June 15, 2009 -- If you build it, they will come. And they certainly did, when "Nightline" built a booth and invited the "Money Lady," financial guru Suze Orman, to sit in and dispense advice, for free.
Suze tweeted about the event and put the word out on her Web site. As a result, a line had formed an hour-and-a-half before her scheduled appearance at Bryant Park in New York City on a sunny spring lunch hour.
The crowded park was a far cry from Orman's usual domain, a studio with a few techs and her producers as the audience.
"I love today," Orman said. "I love today because you have to remember ... on my set, every Saturday night, I'm looking into a blank camera. And all I'm hearing are people's voices. So I have to take my cues just from their voice."
With signs on the booth announcing "Ask Suze" and "Free Advice," Orman hopped up on her stool and got right down the business. The first question on most peoples' minds:
Amy, married with one child, was Orman's first customer. She and her husband earn a combined salary of about $225,000 a year. They had offered $610,000 on a San Diego condo and were hoping to receive a little government bailout money. Orman stopped her mid-sentence.
"OK, stop for a second," she said. "Everybody listen to me, very, very carefully. You just said to me that you want to take advantage of the $8,000 tax credit. Here's the problem."
Orman explained that there are some catches to getting that tax credit. First of all, the tax credit can be as much as $8,000, but it cannot exceed 10 percent of the purchase price of a home. More importantly, there are income limits on who can receive the credit: $75,000 for singles and $150,000 for married couples.
Amy and her husband earn too much to qualify. But that wasn't Amy's only issue.
"My husband's job is not [secure]," she said, adding that signing the contract on such an expensive home "has been keeping me up the last two nights here in New York."
Orman broke down Amy's situation quickly.
"If your husband loses his job, almost 100 percent of your income is going to go toward this home," she said. "I now have your monthly expenses at probably, almost at $8,000, $10,000 dollars a month.
"Girlfriend, you cannot afford this home that you are thinking of buying."
Suze Orman: Free Money Advice
Next up was Katherine, a first-time New York homebuyer. From the sound of her conversation, she might have wanted to consult Orman before purchasing.
"I just bought my first apartment on the Upper East Side," Katherine told Orman. She said she paid $275,000 last year for a studio and got a $7,500 tax credit. But last year's tax credit, she discovered, has to be paid back, at the rate of $500 a year for 15 years.
Katherine wanted to know whether she should invest the $7,500 from the credit and risk losing it -- or keep it safe in a savings or money-market account.
Orman's answer was swift.
"Keep it, because it's $500 over the next 15 years, at 0 percent interest rate," Orman said. "So for the next 15 years -- too bad you didn't do it this year, you would have gotten a tax credit and NOT have to pay it back. ... What are you going to do?" Orman shrugged. "Just over the next 15 years, just pay $500 [a year] and that's that."
Calvin, a 24-year-old CPA, was wondering if he should throw caution to the wind and get on the property ladder now, with prices and rates at incredible lows.
"I have $15,000 in a Roth IRA and I have $4,000 in a 401(k)," he told Orman. "Would you recommend cashing those out as a first-time homebuyer?
"No," was Orman's immediate answer. "These are retirement accounts. Even though you're a CPA, [if] you're driving down the street, something happens, you're in a car accident and now you can't function anymore, you really can't pay your bills, you can't work. And you have to declare bankruptcy. Is this money protected from bankruptcy or is it not, Mr. CPA?"
"It is protected," he said.
"It is," Orman said. "So you are not to touch money in a retirement account. This is for your future."
So dreams were dashed for several would-be homebuyers. Orman urged caution and approved no one during the morning session. The next topic at hand:
First up on the new topic was Dave, a 54-year-old small business owner who's leery of 401(k)s.
"I just started a business five years ago," Dave told Orman. "Doing well, I opened up a 401(k), but the 401(k) was tanking and I stopped."
"You should have continued," Orman said. "If you keep dollar-cost averaging into good, no-load mutual funds, or things that make sense for you ... as the market goes down your dollars buy more shares, the more shares you have, the more money you make. Don't stop now."
But "don't stop" does not mean you should contribute the maximum amount. Maria, 36 and single, of Long Island, N.Y., had a similar question. Before she spoke to Orman, she was contributing 12 percent of her paycheck, she said.
Suze Orman: Paying for College
"Alright, that's the first thing we are going to change," Orman said. "First thing I want you to do is, only contribute up to the 3 percent that [employers] match, that's what I want you to do. So, today, or tomorrow, go into your HR office and you're actually going to lower your contribution into your 401(k) from 12 percent to 3 percent."
Maria also qualifies for a Roth IRA, something Orman said she should take advantage of.
"I want you to fund your Roth IRA up to the maximum ... So you can put in $5,000 into a Roth IRA."
Orman explained the cutback in 401(k) contributions.
"You're far better off saving for an eight-month emergency fund," she said. "You're far better off paying off your credit card debt, far better off saving for a down payment on a home."
Maria had one more question for Orman: What about life insurance? Orman said life insurance is for people with dependents, that term life is preferable to whole life and that the insurance should be kept only so long as dependents are in need. "Most people have insurance for their children," she explained. "Once their children are 23, 24, 25 years of age, if something happened, the kids would be okay." No more insurance required, she said.
After tackling questions on home buying and retirement, Orman got a surprise question from 16-year-old Orlando and his mother.
As the child of working-class parents growing up on the south side of Chicago, Orman said, she had to pay her own way through college, so she's a big proponent of parents just telling kids "no."
"Why can't my mother pay for my college?" Orlando asked Orman.
"My question is back to you," she said. "Why do you think your momma should pay for your college?"
Orlando's mother is single and works about 10 hours a day. She also has about $20,000 of credit-card debt.
"He's a 16-year-old, vital man, almost" Orman said after the interview. "He should be helping mom. He should understand, OK, go to community college. Go to a college that you can afford. How much more can you expect, especially a single mother, to do?
"She's doing everything she can, just to provide him with clothes, food, a roof over his head, and try the best to save for her own future. So ... if you have the money, OK. Help your kids out. If you want. But if you don't have the money, you'd better start talking to your kids young enough so that they don't grow up to say, 'Mom, pay for me.'"
With education, home-buying and 401(k)s covered, Orman still had another big issue to cover:
What Should I Do With My Money Now?
Next up was a woman whose story gave Orman a chance to sound off on one of her major pet peeves. At age 62 and recently retired, the woman had a broker who had just made a questionable move with her money.
"So you actually had to come out in cash, to go back to an IRA rollover with the same broker and re-buy the same funds for a new commission. Is that what you are telling me?" Orman asked, her voice rising. Looking directly into "Nightline's" camera, she said: "You crooks. You crooks, you are crooks, do you hear me? You are crooks."
Orman explained her outburst later.
"An honest financial adviser would have said, You know what? Why don't you just leave your money in a 401(k)? You're already 62 years of age," she said.
"But, no, he made himself a quick $10,000 probably, or at least $10,000 worth of commission ... What was he thinking? Now she's lost money. Why would he have done that to her? Because he needed money to pay his mortgage, his car payment, his kid's tuition, his retirement. Shame on him. You wonder why I get upset?"
Next, Orman surprised the crowd with the answer to a question from Kristen, a 39-year-old dancer with $11,000 in credit-card debt and decreased bookings. Her question: pay off her credit card? Or save?
"So, here's the problem. The credit card industry has changed dramatically today," Orman said. "You pay off this $11,000 credit card debt, there is a fabulous chance that they will close down your credit cards altogether.
In a departure from her usual advice, Orman now recommends saving before paying. "Lot of controversy over this one," she said. "So you take every cent you can, you pay off your credit card debt, you pay off your debt -- they close you down. You can't charge on them anymore. ... What are you going to do?
"Answer: Save, in a saving, in an emergency fund, continue to pay the minimum on your credit card debt until you have enough of a cushion so that if they do close down your credit card, you don't have to worry."
It was an eye-opening day for the Money Lady and for those who spoke with her. For Orman, it was another chance to gauge the mood the country's in now, to see if people have taken in the lessons she's been trying to drill into millions of viewers for years.
"It tells me that people are getting more involved with their money," Orman said. "People are watching what they are spending money on. People don't want to be in debt anymore."
The advice and opinions of Ms. Orman are her own and not those of ABC News. People should consult their own investment advisers or conduct their own due diligence before making any investment or financial decisions.