Stimulate Me: The Greatest "Story" Ever Told!

Photo Courtesy of kyle/thebookpolice

Growing up, I used to get in BIG trouble for calling someone a liar. Even if they actually were lying! Instead I was encouraged to say "So and so told a 'story'."

This never jived too well with me. A lie is a lie. And there's a BIG LIE being told to you on a daily basis as far as the economy is concer-- um excuse me...

THIS JUST IN...

"Only YOU can prevent this nation's colapse!"

While I was driving home last night listening to talk radio, I heard a politician lay out the steps to strengthening the economy. Basically, he said it was all on YOUR shoulders to fix this. Yes YOU!


"Thank Heaven for the express line, I only have 7 items!"

YOU have to buy brand new American cars, and Flat screen tv's. Oh and while you're at it please prop up the restaurant industry by eating out more so that we can get back to being America the Beautiful... Um and since we're on the subject you would do well to pick up a premium gym membership so that all that eating out doesnt ruin your perfect American figure. Mmmm but come to think of it either way you're gonna need to buy a whole new wardrobe cause either you're gonna lose weight from working out, or gain it from eating out... just a thought. - $igned : Capitol Hill, Wall Street, & The Media.

P.S.: You can't save money and save the country from financial ruin at the same time so dont even try the first one. We're counting on you to do what's right for your fellow Americans...


Emancipation from Stimulation...

I'm hearing more and more about people who want to do the right thing for the 'economy' so they are foregoing paying down their personal debt, and spending more of their income to 'help' troubled industries such as dining, travel and retail.

C'mon guys, please dont compromise your responsibilities to your family by taking on any part of this 'national burden' that's being sold to you on the airwaves. THAT IS NOT YOUR JOB!!

If you DO still have a job, it is to provide for your family and manage your personal situation to the best of your means.

Unless you are an elected official, or an economic adviser by profession, this nation's economy woes are NOT your responsibility.


The 4 Walls: The frame of your financial house.

In times like this - no scratch that -at all times you have 4 main responsibilities, or what Dave Ramsey calls the 4 Walls: Food, Shelter, Clothing, and Transportation.

When things are tight, keep those 4 things going, and only those 4 things. Not the 401k, not the greens fees at the country club, not the Costco membership, and not the standing order sent to you monthly from Omaha Steaks or the 12 different magazine subscriptions you currently recive.

While the nation is expecting you to take care of it, I'm expecting you to take care of you.

So what's it gonna be?

@W


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Suze Orman: Your Loss is Her Gain...

Photo courtesy of Glennia


"I'm proud that I make money, that I work hard, that I've created what I've created. But I can tell you this: I haven't hurt one person getting here." - Suze Orman

Oh really Suze?

I usually don't do this. I usually don't 'go after' someone in the public eye. But Suze Orman has pressed my final button, so I just have to get this off my chest.

Orman is considered to be the most recognizable personal-finance expert in the world. And quite possibly the most polarizing as well.

Now anyone who follows this blog knows that I'm a fan of Dave Ramsey's methods for eliminating debt and managing your finances. Not because I have a 'thing' for Dave, but first and foremost because he uses the Bible as a foundation for the principles he teaches. There is proven truth to what he says... he doesn't sugar-coat it, he doesn't water it down.

Suze on the other hand seems to "play to the crowd" a bit too much for my liking. She wont tell you what you NEED to hear all the time, because it may alienate you from being endeared to her.

I just read an article about her on Time.com called "The Queen of Crisis". I highly recommend checking it out. But I digress...

My biggest problem with Suze is that she's not afraid of credit. She wants credit to be your friend in turning your woes into wealth.

Last week I caught the 2am replay of Oprah. (Please don't ask...) Suze Orman was the guest of honor and she was answering every one's "tough" questions about this economy and their money. Questions like: "We're getting married this summer and we want to spend no more than $50,000. After our expenses each month we have about $500 leftover. How can we afford to make this happen?"

Suze told them that they couldn't afford it, but she then went on to tell them HOW they could afford it!

Oh, and how about the couple that wanted to remodel their kitchen and bathroom by taking out a $76,000 Home Equity Line of Credit (HELOC)? Suze said "Go for it!"

Whaaaa? Excuse me? Have you seen property values lately?

To me this is reckless! While we're facing the worst economic situation in the last 80 years, The world's foremost financial expert is on a show with possibly the widest viewership into the 'average American home' and she refuses to be a voice of reason against the mentality of trying to afford what you cannot afford?! Really? At a time like this?!

In the quote at the start of this post, she says she hasn't hurt one person getting to where she is... but I beg to differ. With advise like the variety she gave on Oprah, I shudder to think how many people she hurt in that hour alone. How many people did she just empower to continue to run their finances into the ground?

Ok, and one last question...

Why does she charge $80,000 per speaking engagement? Is her advice really that valuable? As I said before when it comes to the economy, our loss is apparently her gain.

Till next time,

@W



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@Risk Theater: Crisis of Credit (Visualized)

Photo courtesy of Students of Calvary

http://www.crisisofcredit.com/



"The Short and Simple Story of the Credit Crisis.Crisisofcredit.comThe goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated. This project was completed as part of my thesis work in the Media Design Program, a graduate studio at the Art Center College of Design in Pasadena, California.For more on my broader thesis work exploring the use of new media to make sense of a increasingly complex world, visit jdjarvis.com"


Hi guys, It's been a while since I posted a video and I found just the thing today.

This is a quick, easy and sleek explanation of the financial collapse we all now have front row seats for.

Enjoy!





Any Questions?

@W


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Beer and Money... A Match Made In...(Nevermind)

Photo courtesy of GraphicsDB.com

During this rollercoaster of a year for the economy, Americans have tightened budgets and pinched pennies in various ways. Many have cut back on driving to ease the cost of gas. Many have skipped the box office ($10 per ticket) in exchange for Redbox ($1 per movie rental). (P.S. - I love you redbox, you've been a wonderful friend to my wife and I while we get out of debt! lol)

But one staple of American life has strangely resisted the downward pull of our slumping economy. Actually this industry is experiencing a record surge in sales instead of the decline seen elsewhere.

So what is this magical product? I bet you would say Oil, or Gas, but you'd be wrong... well kinda wrong because they're not the product I'm talking about in this instance.

Homer Simpson would call it DUFF... er - I mean BEER.

For 2008 beer prices are up 7% over the past year as brewers passed on higher manufacturing costs to consumers.... BUT...2008 sales are also up 6.8% as well! It would be one thing if they jacked up the prices and usage remained roughly the same... but you actually mean to tell me that people are paying more for it, and STILL buying more of it at the same time? Is it really that deep America?!

Well in a word... Yes.

See, beer and alcohol are about as close to the perfect 'product' as we'll ever see. When people celebrate, they get drunk. When people wallow in their sorrows, they get drunk. Got that huge promotion? Let's go get drunk. Just got fired after 20 years with the company? Hmmm... I know, let's go get drunk! (and now go look at the picture for this post again lol.... deep aint it?)

And as most of you know firsthand, or have *ahem* 'heard' from others, drinking aint cheap! lol

Still, you have to tip your hat to anyone who has the moral ambivalence to brew and market beer and alcohol. It fits virtually any occassion. unless you dont drink that is...

Making money off of people's joy and pain comes off a bit parasitic or opportunistic to me. In a way it reminds me of predatory lenders, which I've seen my fair share of in the past year. But hey, what do I know?

@W

*Just to clarify, I do not condone the consumption of alchol, nor do I partake of it myself. I just wanted to share this observation with you while it was fresh in my mind.

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Tired of Rejection, Consumers Turn to Credit Companies For Approval

Photo courtesy of Todd Heisler/The New York Times

A strange thing is happening here in America. People are beginning to use credit-worthiness as a measure of self-esteem. It reminds me of a saying I just made up; Someone is always willing to give you what you want, as long as you pay for it. (Wow, I like that!)

Growing weary of being rejected for choice jobs and being denied by choice colleges, Americans young and old are trying to buy their dreams on credit. What they dont realize is that sometimes they end up paying with their life. Now hold on a minute I'm not saying they're being killed by credit directly, you should know me better than that. But what I am saying is that the stress and pressure of living the "good life" without a "good income" is taking more of a toll on us than we are openly willing to admit.

The New York Times is doing a brilliant series on consumer debt called The Debt Trap and it's as hard hitting and exhaustive in exposing the consumer debt crisis as CNN's Black in America series is in addressing the state of African-Americans in the US. I highly recommend checking them both out!

I keep asking the question "How did we get here?" And no one seems to have the answer. So I guess I'm taking it upon myself to find and provide the answer for all of you.

The more I see stories like the current one on NYT about Diane McLeod, the more I'm aware of the burden I've been given regarding the debt-free message.

Diane started out debt-free just like the rest of us, but the article goes on to explain how marriage, divorce, illness, unemployment, underemployment, wildly irresponsible spending, and now foreclosure have driven her nearly $250k into debt! Strangely enough though, she still continues to get "Pre-approved" offers from a steady stream of credit card companies, even though her credit is now decimated and she cant afford to pay her existing debts!

Here is a excerpt from the article:

"Recently an envelope arrived offering a “pre-qualified” Salute Visa Gold card issued by Urban Bank Trust. “We think you deserve more credit!” it said in bold type. A spokeswoman at Urban Bank said the Salute Visa is part of a program “designed to provide access to credit for folks who would not otherwise qualify for credit.” The Salute Visa offered Ms. McLeod a $300 credit line. But a closer look at the fine print showed that $150 of that would go, as annual fees, to Urban Bank."

Hmmm, quick question: If you cannot 'otherwise qualify' for credit, why are you still being provided with access to it?!? Greed is to blame for most of this mess. Both the greed of consumers to have what they want, when they want it, and live beyond their means as a way of "survival". And the greed of companies to sell you things you cannot afford so that you have to pawn your birthright, your values and your spiritual inheritance to purchase them.

Again, how did we get here?! What happened to our values?

I'm getting into the daily habit of reading a chapter of Proverbs. I read the chapter that matches the date. Yesterday was the 23rd and while reading I read this:

"Do not wear yourself out to get rich; have the wisdom to show constraint."
Proverbs 23:4 (NIV)

I love what this text is saying without saying it. My personal translation would say, "If you show constraint and build your wealth the right way, you will be healthy enough to enjoy what you have earned." No borrowing on credit, no loans, no get rich quick schemes.

Showing constraint in your finances is called a wise thing in this verse...

Aha, that's the answer to my question! I now know how we got here! We're not reading our bibles, duh!

Thanks for reading,

@W

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America: Our Love Affair With "Brand" Names...

All this...







Equalls this....





photos courtesy of gtmcknight and shadphotos

*I must warn you, today's post officially counts as a rant. I'm not in a bad mood, and I'm not having a bad day... but some days I feel the need to give it to you straight. It is what it is right? I'm not out to hurt your feelings, I just want you to ponder what I'm saying here...




BRAND


–noun


1. kind, grade, or make, as indicated by a stamp, trademark, or the like: the best brand of coffee.
2. a mark made by burning or otherwise, to indicate kind, grade, make, ownership, etc.
3. a mark formerly put upon criminals with a hot iron.
4. any mark of disgrace; stigma.
5. branding iron.
6. a kind or variety of something distinguished by some distinctive characteristic: The movie was filled with slapstick—a brand of humor he did not find funny.
7. a burning or partly burned piece of wood.
8. Archaic. a sword. –verb (used with object)
9. to label or mark with or as if with a brand.
10. to mark with disgrace or infamy; stigmatize.
11. to impress indelibly: The plane crash was branded on her mind.
12. to give a brand name to: branded merchandise.
13. to promote as a brand name.


Of all these definitions taken from Dictionary.com, I like #2 the most... ownership is the name of the game. All of these products, services, toys, gadgets, fashions, and trends are vying to own a share of YOU.


YOU are the stock...

YOU are the "marketplace"

YOU are supply and demand

YOU are the numbers that fly across the stock tickerboard.

Not some store, not some fictitious 'average consumer'... YOU!


Nike, Sony, McDonalds, and Verizon dont exist without YOU. Visa, Exxon, Costco and Wegmans have nothing to sell if you dont buy...


Now I hear what you're saying. "You dont honestly expect me to stop buying gas, groceries, grillers (30 Day Veggie Plan shout out!) and games, do you?!?


No, I dont. But that's not the point I'm trying to make. What I'm trying to get at is that we've grown accustomed to buying from the highest bidder, not the highest provider of quality or value.


It's the little things... next time you head to Walmart I dare you to buy the off-brand walmart version of everything you would normally buy "branded". From toothpaste to toilet paper. No Mentadent, pick up the Equate Winterfresh toothpaste instead. No 4-pack of Sharmin toilet paper, pick up the Kirkland 12-pack of TP instead for the same price.


See, our problems are much larger than credit card debt, and the mortgage crisis. Our rampant consumerism and materialism is killing us in droves. We are choosing to stay this way. It's an addiction much in the same way smoking is.

My wife and I just lost a friend to cancer. This time last year she had surgery for a brain tumor and she knew she had to give up smoking or die. She stopped for a while after learning the news... but more and more time passed and the cigarettes slowly started making appearances again. She could'nt put them down, even to extend her life.


How many financial 'obligations' (Netflix, Speigel, Verizon Fios' 7000 channel package.) do you carry? Would anyone really notice if you switched to Payless dress sock instead of Kenneth Cole's? Will you ever become a Billionaire by spending $300 on a Billionaire Boys Club wallet?


How long are we going to continue going broke making them rich?


How much longer are you willing to be "@Risk" like everyone else?


End of rant, you can all go back to "normal"... but why would you ever want to?


@W


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The Predator, The Prey, & The Unexpected Protector...

Photo courtesy of Olivier DELAERE

This is my first attempt to put video up on the site. I hope you enjoy this. During my last post I mentioned how Dave Ramsey advises debt-dumpers to be "Gazelle Intense". Well I found this video on YouTube that illustrates that saying, but with a twist. In this clip a cheetah (the predatory lenders of the world) is mercilessly toying with a baby gazelle (you and me) ... but the most amazing part is WHO steps in to protect the baby gazelle from the clutches of the enemy!



After watching that, I can't help but think of how Christ steps in to protect us when the enemy comes around to toy with us. My favorite part is that he doesn't even DO anything, just his mere presence makes the enemy roll out!

Hope this blesses you as much as it did me!

@W

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Pending Transactions or "When $16.05 costs you $86.05" Part II... Finally!

Photo courtesy of TW Collins

Here it is folks! The long awaited sequel to the smash hit article "Overdraft Fees, or "When $16.05 costs you $86.05" Part I" !!

There's an old adage that goes a lil something like this: "Cash is King!"

For years I refused to accept it while I was using my debit card to purchase everything under the sun that I both could and could not afford. But more recently I've come to know and love that saying in a very special way.

Dave Ramsey calls it the Envelope System, and it's just as simple as it sounds... If you know how much you're budgeting towards an expense, withdraw that amount in cash, place it in an envelope, and spend it.... but once it's spent, you get no more until the next check shows up. If your budget is $100/week for food, and you eat out on Monday spending $75... then it looks like you'll be eating PB&J for the next few days!

Yes it takes discipline to place yourself on this type of system, but not nearly as much as you would think. Now, back to that saying "cash is king"... here's where it comes into play with the envelope system. As you spend your money out of that envelope, it allows you to instantly assess, inventory, and prioritize that next purchase. As you see that money dissolve in real-time out of your envelope, it forces you to question whether you really NEED to spend money on that next item you intend to purchase.

But what I truly love is that the envelope system is maybe the closest you can get to experiencing personal-finance-instant-gratification! There are no pending payments, no waiting for a payment to clear your account, and no getting caught up in the ODF cycle. You take the Russian out of the Roulette! And you gain a big portion of your financial control back! All by stuffing your cash in some envelopes and sticking to the script.

I've become somewhat of a celebrity at my local bank branch because of the envelope system. Ok, so maybe I just threw in the celebrity part, but each time I come around they know me by name. They've given me the nickname "Cash-man". So what if it's not the freshest moniker, at least they know me for something positive!

See when I walk in, I already have a very specific breakout of how I'd like to receive my cash. I know the exact number of $100's, $20's, $10's, $5's, and $1's I'd like to withdraw. Unlike many people I don't just let the bank give me 100's and 20's, if that's not exactly what I NEED. After all if I'm banking with them, then I'm their customer, and that means that them giving me the exact amount I need is part of servicing the customer! ( WHAT A CONCEPT, eh?!)
I'm writing this as a follow up to an incident that happened to us in April (read the title of this post to get the gist) because banks are literally milking us for all we're worth as a nation. My wife and I are sick of being caught in this vicious cycle where only the banks and oil companies are having all of the fun with this money thing!

Too many of us are living right on that line of financial ruin. If that whole Overdraft experience had happened to us before we got on Dave Ramsey's TMM, things would've quickly spiraled WAY out of control. One overdraft fee would cause some other pending payment to come up short, which would cause another overdraft fee and on and on...That's what living check to check and far beyond our means has done to us as a society. It's the root of the credit crisis, the mortgage crisis, the stock market volatility and it just spreads like mold from there. They are making Trillions off of us because of the trap we've allowed them to spring on us.

I tell ya what, if this sounds a little too drastic for you to try all at once, Dave Ramsey suggests starting out with putting only your Food money under the envelope system. So this means that on payday, you decide how much you realistically want to spend on food for the week, you withdraw that money in cash, mark an envelope with the word FOOD, and ALL food purchases are made from this envelope for that pay period. If you run out of money before the next payday, tough luck! 1) It means you need to evaluate where your food money is going. 2) you should explore more cost effective ways to stretch that dollar amount. Or 3) you need to increase your Food amount but decrease some other aspect of your spending. After doing that for about 3 pay periods, you will know how much you can realistically spend out of your pay check towards food. And this knowledge will help you curb the habit of chronic overspending.

Dave Ramsey's program is all about achieving Financial Peace. And I really must say there is a profound sense of peace in knowing how far we've come in just a few months of doing the program. That experience was not nearly as damaging as it could've been because we now envelope virtually all of the money that we budget from each check. None of the panic of worrying what check might bounce next. Why? Because we withdrew all of our expenses in cash to avoid that. Now we just have peace...

Financial peace....

Peace,

@W

To get the full impact of this follow-up article, please take a moment to go back and re-read the original post about how our bank made $55.00 in profit off of us from only $16.05 in purchases.

Overdraft fees, or "When $16.05 costs you $86.05" Part I

Photo courtesy of Snappy Larry

Ok so I couldn't sleep Monday morning. I woke up around 4am and just had a sense that i wouldn't be getting back to sleep. So I flipped open my Sprint Mogul and started typing out this post. I had some exciting topics lined up to write about this week until I realized that I was basically ignoring an extremely relevant and interesting story to share with you all. So the other topics will have to go on the back burner for now cause nothin else is cookin till I work my way thru this pressing subject matter.


So what is this all about? Well as much as I hate this subject I think I should dedicate a post (or two) to the wonderful world of Overdraft Fees. How they are not considered to be predatory lending I will never know.

Yup as you can probably tell by the title today, we got hit over the weekend by this snare of the Enemy. (no not the devil, I'm only dealing with banks today... But feel free to use them interchangeably if you wish.)

This time there's the added sting that this is our first ODF (Overdraft Fee) since we started our Total Money Makeover (TMM) in October. On the bright side, this is still only the second ODF of our marriage though. Quick shout out to my wife of 9 months and 7 days I love you... *cough basicallywright.blogspot.com cough*

So anyway, yeah this one hurts on a few levels. Like to hear them -- here they go:

The average bank charges a flat $35 fee per overdrafted transaction in addition to 'covering' the expense(s) that put your account in the negative. That means they get $35 whether yo go over by $100.00 or just $1.00. In our case we had two... A $1.05 redbox charge that was pending on the account since Wednesday -- stay tuned, the next post in this mini-series is dedicated to pending purchases -- and a $15.00 charge for gas that was pending since Thursday.

Now before I go any further I REALLY need to testify to how good God has been in my life! He's really changed my heart in so many places!

Back when my wife and I were dating I really had a disdain for banking institutions because of stuff like this. The nickle and dime fee's they'd hit you with to diminish your stacks, and the truly minuscule interest rates they'd break you off with while they were piling their stacks! I mean it would really be enough to throw me into fits of rage. But Saturday night when I checked the account from my phone and saw the negative amounts IT DIDN'T EVEN PHASE ME! I simply turned to her and said "Can you pull up the account on the laptop? Its saying we're overdrawn and we need to have a quick finance meeting to talk this thru." And that was it. No kicking, screaming, attitudes or drive-bys.


Yes we lost out on some much needed funds, and yes it was a hard lesson learned and a very hard time to learn it, but at the same time it was a blessing. Now I say that because it was a painful reminder of why we've gotta get out of our current financial situation for good! It's also a blessing because I get to share it with you in a positive way that hopefully will encourage you to join me in getting out of this mess. I can honestly say that I'm thankful to God for the way He's allowed me to view it this time around.

Ok I'm getting long winded again so let me bring this to a close.

So back to the $35.00 fees. Like I said there was one for redbox and one for a gas purchase, which totals $70.00. They made $55 dollars of pure profit off of me for $16.05 dollar worth of transactions. The redbox charge was fine because we budget for it each check. ($5 total) It was the gas that jacked us up here. Our gas envelope from the previous check got us through to Wednesday night, but we didn't get paid till Thursday morning. This left no opportunity to get to the bank and envelope the money like we normally would, so instead I used the check card... First time in a long time and hopefully the last time for as long as we can help it.

In my thinking banks would be better served by charging a 10% fee. That way if you go over by $16.05 you pay a $1.61 fee but if you go over $600 (say, if your car note doesn't clear), you pay a $60.00 fee. This would punish the behavior and not the individual. For good measure they could even have a sliding scale where the first ODF transaction would be 10% and each following transaction would be increased in increments of 5% per transaction. The bank would still make PLENTY of money and PLENTY of people would still keep their accounts in the negative... And they'd both continue to live the 'American' dream.

@W

My next post will be part 2 of this expose... 'Pending Transactions'