you dare buy a home unless you put at least 20 percent down. Because you don't want to find yourself in a negative equity position starting in the year 2013 because the tax laws that are currently in effect that says you bought a home for $200,000 it's now worth $100,000. Now, you do a short sell, you do not have to owe income taxes as on a primary residency between the $100,000 and $200,000. Starting in 2013, you will.

MORGAN: Let's take a break after that, long show which isn't going to show. Let's take a break. Let's come back and talk more about how we keep America great. Advice to this as we get more questions and you can send tweets to @piersmorgan or @pierstonight and also our facebook. This is going well. I like this, don't you?

(APPLAUSE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ORMAN: So, you are really, really, really going to love me when I give you this answer.

UNIDENTIFIED FEMALE CALLER: OK.

ORMAN: Are you ready for it?

UNIDENTIFIED FEMALE CALLER: Yes.

ORMAN: You have been bucked of the horse, you are denied. Leave it where it is. Trust me.

(END VIDEO CLIP)

MORGAN: That's from the "Suze Orman Show" on CNBC, the world's every Suze fan fears. Her latest book is the "Money Class." And Suze is with me now.

We read lots of tweets pouring in here. Some agreeing with you, some are not agreeing. It's not the people who are broken, Suze. The people are why this is still a great country. We will rebound.

Now, I agree with that. You see, I don't think the people are broken. The people are angry. They are frustrated. They are hurting. But they are not broken.

ORMAN: Their spirit is broken.

MORGAN: You think so?

ORMAN: Audience, are your spirits broken? Some yes, some no.

MORGAN: They are broken. I think you are angry. I think you are frustrated and you want better government and you want the economy sorted out. I don't think you are broken.

And Americans need to find themselves out. I think, like Suze does every day. And come back and keep this country getting better every day rather than being negative.

ORMAN: Let me tell you whose spirits are broken. Some of the 50 million people out there. None of you are any of those people or you would not be sitting here. But the people who lost their homes, their cars, they have lost everything. And two weeks after they get their disability check or they get a Social Security check, or they get whatever. They have to stand in food lines in order to feed their kids.

When you have that happening in your life, your spirit is broken. It's not that you are a bad person. I mean, America is a great country and it's made up of the best people in the world. But unless Congress can get their act together to help these people just throw them a bone --

MORGAN: The congress -- it seems to me, Suze, I have been one year in this country and all I have seen is Congress squabbling like school children and getting nothing done. If I was American, I would be seeding about this. I'd be marching around parks of Washington.

And say, what the hell are you clowns playing at? Get stuff done.

Let's go to Nkiruka. You have a question.

NKIRUKA OKEKE, AUDIENCE MEMBER: Thanks Piers. Hi Suze.

ORMAN: Hi.

OKEKE: Basically, I have -- I have to choose between helping my family with my sibling's wedding, paying off credit card debt and putting more money into my Roth IRA and 401(k). And I wanted to see how I should prioritize these different things?

ORMAN: Did you just say helping your siblings with a wedding is more of a priority for you over getting out of credit card debt or saving money for your own retirement?

OKEKE: It's not more of a priority, but --

ORMAN: You threw it in the mix.

OKEKE: Yes, it's something I really want to do. I really want to be able to help them out.

ORMAN: No. I get that you want to do that. But you have credit card debt. If you have credit card debt, you have bondage, and you will never have financial freedom if you're in bondage. How much credit card debt do you have?

OKEKE: Do I have to say?

ORMAN: Yes, ma'am.

UNIDENTIFIED FEMALE: About 9,000.

ORMAN: At what interest rate?

OKEKE: If I average everything out, it's probably around like 15 percent.

ORMAN: Fifteen percent on 9,000 dollars. Well, if you have any money at the bank -- here is what's nuts. If she had any money in the bank, they would be paying half a percent. Treasury now is even thinking about you paying them to be able to buy a Treasury. That's another story, however.

Kiki, you want to help others, you have to help yourself first. Your priorities are to pay down your credit card debt. Then fund your Roth IRAs. And then, if they are still going to get married, you can help them.

But you are not in the position. You do not have the money to help others. I know that's hard for you, because you want them to see you in a certain light.

MORGAN: It's a very good point, because I was staggered on what -- Black Friday they called it, before Christmas, when America, 14 trillion dollars in debt, unemployment raging, loads of people with no money -- suddenly, it was like the flood gates opened. Millions and millions of Americans storming into these shopping centers to spend money that I just guess -- I have no evidence. I guess many of them just don't have that money.

What were they doing?

ORMAN: Shopping.

MORGAN: I know. I know. But where is the common sense? Where is the personal responsibility? Because although I blame bankers, although I blame Wall Street, although I blame governments for what has happened to the American economy and the global economy in every country, not just here, I also blame members of the public for not taking their own responsibilities.

That includes me and everybody in the room. It's like you have to be personally responsible, haven't you?

ORMAN: There's a saying that I have, when you feel less than, you spend more than. So when you feel like there's no answer, it doesn't matter anyway, I'm just going to go shopping and buy something. Now look at everybody shaking their head at that.

You just told me that you didn't feel broken a few seconds ago. When your spirit is broken and nobody is validating you and nobody is willing to help you, you throw it in and you go, let's go shopping.

MORGAN: Tell me about your prepaid card you bought out, because you have taken a lot of flak for this. They're like Suze is take here. She is raking up your fees, all this kind of thing. What is the truth?

ORMAN: Do you think, at this point in my career, that I would get on television and I would say that this card, if you use it like I tell you to, will not cost you more than three dollars a month if that wasn't true? Why would I do that?

Suze Orman is the person who wrote a book, Piers, "The 2009 Action Plan" -- I wrote it to be given away on "The Oprah Winfrey Show," not to sell it. We gave away 2.2 million copies. I give away my will and trust kit. I give away my "Money Navigator Newsletter." I give away my identify theft.

I'll give it away tonight to all of America, if you want. So why would I, at this point in my career, having given away tens of millions of dollars worth of tools -- MORGAN: Is the problem with it, like with all these things, if you don't study all the wording of this card, you could end up paying --

ORMAN: No. Because we even have what's called a fee alert text. So if you are paying fees that you shouldn't pay, because you're doing something ridiculous, we send you a text. But here is the truth -- you know how Romney was out of touch with the poor people? The people who are judging prepaid cards today are out of touch with the poor people.

There are 50 million people out there that can't get a bank account. They can't get an account at a credit union. They have bounced checks. They can't get a bank account.

So can you tell me, what are these people to do? You can't tell them to go and pay in cash. Everything is online today. They have to pay their bills. Prepaid cards were given a very, very bad rep years ago. Guess what, they deserved it.

Just because they are bad doesn't mean that every one that comes out is going to be bad. My -- I love my card. I stand by my card. I guarantee you, one year from now, these reporters that have gone absolutely looney --

MORGAN: They have. Given all the attacks that have come on you, is there anything you will change about the card?

ORMAN: Yes, there will be one thing I change about the card. I said this, that when we can, the three dollar a month fee will go away. But for three dollars a month, now you get unlimited credit scores, reports. You get free identity theft protection. You get everything for free.

Here is what people should do, they should make up their own mind. They should go to TheApprovedCard.com. Click on fees. Look at everything that this card comes with. If you don't like it, you don't have to get it. If you are happy at your bank or your credit union, stay there.

But for those people like me who have an elderly mother -- my mother is 96, Piers. She has a different aid almost every day there. I can't leave cash around. I can't leave a credit card around. I got the card. I gave my mother one. Doesn't cost anymore. You get up to four cards for three dollars. Think we can afford 75 cents?

I can load it. And every time one of my mother's aids buys something for her, I get a text immediately.

MORGAN: If it's good enough for your mother, that sounds pretty good, Suze.

Let's have a little break. Let's come back and talk about what I think is one of the key issues: how do people save money in difficult times? What are the best ways?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ORMAN: If you are going to have a child, you really have to be able to afford to have a child. Children are very, very expensive. One child over the first 20 or some odd years will cost you maybe 200,000 dollars. It's a lot of money, especially if you are going to send them to college.

(END VIDEO CLIP)

MORGAN: Words of wisdom there from "America's Money Class" on the OWN Network. I just realized that my four children are going to cost me nearly a million dollars.

ORMAN: What were you thinking?

MORGAN: Well, I was trying, deny, deny, deny. Isn't that the key phrase? Let's cut to a question that many people are asking, top of the board there. Should we all be running to buy Facebook stock?

This is -- I mean, Facebook, to me, is a brilliant American success story. A young geeky guy has a great idea. The next thing we know, it's worth 80 billion dollars. He's going to create God knows how many millionaires, make himself incredibly rich. He employs a lot of people in America.

We should be saluting him, shouldn't we?

ORMAN: I think we should be saluting him. I'm happy for him and everything he's created. I'm happy for people when they have success. Who wants to rip people down and make it so they don't succeed? We need to propel each other up and hold each other up.

But should you buy the stock or not? I don't have a clue. I do know what will happen is that none of us will be able to get in on it on the first offering. It will come out. America will go crazy. It will bid it all the way up.

Then we have to see what happens. I have a feeling, once it has gone all the way up, people will want to take profits. It will come back down. Then you will make the decision if you should buy it or not.

So it's going to be -- it's a strange one. When Google first came out, look at it now. When Apple first came out, look at it now. I have a feeling, in long run, Facebook will probably be one of those companies.

MORGAN: Let's take another audience question, this time from Natalie Gonzales (ph). Natalie?

UNIDENTIFIED FEMALE: Hi Piers. Hi Suze. My question is my husband and I make about 200,000 dollars a year. We live here in New York City. We don't own any property. We don't have any kids. And we really struggle to save money. What is our problem? ORMAN: You live in New York City.

MORGAN: They are earning good money, I would think, compared to most Americans. What do they do to -- I mean, the fact that they can't save money on that kind of income --

ORMAN: Here is something important. This is the people that President Obama was talking about, raising taxes on everybody originally above 250,000 dollars. I have been arguing against this. You want to raise taxes, make it a million, two million dollars of income. But not on people like this.

Because if you live in New York City, after taxes, that is your problem. It's not just federal and state. It's federal, state, city. By the time you are done, you are bringing home 100,000 dollars a year. Now that may seem like a lot, but not in New York City.

For the rent, for -- so move. Or you make more money. But it's very difficult in this city to do that.

MORGAN: Let's get brutal, Suze. How should people save? What are things that most people are wasteful about, do you think?

ORMAN: Almost everything. They love -- I almost started a national riot when I went on "The Oprah Winfrey Show." Do you remember this, everybody? And I asked people to simply stop going out to eat for one month. Oh my God, the restaurant industry, I thought they were going to come out and literally pop me one.

MORGAN: You can't blame them, can you? It's a direct assault on their business.

ORMAN: Except they all go out to eat, put it on credit cards. They are nervous as can be when they give their credit card to the waiter, hoping that when the waiter comes back, they'll say you have been approved, because they know that they are pretty much to the limit. Then they only pay the minimum payment due.

So they are going into debt to go out to eat. They go into debt to go to the movies. They go into debt to all these things. People in the United States need to learn how to get as much pleasure out of saving as they do spending.

MORGAN: How else can they save? How else are people wasting money? What are the most common ways people waste money?

ORMAN: Well, I personally would tell you weddings. But then I know that wouldn't be a very popular answer for somebody like me. They normally waste money -- truthfully, their number one waste of money is entertainment and clothes.

MORGAN: Here is my issue with this, Suze.

ORMAN: You have so many issues.

MORGAN: I have a lot of issues. My issue is you can't kill everybody's fun. Even in these tough times -- I actually quite like when Newt Gingrich said let's have a Moon colony. Why Not? Can you imagine the excitement of this rocket going off and landing on the Moon and people walking out and having a colony?

When I grew up as a young lad, I remember the lunar landing. They were the most incredibly exciting thing ever. Rockets firing off.

ORMAN: Shake the cobwebs out of these heads. Go like this with me.

MORGAN: You have got to dream a dream as well.

ORMAN: Yes, but you have to have the money, because who has severe credit card debt in this room? Anybody? You, you. When you go out and you're spending money and you're putting it on your credit card, knowing that you don't have the money to pay for it in full, is it fun? Right?

Even though you do it because you are bored, when you get the bill, do you wish you hadn't done it? Isn't it worse to do that than stay at home and make love with each other?

MORGAN: -- too much of my life. Let's take a break. When we come back, another question from the studio audience, after Anderson Cooper, who is of course coming up on "AC 360."

(NEWS BREAK)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Where do you get your jackets? Well, today, I'm going to tell you. I get most of my jackets in Phoenix, Arizona, at a place called --

(END VIDEO CLIP)

MORGAN: -- playing Suze Orman on NBC's "Saturday Night Live." That is a very good impression, Suze.

ORMAN: It most certainly is, Piers.

(CROSS TALK)

MORGAN: Where do you get your jackets?

ORMAN: Want to hear something funny? So she does this -- she's done it about six times now. We get e-mails saying we have tried to find that place in Phoenix, Arizona, and we can't find it. I'm like, are you kidding me, people. Anyway --

MORGAN: I like this Tweet that's coming. We're getting a lot of Tweets tonight, @PiersMorgan or @PiersTonight. This says, "you can have lots of fun without spending, Piers. Picnics, skating, walks with friends, video night at home with friends."

That is so true. You know, we're in New York now. The best times I have had in New York often involve going to Central Park, getting one of those old creaky wooden boats out and doing my little "Way We Were" scene, where you sort of paddle around, careering into people.

But it's -- I don't know, it's 10 dollars or something For an hour. It's that kind of simple thing that people perhaps could go back to, isn't it? Just having normal, old fashioned fun.

ORMAN: Now you're confusing me. A few minutes ago, you said I absolutely disagree with you. People should be able to go out and have fun and buy this and that.

MORGAN: No, what I thought was you were being a little bit miserable in your outlook. Yes. They're all broken. No one can have any fun. You're not even allowed to eat. You must stay at home in misery watching the "Suze Orman Show." Joking. I'm joking.

ORMAN: Again, you're not broken. But do you feel at times like your spirit is broken, because nobody is listening to you?

MORGAN: I want to rally the troops, you see.

ORMAN: If you rally -- the way you rally them is -- you can't rally them by just saying, come on, let's do this. You have to give them a way that they can sell their house, that they can stay in their house, that they can feed their children, that they can go to school, that they can get a job, that they can do the things that are their birth right.

That's all they're asking for. They're not asking for a lot of money. They're just asking for a place to live.

MORGAN: There's also, I think, an onus on politicians and business people to stop whining all the time. There is a bit of, yes, all these things have to be facilitated. But also a bit of politicians out there showing a bit of consensus, agreeing on policies which everyone agrees are quite good ones, getting stuff done and rallying Americans to feel good about their country and themselves.

ORMAN: Yes, sir. I agree with you on that, but they're not doing it. And all we can say is why not?

MORGAN: I agree, why not? Let's take another question. Audrey Perez (ph) has a question.

UNIDENTIFIED FEMALE: Hello, thank you. Hi Suze. I think you're amazing. Thank you so much for all your advice.

MORGAN: And Suze? I'm sorry. How embarrassing.

UNIDENTIFIED FEMALE: So I recently received a cash bonus. And I'm going to be getting -- I hope you don't ask me where I work -- and an income tax refund. And I wanted to know what to actually do with that. I have 401(k) loans which I got before I started watching your show, which I would never do again. And I have credit card debt. So I was trying to find out what's the best way to use the money.

ORMAN: How much of a tax refund are you going to get? About 3,000?

UNIDENTIFIED FEMALE: Yes.

ORMAN: Oh, how did I know that?

UNIDENTIFIED FEMALE: That was really good.

MORGAN: How did you know that? You're some weird astrologer as well. That was freaky. Wasn't it?

ORMAN: Now, so how much credit card dent do you have?

UNIDENTIFIED FEMALE: I was afraid you were going to ask me that. It's a lot.

ORMAN: Fifteen, 20?

UNIDENTIFIED FEMALE: About that.

ORMAN: There we go. Did I impress you again?

MORGAN: This is now getting very, very unusual. This is mystic Suze.

ORMAN: If you were to increase your exemptions and not get a 3,000 dollar tax refund, you then would be getting 250 dollars more per month on your paycheck. You could then take that 250 dollars more a month and start paying it right now towards your credit card debt.

So next year, this year, raise your exemption so that you don't get a tax refund anymore. If you got a cash bonus, what should you do with it? You should immediately put it towards your credit card debt.

MORGAN: Suze, what has been the single greatest moment of your life? If I could relive a moment for you, what would it be?

ORMAN: You know, I have had so many.

MORGAN: I want one out of you, a straight answer. I got the power. I can zap it back right now.

ORMAN: There's so many. I have to say probably meeting KT.

MORGAN: Really?

ORMAN: The luckiest thing that has ever happened to me, the greatest thing that has happened to me is KT. KT and I got married two years ago in South Africa. You're seeing pictures of her there now. The absolute greatest moment of my life. I would trade everything. I would give away every penny I have just to always be able to be with her.

MORGAN: Because all the money in the world, actually, if you don't have love in your life, is pointless, isn't it?

ORMAN: So that's the greatest thing. And you can see, even when I look at the pictures of us together, you can see it. We're going on 11 years now. It was the greatest moment of my life.

MORGAN: The other signature question of mine, of course, is how many times, Suze, have you been properly in love?

ORMAN: One.

MORGAN: Just one.

ORMAN: With KT. This is it. I have never been in love before that.

MORGAN: Great answer. Let's take a break. One last little segment. I want final thoughts on how we're going to get America back on its feet.

(COMMERCIAL BREAK)

MORGAN: Back with my special guest, Suze Orman. Two very quick last questions. Super Bowl Pick.

ORMAN: New York.

MORGAN: New York Giants, Very popular here. GOP pick?

ORMAN: Romney.

MORGAN: Romney and the Giants.

Before we go, an only in America story about one of the biggest successes in the country and the world is, of course, the stunning five billion dollar Facebook initial public offering, one of the biggest IPOs in history, and an amazing example of American ingenuity.

The world's largest social network began in CEO Mark Zuckerberg's Harvard dorm room and it grew into a 100 billion dollar company with over 800 million active users.

Facebook has created over 235,000 jobs in the United States, inject6ed over 15 billion dollars to the country's economy, all with a concept, social networking, that didn't even exist when I was growing up.

It has now come to define the World Wide Web.

So for those who say America has forgotten how to create jobs or be successful, I answer with one glorious word, Facebook. Thank you to Suze Orman, a fantastic guest. Thank you to my audience. And thank you at home for the Twitter and Facebook contributions. Been a fascinating show.

Now "AC 360."