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Cash is King: Lower the Rate

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(Note: I’ll preface this by letting you know that a credit card is the devil.)

Today, while using a credit card that I usually use, that I’ve had for over 10 years, which has a limit over $20,000, to pay an important bill, I was declined.

What?  Declined?  How can that be?  Here’s how.  My credit card company (AT&T Universal Card), in their infinite wisdom, made an executive decision to tighten my credit line to the balance on my account.  In a time when Cash for structured settlements
is king, and required to continue moving the parts of the machine that allow me to make an income, the last thing you want to have happen is this, as it completely eliminates your cashflow.  When I asked them why, they told me they ran a check on my credit report.  Why would they do that?  I don’t believe they did it.  I think they’re just telling us that and the real story is that they’re scared to death that they’re too exposed.  That’s fine and dandy and all, and they have every right to do so, but let’s be reasonable here!  No letter, no phone call, no notification at all.  Ask forgiveness instead of permission right?  Get this…I was paying my AT&T phone bill with my AT&T credit card!

As a 100% commissioned sales person, my income depends on the closing of the next sale.  Expenses that have a return on the investment, such as placing sign posts, sending out cards, subscriptions to various marketing services, and oh yeah, my monthly cost to the brokerage, are typically floated on my “business line of credit,” or, the credit card that I choose to use to fund my operations.  Whether it be a small monthly fee to DocuSign, or my brokerage fee, the credit card is a critical cashflow tool that makes it much easier to manage my monthly expenses.  One payment at the end of the month, easy to track, no problem.

Closing a sale results in me paying off the balance in its entirety at which point I realize my profits and recover my operating cash.  Due to the recent (pardon my french) banking bullshit that we the little guy have been forced to feel through the disgusting practices of some extremely greedy people at the top, many of us are no longer able to pay the very bills that we need to pay in order to continue making money.  How can a credit card company cut off my purchasing power…the very line of cashflow that I need to generate income?  Well, they can and they do.  But that’s just one part of the story.  The interest rates that credit card companies charge are yet another piece of this idiotic puzzle.

Interest Rates are Criminal

After a long phone call, I was able to get my rate reduced from a criminal 29.99% to 12%.  Others have not been so successful.  One colleague recently called the credit card company to have her rate reduced and instead, they eliminated 90% of her purchasing power.  They dropped her from $20,000 to $2,000, and didn’t even giver her a rate reduction.  I was rather shocked to find that I had been increased to a criminal rate.  I’m tempted to never pay them back at all, but that would not be the right thing to do.

I’m not sure how I managed to get the rate reduced, other than being good at sweet talking the operator, but I did get it reduced, and thankfully, they also went back 6 months and credited me the difference of 29.99% and 12% because I had overpaid unjustly.  Missing a payment by one day will screw you so hard your head will spin, and they usually just apologize at you and say there’s nothing we can do.  “You’ll have to contact Experian,” they say.  “They’ll be able to show you why we made the decision.”  No maam, they will not.  They will not be able to show me why your credit card company decided to limit my purchasing power.  They will not be able to show me why my rate cannot be reduced to retain my future business.  All they can do is show me my credit history.  They have no idea how to read your mind anymore than I do.  I have no idea what your executives were deciding when they made the call to cut off my cashflow.

$1000.00 at 30%

I’ve written about this before, but there’s no doubt that it needs to be known by all who use a credit card (which I will reiterate takes extreme financial discipline, which most people don’t have.)

A card with a balance of $1000.00 usually requires only a minimum payment of $15.00/month.  You can buy that new laptop for only $15.00/month right?  Not so fast.  Let’s assume you pay $25.00/month instead of the minimum of $15.00.  At 29.99% annually, you will be paying somewhere around $4300 for that $1000.00 laptop and it will take you 15 years to pay it off. CRIMINAL!  If you fall into this trap once, that’s okay, get yourself out as fast as you can.  If you fall into it more than once, you’re an idiot.

The real lesson to learn about finances is that when you owe someone money, you become enslaved to them and the freedom to experience life as you were designed to experience it is virtually eliminated.  If you can, at all costs, and all interest rates, avoid credit cards entirely.

Cubed

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It’s tight, small, and feels like there are no windows or doors, and the light switch appears to be broken.  I flipped it one way and the next, but it offered no resistance and made no sounds.  The ceiling above me, the wall to the left of me, and another to the right feel course, as though covered in self-adhering sand paper squares, each spaced apart by a few inches, or centimeters.  The floor, moist and slick, seems to prevent any semblance of balance, as though someone had sprayed a fine mist of oil over it’s surface.  As I stand, I slip and fall, and I am reminded of why I am in this little room.  The thoughts of the darkness and emptiness creep in once again, swirling around my cowering shape in the corner of this confining cube.  I am trapped.  Unable to see, I have no idea if there is anything else in the room.  Hours and hours of searching have led me across every inch of this place and yet even though I’ve discovered a window, it has been covered with a thick rubbery substance, almost as though someone has painted multiple coats of black paint over and over again.  It is strong, and I am unable to dig through.  I find one small pixel of light shining through the surface, evidence of hope in a universe where hope seems scarce.  Grooves on the border of each wall stretch the length of each of the 6 sides only an inch from the corners.  I fall asleep.

The room has changed size.  It appears to be alive.  The walls are closer than they were before.  The window is smaller.  My upper body has been scraped raw in the night from where I had been leaning.  There is no room in this living, breathing room anymore and I want out.

The rest?  They’re all locked up in their own little box with their own past experiences and they seem overshadowed by the familiarity that is just on the other side of that little pixel of light.  How can something that feels so right one day feel so wrong the next?  Waking up day after day in this abrasive cube is just as comforting as it is terrifying.

Adding to the Madness

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A recent conversation between me and a good friend at a great coffee shop near down town Phoenix has sparked my interest in looking at the social benefits versus the social detriments of Facebook.  I’m by no means an authority on human behavior, but I am interested in a few things as is he.

Addicted to Facebook

I too am addicted to Facebook.  It’s been a great place to re-connect with people I have lost track of.  I can see what they’re up to, how many kids they have, where they work, where they go on vacation.  In the course of one year, I have reconnected with over 200 people that had some sort of influence over my life either recently, or in the distant past, some significant, and some not.

Brandon Stark, (scouterblue.blogspot.com), writes:

We have created an Open-Door policy to our lives. We exploit ourselves…posting all the details of our lives on our carefully crafted page, giving people no reason to interact by other means. In many ways it eliminates the need for real relationship.

Too Much Information

For me, the truth of the matter is, I don’t want to know that much detail without having the opportunity to sit with you and connect, for real.  As I update my status, staring at the wall trying to think of something nebulous to spew across the system, I can only wonder whether or not I’ve forgotten that 100+ people that I normally wouldn’t say anything to are going to read it.  When I post my status, my initial thought is that those who I see weekly, those who I hold valuable to me for one on one quality time, they are the ones who have become the object of my silly status updates.  The rest of the “friends” that I have on Facebook are so far distant, so far removed by a long, lonely gap of inactivity over many years that what comes out of my mind becomes of no use to them at all, yet they still see it, and they still know what I’m up to.

Reliving the Past

At first I thought Facebook was a great place to gather your friends.  Then I started to chalk it up to a place where I can quickly catch up on where people are, simply to satisfy that curiosity, to answer that occasional “I wonder where they are” question.  In the past, that question typically went unanswered as we quickly reminisced about the past in a few seconds, and then filed it away for another day.  And you know what?  We were okay with it.  Now, the answer to that question has become, “I’ll find them on Facebook and then I’ll really know.”

Yes, you’ll really know.  You’ll soon really know how cluttered your life can become with the plethora of social networking that has become the “norm.”

Social Outcast!

“You mean, you’re not on Facebook?  What’s wrong with you.  It’s the greatest thing since…”

Since what?  It’s only 5 years old and it dominates our every social situation.  Just like anything else on this planet that we experience, there’s a good twist to it, and a bad twist to it.  If used productively and wisely, the twist you experience might just be a good thing.  But don’t let it twist you out of control.

On Blogging for the Right Audience

The very fact that the word blogging has become a verb drives me as mad as the word ‘texted.’  Texted isn’t just a new word, it’s poor english.  However, I’ll use it, because our language is alive, organic, and ever changing.  Blogging is writing.  Writing is something people can do or cannot do.  If you can’t write, don’t blog.  But, if you happen to enjoy writing, then stick to it and spend time creating meaningful information for the world to see.  If you’re too personal, you’ll lose the average reader as they probably don’t care about the fact that your cousin visited last night and made the best sweet potato pie you’ve ever had.  However, if you write about the experience in a manner by which every reader can find value, or at least every reader who is interested in the general topic, then you may find success in publishing.  Otherwise, why in the world would you publish such personal information in a public location?

Is it a Virus, Infection, or well what!

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There’s a certain threshold in a given area regarding how much you should upgrade your home and how much it will make a difference in the competition. It would not make sense to put a $5000.00 stove in a $200,000 condomimium, etc. That’s just one example. So, when a prospective tenant or buyer is looking for a place to buy or rent, there’s also a threshold to their perception of value, and when something seems out of place, it won’t matter to them that you have the nicest property in the area, when it comes to considering the rent or price.

Most upgrades will increase the ability to sell or rent your home over the next door neighbors, but it won’t guarantee that you’ll be able to draw a premium based solely on those upgrades, especially if the area in which you’re renting or buying doesn’t warrant such upgrades.

For potential rental properties, if you ever find yourself saying, “I can’t drop the rent that low because my mortgage is more than that,” then it’s time to think about the cost of carrying a vacant property.

Let’s say your mortgage payment is $1500/month and your home can draw $1200/month in rent. That’s a loss of $300.00/month when it’s rented. If it’s not rented, it’s costing you $1500.00/month.  If you rent it for $1200/month for one year, you’ll lose only $3600.00.  Let’s see, $3600 divided by $1500 is 2.4.

You choose.  You can be realistic about your asking price and get the property rented and lose $3600 in 12 months, or you could hope and pray you get someone to rent your house at your inflated price and lose $3600 in 2.4 months.  Hmmm… 12 months versus 2.4 months.

If this is your way of thinking, it’s just not realistic and you may need to be innoculated from the virus, infection, or well whatever it is that’s keeping you from seeing the real market conditions.

Remember, time is money and the entire nation is getting a swift lesson in loss mitigation.  Most of us are in a “collection” mindset.  We want the full payment and we want it now, and we waste all of our time trying to hunt it down.  The best method is to mitigate your loss by getting something going…anything.

Audrey On the Run

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Audrey is a part of our community of friends.  She recently returned from a 2-year stint in Japan and decided to turn right around and head on out again for another year overseas.  This time, Switzerland.  RICCOLA!

Like clockwork, she sent out a newsletter to let us know what was going on.  Today I received her first newsletter:

Let me ’splain. No, is take too long. Let me sum up. After nearly four months of searching (open-mindedly, but fruitlessly) for jobs in the United States, and in the Phoenix area in particular, I decided to try something different. To solidify the French I studied in college (and lost a fair bit of during my 2-year stint in Japan), and also to fulfill my longtime dream of living and working in French-speaking Switzerland, I accepted an au pair position in Geneva two weeks before Christmas. I arrived here on January 22, and plan to stay until the middle of December.

I love where I live and—still, most every day I walk outside—whether it’s for a run down to the Old City (past the United Nations and the World Intellectual Property Organization) or to a neighborhood tea room/bakery for coffee with a friend, I can hardly believe I get to live here. The children I care for (a girl of 4, a boy of almost 3, and an 8-month old baby girl) are creative and active, and relatively wellbehaved, and I get along quite well with the parents as well. Also, I learn something new about childraising or housekeeping nearly every day, which—though humbling—is certainly stimulating.

Though we see the sun less than half the time, and it’s already snowed twice in the two weeks since I’ve been here, I don’t find the weather distressing. It’s actually rather refreshing, especially when I’m the first one to make footprints in the snow on a quiet morning. And I find the big chess sets in the park at the Place Neuve even more charming than ever, when dusted with a sugar-coating of white.

Hoping you’re enjoying life’s adventures too, whatever and wherever they happen to be. -Audrey

Rant of the Week: Techno Trail of Dust

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In an age where it’s nearly impossible to keep up with the changing technology, it becomes absolutely critical to the success of many businesses to be the first in the door with a new tool, process, trick…you name it. If you fail to join the technology revolution, you will be left behind with a bronze shield fending of laser guided photon plasma beams.  It is equally important if you are not a pioneer of changing technology to adopt it in order to remain competitive.

Every day thousands of documents are created that need to be verified, signed, stamped with blood. Signed documents make the world go ’round.

Rant #1: E-mail attachments are old news.

Sending messages through e-mail is a great way to quickly communicate a request. Sending attachments through e-mail is a disaster. The initial purpose of e-mail was to carry a very small message electronically to one or multiple recipients. The transport that carries the e-mail could be likened to a Yugo, or more appropriately, a Smart Car. Someone’s brilliance entered the picture (believe me, it seemed brilliant at first) and introduced a way to attach files to the e-mail. Immediately abused, this method, to illustrate it properly, was like attaching a cargo trailer to the hitch of a Smart Car with 50,000 pounds of pewter flatware, dishes, and goblets. To this day, sending attachments is still a horrible way to deliver large files over the internet.

The best way to accomplish sending large files is to create a central location where multiple people can go to retrieve the file at any time. When you send a huge attachment to 20 people in your e-mail list, you’re sending multiple copies, clogging up your outbound e-mail highway, eating up space and time on everyone’s system.

Try changing your way of thinking. Instead of sending the information through e-mail, upload it to your website or a file sharing site. Imagine if Hewlett Packard were to send out drivers for printers in e-mail. It would cost them a fortune and would make the lives of thousands of e-mail server administrators hellish.

Rant #2: Stop Printing What you Can Sign Digitally

Docusign is an absolutely brilliant tool that allows you to send anything you have on your screen through a printer driver to a digital signature website. The recipient clicks a few tabs on the document and the document is stored online permanently for you to access at any time.

Handwritten signatures expose you more than you know.  Did you know that you can scan a document with a hand-written signature, extract the signature using a photo-editing program, and insert that signature on just about any legal document you wish, then pass it off as legitimate?  It’s so easy to do (I’ve never done it, of course.)

Digitally signing a document builds multiple layers of security to prove that the person who signed the document is the person that was actually supposed to sign the document.

Not only will you find it more secure, you’ll also find it saves you time.  One example of how you can utilize Docusign would be in signing a document that was sent to you as an e-mail attachment (yuck.)  Okay, so we’re not going to be able to change over night, but we can get better.  When you receive that document, rather than printing it, signing it, scanning it, and re-attaching it, simply print it to Docusign, mark where it needs to be signed, click to sign it, and download the signed copy.  Then, send that copy to whomever needs it.  It can all be done without leaving the same spot.

It’s time to get with the times.  If you’re unfamiliar with these methods, then you’re already behind, and you might want to consider reading up on what’s what in the world of technology.