Monthly Archive

I know I said that I don’t talk about investing here, but recent events have forced my hand.

I got a lot of flack from some of my peers about not advocating investments as a way to get rich. I was told that I was irresponsible, that I was teaching a flawed system, and worst of all– that I was preparing the future for mediocrity. “The only way to get rich is by investing”, I was told (of course many of these peers work at investment companies, but somehow that’s supposed to be okay).

Then the market started to drift downward (drift like a rock). Many of my friends and peers lost a very important anatomical part.

Now, in an effort to make themselves feel better, I’m hearing “this is a perfect opportunity to buy”, and “it’s like a great sale for stocks”. Meanwhile, those who have saved prudently and invested where they could do so wisely, aren’t even phased by it.

I’ve never eaten goose liver pate’, so I don’t miss it. I’ve never wanted to. The point is, most “experts” who worship at the idol of investing need to convert you to their way. If we were to go through another Depression, they would be devistated, and as we all know, misery loves company. Those of us who build strong financial skills will be fine, and will survive, just like our grandparents did.

So, if you choose to invest, please be smart enough to not invest more than you can afford to lose. Never count on investments to finance for your future. At best, they can enhance your future, but at worst they can ruin it.

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We will be going through some maintenance.  Be back ASAP

Ever feel this way? You’re a bright, energetic, hard-working, and easily liked young person, probably working at one of your first jobs, and you like everything about your job– almost. There’s a problem. Your boss just doesn’t get it. So how do you handle the situation.

I’ve been in this situation once or twice, and the first thing you need to do is look inward. Is your boss really a tool, or is there some other source of your frustration, and they are just an easy target? Remember, they are people too, and like the rest of us, they have feelings and failings. If they aren’t really the problem, maybe you need to examine what is the problem.

But what if they are the problem? You’ve looked at everything, and it turns out that they are the problem. Then what? First, I’m going to be brutally honest with you. If you and your boss mix badly, you will most likely lose. They have the company backing them in many cases, and you can always be labled as a bitter, malcontent. In some cases, it may be better for you to cut your losses and get out before they get you out.

If you decide that it’s worth fighting, then you need to do it right. First, approach the offensive boss, let them know that you are experiencing some frustration, and let them know that you are really interested in working things out. Don’t go in with attitude, and don’t go in angry. When you do, you will always say or do something stupid. Instead, honestly try to approach the situation trying to solve the problem, and be open to the concept that you may be the problem. You may find out that your boss is a jerk because they have to be, or that you were misunderstanding the signals they were (usually accidentally) sending. That may be enough right there. Of course, you run the risk of annoying them (which usually ends the conflict in your dismissal), but you won’t know until you try.

If you don’t solve the problem with this meeting, most companies have a mechanism in place that allows you to go to their boss. Again, and I can’t stress this enough, don’t go in pointing fingers or firing off your mouth. If you really want to solve the problem, they need to see it. This meeting is more important, because this one will dictate whether or not you will stay with the company. If things go badly, you need to start looking for work right away.

If, after all other options are exhausted, you still feel the need to move on, do it right. Leave two-week notice, and work just as hard during those two weeks as you did during the first two weeks you were hired. When you leave, shake hands with everyone (even the tool!), and thank them for giving you the opportunity to work with them. Make sure you mean it. This boss still has one card to play when your next employer calls for references. Legally, they can’t say anything bad about you, but there can be a lot of communication in what is NOT said.

Don’t be dumb, don’t steal anything, don’t curse them out, and don’t try to poison anybody else against your former boss. You might not work there anymore, and therefore aren’t dependent on them for your money, but other people are. Chalk it up as one of many, many, many, MANY learning experiences that you will come across during your career.

Have you had to deal with this situation? How did you do it? Are you a boss now and have something to add? I want to know.

Every day I look at my stats and I look at what questions are popular out there.  Every day, the same questions come up from people who want to know more about finance.  They always ask about FICO.  They want to know how to see their FICO, they want to know how to change it, they even want to see which FICO is required to qualify for a loan.  My big fear is that young people are going to start becoming obsessed like their parents about FICO.

 Having been a loan officer for a long time, let me say that loan officers are the most overpaid, underworked people in the job market.  What they do requires no skills, little training, and absolutely no personality.  The sum total of what most loan officers do is this:

• Make sure all lines are filled out on application.
• Look at FICO score.
• Compare requested amount with chart that dictates what loan can be approved.

This is obviously only part of the story, but this is as much as many loan officers will ever find out.  FICO is as important as any other private company that says how good you are at anything else.  It’s high school all over again.

Now for some truth amid all the myths you have read in other places.

1. I know personally, and have seen applications come across my desk, 18 year olds who have “700″+ FICO scores, even though they don’t have any actual credit.  What they have is parents who have put them on credit cards to use for emergencies.  The kids get the benefits of the long credit history without doing any of the actual work.
2. Conversely, I know people in their late 50’s and older who have never had problems with homes, cars, etc, with no FICO score whatsoever.  They may be widows, or divorcee’s who have no individual credit, but have had a good history.

To most loan officers, the young person gets the loan, and the older one doesn’t.  Is that right?  Does that seem fair?

What you can do.

Instead of obsessing over an arbitrary number, focus on paying your bills on time, living up to the obligations that you start, and not borrowing more than you can really afford to pay.  As long as you do these things, as well as staying employed, your FICO will be fine, but most importantly, you will be fine.

How quickly the mighty good fall.

Note. This has nothing to do with illegal immigration. This is strictly about finance.

B of A is now issuing credit cards to people without a Social Security number or proper identification.

Their statement is that the hispanic market (illegal immigrants) is one that they must grow in or they will not grow as an institution.

Here’s where my problems start. First, like it or not, there are laws, and people who break those laws should not be given an incentive to do so. Elliot Ness (the guy who captured Al Capone) was once asked what he would do when they repealed Prohibition. His response was that he would take a drink. When it ceases to be illegal to sneak into this country, then give people who do so whatever services they can legitimatly get.

Second, this is obviously a predatory practice. They are taking advantage of people with few alternatives. The interest rates they will charge on these credit cards is well over 20%. Most of the people who take advantage of this program can hardly afford that much interest on a credit card. Most of us who don’t have to work “under the table” can’t afford it either, but that’s another issue. B of A simply doesn’t care. They will collect whatever they can from whoever they can, regardless of the individual’s ability to repay.

Third, and where it really affects the rest of us, B of A knows full well that most of these people will default on their credit cards. In order to make this more profitable, you and I will have to pay higher fees, get lower interest on savings, and pay higher loan rates. If you don’t bank at B of A, and you think you are not going to be affected, think again. Think of where your paycheck comes from. Think of who your grocery store banks with. Think of the many companies you do business with that bank with B of A. None of them want to lose money either. Who do you think they will pass their fees to??

So, how do we avoid this fate? First, if you do bank with B of A, close your account(s), pay off your loans, and sever any other ties that you can. Second, start letting them know how you feel about this practice. Let them know that what they are doing is wrong, and that they are bad people for doing it.

When I was a hiring manager, one of the funniest things I would see was young people coming to fill out applications for work. I couldn’t believe that nobody would teach them better.

Now, I don’t want to sound like some nattering old man, but here’s a little advice if you decide to join the working class.

1. Dress to impress. When I say this, I mean impress the manager, not impress your other friends who have the same fashion sense that you have.
2. If you refuse to cut your hair, at least make sure it is combed, and that you are otherwise appropriately groomed.
3. Mr. T. never came to apply for a job with my company, but several of his disciples have. Limit your jewelry so that it is unobtrusive, and if you have any potentially offensive stuff, don’t bring it to pick up an application (ie: Don’t wear your marijuana belt-buckle to my office). I don’t care how you dress normally, I’m only concerned with the time you have to be in my general presence.
4. Bring two pens. Both black or blue ink (not gel, not crayon, not anything else).

Overall, if you look at yourself in the mirror, and you can identify which clique you belong to at school based on how you look, that is a bad thing. You shouldn’t be able to look at yourself in the mirror and say, “Slacker”, or “Emo”, or anything else, but person. The working world is all about conforming. If you need further motivation, consider how much more stuff you can buy that will annoy “The Man” if you had a job.

A little while ago, I was in a retail store which shall remain nameless. I knew what I wanted to buy but I was kind of bored and had nothing better to do, so I strolled around the store. Usually when I do this, I am bombarded with people who are willing and eager to help me. This time was different. Nobody came around, nobody said “Hi!”, nothing, even though it wasn’t busy in there.

I deliberately walked by, and past, two employees who were having a conversation about the Super Bowl (this was just after we found out who was playing). I walked past them, paused, looked around like I was looking for something, abd when nobody responded, I walked past.

When I got to the area that had what I wanted to buy, I picked up the item, and looked at a couple of similar items. One of the salespeople that I had already walked past once was less than 10 feet away and facing me, but again, no response. My response was probably out of line, but I was done. I said loudly, “This is B——-! F— this place!” and I left.

The item I was buying was pretty expensive, and I really wanted it, but it wasn’t worth being ignored to get it. The lesson here is this: No matter what you do, take pride, and understand who you truly work for. They lost a sale because they didn’t know this.

Anybody have a better way to handle this type of situation? Let me know!

As promised, I’ve reviewed Wells Fargo in the same manner that I reviewed Bank of America.

Wells Fargo is a little different because it touts itself highly as being an online bank.

Wow!  For an online bank, they charge for Bill Pay, which is unheard of today.  I also really didn’t like the idea that they only discount your fee if you have direct deposit.  A bank that large would do well (get it? WELL), to waive a monthly fee like every other institution in the free world.

Periodically, I like to surf around and see what other people are saying in the PF world.  I stumbled onto Get Rich Slick

www.getrichslick.com

and read his take on an article about the “dangers” of debit card usage.  While I might not agree with GRS, I think his is an important point of view.  Please take a look at his site, see what you think, and make some comments.  I’m really curious what people think about this topic.

 If you like, feel free to email me if you want to get into a more detailed conversation.  wil@finance4youth.com