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Saturday, December 27, 2008

Total Christmas Spending for 2008: $3.20

KB Toys: Out of BusinessI don't like KB Toys. There's one in my local mall, and whenever I would go in there with my daughter, she would want to play with everything. She's five, and that's what five-year-olds do. In other toy stores, kids play with everything, and the employees / managers don't care, which is the way it's supposed to be. In KB, however, my daughter would play with stuff, and within five minutes the manager would walk by and give me a stern look like, "hey, buy something you deadbeat! Your daughter needs to stop playing and start buying!" Needless to say, I never opened my wallet in that store. Even if that grumpy manager turned into Snow White, I doubt I would have ever spent money there: the prices at KB have never been competitive.

My daughter spent Christmas Day with her mother. When I called to wish her a merry Christmas, I promised that we would go shopping when I picked her up for her usual every-other-Saturday visit; I told her that she could pick out a present for herself. She was very pleased with my plan, and I was pleased about the prospect of taking advantage of after-Christmas sales.

So, earlier today, we visited the local mall and started window shopping. When we reached the KB Toy store, she tugged at my hand to signal that she wanted to go in; she also added, "Daddy, it's a going-out-of-business sale. Let's check it out!" I was surprised and delighted that she understood the significance of a going-out-of-business sale; could it be that she understood that a going-out-of-business sale meant that her raison d'etre -- toys -- could be obtained at a great price? Does she really understand value? I asked her, "why is a going-out-of-business sale a good thing?"

"Because, Daddy, they're going out of business," she replied in a very frank manner.

Oh well. I tried to explain why it was a good thing, but I don't think any of it registered. She was already locked into full toy shopping mode.

We browsed the isles a few times. Most of the store shelves looked like a tornado had hit them. There were plenty of employees around so there was really no excuse for the mess. Then again, how could I expect them to care when they all knew that KB was about to close its doors forever? Bottom line: I believe in professionalism, right up to the very end. If I was forced to go out of business, I would provide my clients or customers the best products or services until the last second of my business's existence.Noisy machine gun: $2.99

My daughter eventually ended up with two items in her clutches: a very cheesy replica of a star wars light saber ($2.99 after 50% off), and a plastic machine gun that makes lots of noise but doesn't fire anything (also $2.99 after 50% off.) I told her to choose one and she chose the gun (pictured.) I handed her some cash to pay the cashier (she really likes handling such transactions) and we were on our way.

Some people might think it strange to buy a toy gun for a five-year-old girl. But what does it matter? If that's what she wants, then why not? She likes playing with toy guns, but she also like playing with baby dolls and other "girly" toys. Her mother doesn't like her playing with toy guns, so I suggested to my daughter that she keep her new toy at Daddy's house, and that we keep the toy as our little secret.

My daughter has been asking for a Nintendo DS handheld gaming system for a long time, but it's too expensive considering that she would either break it, lose it or fall out of love with it in no time. I was seriously considering buying her one of those battery-powered cars that we sometimes see in the park. Too expensive for my current financial status, but I knew she wouldn't lose it or lose interest in it, and I'd be with her every time she played with it, so I was thinking it could be worth the (gulp) credit card purchase. I was also highly motivated by a very embarrassing and excruciatingly ignominious (for me anyway) episode from my daughter's life in which she chased a young boy -- a complete stranger -- who owned one of these cars (similar to the one pictured below) and was having a ball with it in a grassy field next to the jungle gym at our favorite park. My clueless daughter decided that it would be a good idea to run alongside this car and plead for the driver to stop so that she could join him in his fancy ride (it was a tiny Cadillac.)
battery-powered car for kids
He didn't stop.

It had been an easy, fun and sun-drenched fall day in the park until I had to chase my daughter down, pull her away from that bewitching situation and give her a lesson in dignity.

I will buy her a similar car as soon as the weather warms up. She's a good kid and she deserves it. Would Suze Orman approve? No way! If I was a guest on her show I'm certain my plan to buy my #1 girl a $250 car would be met with a resounding DENIED! But that's TV, and I live my life according to my own philosophies (and Suze has no kids, so how can I expect her to relate?) Yes, this recession has hit my business hard, but I'm not broke, and I have a lot of confidence in my strategy to increase my income during 2009. For me, striving for a picture-perfect financial profile is important, but it's not my top priority. Childhood years should be fun and full of happiness. Over the years, I've noticed that the well balanced, well adjusted adults I've come to come to know well all had one thing in common: a happy childhood. Does a $250, battery-powered car = childhood happiness? Of course not! But I know my daughter quite well, and I'm quite certain it's a gift that she would really enjoy. Besides, I like the idea of keeping her busy with something that I can easily keep my eye on (I'll buy one with loud, obnoxious colors) while I sit on a park bench and listen to Marketplace on my portable radio.

So, all in all, it was a good day. We spent the rest of the day at Dave & Busters playing skee ball, air hockey, pool and other games. I am glad I spent less than $5 on my daughter this Christmas. No, not because I'm stingy. It's because I was able to buy my daughter a present that made her happy, and her contentment had nothing to do with how much it cost. I will buy her that car when spring arrives, not because it's Christmas or her birthday. I'll buy it for no other reason than I like to see my daughter happy. That's a good enough reason, isn't it?

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Friday, November 28, 2008

This Is A “Fill In The Blanks” Financial Crisis. Now It’s Time To Fill In Your Blanks.

The Great BailoutIn the following article, we invite you to just fill in the blanks where you see parentheses. Fill in each blank with any old Bank and see what you get:


Banks Have Their Backs Covered. Who’s Got Yours?

On [just pick a date], the Federal Reserve, the US Treasury, the US President, and Congress agreed to give [Big Name Bank] 300 [Billions or Trillions, take your pick] Dollars in tax payer money, so [Big Name Bank] could buy [Bank About to Fail] for 1 Billion. For those who didn’t know, [Bank About to Fail], one of Wall Streets largest and best known investment bank was bankrupt. [Bank About to Fail] owed more debt than it had in value. Sounds familiar. Kinda' sounds like many people in Foreclosure. Actually, it also sounds like many homeowners not in foreclosure, who have a mortgage loan greater than the value of their home. Just like many ordinary people who have more debt than cash. But I digress. [Bank About to Fail] was in financial trouble because they were worth nothing on paper. So we heard in the news “[Bank About to Fail] must be saved.” Why? “Because if [Bank About to Fail] went under than the whole financial system could have fallen apart. “COULD HAVE”. The stock market “would have” plunged. Big investors “would have” lost lot’s of money. There “would have” been a world crises.

Now let’s think about their bailout logic, one more time. This is my take:

First: [Bank About to Fail] was about to file for bankruptcy because…THEY WERE REALLY BANKRUPT!!.

Second: The Federal Reserve, the US Treasury, the US President, and Congress determined that if [Bank About to Fail] does fail we will have a World Wide Financial Crises.

Third: The Federal Reserve, the US Treasury, the US President, and Congress “saves the day” by essentially GIVING [Big Name Bank] [Billions or Trillions, take your pick] of DOLLARS OF TAXPAYER MONEY so [Big Name Bank] could buy [Bank about to Fail] for 1 BILLION.

Fourth: The Federal Reserve, the US Treasury, the US President, Congress, [Big Name Bank], [Bank About to Fail] and All the Kings Men shake hands, hug, pat each other on the back, exclaim “JOB WELL DONE” b/c the WORLD DID NOT DESCEND INTO FINANCIAL CHAOS.

Do you see what just happened? What does it mean?

No# 1 : There are certain people and businesses TOO IMPORTANT to let go Bankrupt even WHEN BANKRUPT.

No# 2 : The Federal Reserve, the US Treasury, the US President, and Congress DO NOT NEED YOUR PERMISSION to give taxpayer money away to a BANKRUPT BUSINESS.

No# 3 : The Threat of a World Wide Financial Crises is a REALLY GOOD EXCUSE.

No# 4 : It doesn’t take a genius to figure out WHO GOT ALL THE MONEY.

No# 5 : The employees of [Bank about to Fail], who saw the value of their IRA’s or pensions drop because their [Bank about to Fail’s] stock tanked, WATCHED their MONEY they PAY IN TAXES given to…Well let’s say it WAS not given to them to SAVE THEIR IRA’s or PENSIONS.

Truth be told, it is entirely possible that had [Bank about to Fail] actually failed, there would have been a financial crises. It is equally true that if [Bank about to Fail] actually failed, there would NOT have been a financial crises. As is everything in life that could have been, WE WILL NEVER KNOW.

So the rules are made and when things get BAD there is only one Sheriff in town and that Sheriff has friends to protect.

This is history repeating itself over and over. DO FOR YOUR FRIENDS AS YOU WOULD DO FOR YOURSELF. There are those who claim that the bail out of [Bank about to Fail] created a “moral hazard” because [EVERY SINGLE BANK] will take even more risks and ask for even more bailouts because the Federal Reserve, the US Treasury, the US President, and Congress will cover their behind.

And cover their behind they have. For the first time in history, the Federal Reserve allowed Wall Street Investment banks to borrow money from the Fed at a discount (window). For the first time in history, investment banks can become commercial banks. For the first time in history, the Federal Reserve, the US Treasury, the US President, and Congress can hand out TRILLIONS OF DOLLARS of YOUR MONEY without telling YOU where it is going.

It doesn’t end there, the Federal Reserve, the US Treasury, the US President, and Congress gave [Big Name Banks] Treasury Bills (your money) in exchange for [Big Name Banks] worthless collateralized paper. YOUR MONEY FOR BAD PAPER. The paper that consists of collateral debt obligations, sub-prime mortgage backed securities, alt-a mortgage backed securities, credit card backed securities, auto loan backed securities…and the BAD PAPER list goes on and on and on…..

It all boils down to one thing. When it all hits the fan, the BIG NAME BANKS’ Peoples get together, handle their business and do what is necessary to keep their stuff together.

The question for you is “Will Your Peoples Come together, When it starts to get BAD”. It’s time to fill in your blanks.

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Wednesday, August 27, 2008

After 9/11 Creditors Told Me, "There's Nothing We Can Do"

My husband worked on the 81st floor of Tower One in the World Trade Center for a company called Network Plus. On September 11th his entire office managed to climb down all 81 flights of stairs and escape just minutes before the buildings started to collapse. His boss guided the entire team of salespeople down and encouraged my husband to continue when he felt tired. At one point my husband’s boss even left the team in order to help carry a woman in a wheelchair down the stairs to safety. Miraculously, she survived as did everyone in my husband’s company. As the highest office to have every member survive, Oprah Winfrey even had them appear on her show.

The ordeal was stressful enough for us to deal with, and after a few weeks passed the company he worked for went out of business. They tried to survive by relocating but the entire city was in such turmoil that the company simply couldn’t make it work. I realized that my husband was the bread winner and I had no idea how we were going to pay for our bills. We had managed to accrue quite a lot of credit card debt and now had only my small teacher’s salary to pay for it all. As the bills continued to pile up I started to make phone calls to the credit card companies with the hopes of working out a payment plan. What ended up happening instead was my filing for Chapter 7 bankruptcy.

Before September 11th I had a credit score of about 650 and had over $10,000 in credit card debt. My payments were always on time and I rarely had any problems. Most of my debt was due to department store credit cards such as Macy’s, Ikea, Express and Spiegel. I also had an electric bill that I couldn’t pay and a cell phone bill which piled up. The interest rates were sky high, over twenty percent for each card and I knew if I didn’t work something out I was going to sink fast. Paired with the late fees I knew it would happen quickly if I didn’t do something fast. The largest amount I owed was to American Express and since they require payment within thirty days they were the first company I called.

To say that American Express is cold-hearted would be a nice way of describing them. I explained to the representatives over numerous phone calls that I wasn’t looking to get out of paying the $2,000 I owed them but that I needed more time than the thirty days. They could care less. They didn’t even sound sympathetic when I spoke to them nor did they seem to care about my situation. As if programmed like a robot, each representative I spoke with said the same thing to me, “there’s nothing we can do”. They would take nothing less than the full amount owed and as long as I didn’t pay it the late fees would continue. The late fees started to add up into the hundreds as November rolled around.

The other department stores sometimes sounded sympathetic when I told them about my situation but could do little to nothing to help me. The representative I spoke to at Spiegel was distraught to hear about my situation and immediately put her manager on the phone. He explained that there was little he could for me except to lower my interest rate from a 22% to a 12%. He waived one late fee for me but gave me no extension.

I found that no one really wanted to do me any favors at all. I explained to each one that I simply needed a two month period during which no late fees or other charges would be given to me. Even when I explained that I would be forced to file for bankruptcy they still gave me the same line – “there’s nothing we can do”.

The only company that helped me out was the bank that issued my student loans. Citibank immediately issued me forbearance for my student loans and gave me no problems whatsoever. They were nice and understanding and were actually the only company that did anything to help me during the difficult time.

My credit score began to plummet as did my credit history. After I filed for bankruptcy in December my score dropped to the low 500’s and stayed there for years. I couldn’t rent an apartment and I had a hard time getting utilities without paying a deposit. The funny thing was that my husband found a new job within months and our income was back where it was before, but none of that mattered when companies looked at my credit report.

Today my credit is back up to a 620 but is still marked with the bankruptcy. If the credit card companies had taken the time to work with me they would’ve had their money and I would’ve kept a clean credit report.

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