This is a conversation between me and my future self, if my financial path wouldn’t have positively forked 2 years ago. The transcript is available here.
What would your future self have to say to you?
Sunday Roundup: Spent weekend
The problem with running a training class for a side hustle is that it sucks up half of my weekend, whenever I hold a class. I like my weekends. Unfortunately for downtime, I like extra money more.
30 Day Project Update
This month, I am trying to do 100 perfect push-ups in a single set. I’m recording each session in a spreadsheet. I am currently up to 50 in a set and 175 in a session, spread across 5 sets. This week, my elbow started hurting, so I took 2 and a half days off.
Weight Loss Update
I am on the Slow Carb Diet. At the end of the month, I’ll see what the results were and decide if it’s worth continuing. For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms. My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils). There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism. The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind. There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.
I’m measuring two metrics, my weight and the total inches of my waist , hips, biceps, and thighs. Between the two, I should have an accurate assessment of my progress.
Weight: I have lost 38 pounds since January 2nd. That’s 2 pound since last week.
Total Inches: I have lost 22.5 inches in the same time frame, down 1.5 inches since last week. My biceps, which are part of this measurement, have grown half an inch each since I started doing push-ups twice a day.
Best Posts
My mother-in-law hates dandelions, with a passion that just isn’t sane. I want to make her a meal that consists of nothing but dandelions.
When I got my first RSA SecureID card, I thought it was the coolest thing ever. If you’ve never had one, it gives you a rotating password that changes every 30 seconds, so nobody can guess you password for long. It was neat, and, apparently, not that secure.
The idea of a tortoise on wheels makes me smile.
I’d like to try to make yogurt. I can try whatever flavors I like. Poptart-and-broccoli yogurt just sounds….
I work really hard to save money on vacations, and this post is full of good ideas to help me do that.
eBay is making changes to their fee structure that will make it a lot cheaper to sell things. I’m guessing the back-the-customer-no-matter-what-at-the-expense-of-the-seller’s-getting-scammed policy was costing them some money.
The big box stores are pushing for Amazon to collect sales tax on all sales, in opposition to a Supreme Court ruling on the topic. It won’t make a difference in sales. Amazon will still be cheaper. And I’ll get a Canadian mail drop.
LRN Timewarp
This is where I review the posts I wrote a year ago. Did you miss them then?
I talked about teaching my kids the joy of delayed gratification. Interestingly, my son has since decided he doesn’t want an XBox 360, because the buy-in is too high, with having to buy games and controllers to match the console. We’ve also changed his allowance to savings ratio. Now, 25% of everything he makes hits his bank account. The rest is his to do with as he sees fit.
Last year at this time, it was scam week here. I wrote a post on debt scams and another on disaster scams.
Carnivals I’ve Rocked and Guest Posts I’ve Rolled
Money Problems: Boosting Your Income was included in the Totally Money Carnival.
Living in Debt: How I Sacrificed My Future was included in the Carnival of Personal Finance.
My post on spendthrift whiners was hosted on Faith and Finance. In return, I hosted his post on paper statement fees.
Thank you! If I missed anyone, please let me know.
Yakezie Blog Swap
Jacob hosted the Yakezie Blog Swap, which is a bunch of bloggers writing on the same topic and sharing the posts with each other. Here is his list of the participants this round.
He wrote about 3 of my financial pet peeves (spending too much money on drinks, financing expensive furniture, and active investing strategies) on Narrow Bridge Finance.
Robert from The College Investor wrote about how people making mistakes with their 401k accounts is a big “no-no” at Thousandaire.Narrow Bridge Finance posted about how people not taking responsibility for their financial actions infuriates him on My Personal Finance Journey.Prairie Eco-Thrifter posted about how sales tax is her biggest financial pet peeve at 101 Centavos.101 Centavos posted about how wasting food makes his blood pressure rise at Prairie Eco-Thrifter.
LaTisha D Styles writes about how greedy banks upset her at Retire by 40.Retire by 40 wrote about how bigger is not necessarily better at FSYA Online.
Bucksome Boomer writes about how advertisers that hide the real price of a product is maddening at The Single Saver.
The Single Saver wrote about parents who do not teach their children financial responsibility at Bucksome Boomer.
Kevin from Thousandaire writes about people having misconceptions about Roth IRA’s at The College Investor.
Time from Faith and Finance vents about financial institutions charging to send paper account statements, but still send out a plethora of paper junk mail at Live Real Now.
Jason from Live Real Now politely rants about how aggravating it is to see people whine about their less-than-ideal financial situations, yet do nothing about it, at Faith and Finance.
Money Sanity vents about people complaining about paying overdraft and bank fees, while at the same time, having no idea how much credit card debt they have or their checking account balance at The Saved Quarter
The Saved Quarter writes about people who are financially irresponsible and want to complain about how broke they are while showing off the new things they bought at Money Sanity
Barb Friedberg talks about how investment advisors that get paid to sell products (more salesman than investment advisors in my book) upset her at Happy Simple Living
Happy Simple Living writes about how companies and people that exploit others aggravate her at Barb Friedberg Personal Finance.
Get More Out of Live Real, Now
There are so many ways you can read and interact with this site.
You can subscribe by RSS and get the posts in your favorite news reader. I prefer Google Reader.
You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.
You can ‘Like’ LRN on Facebook. Facebook gets more use than Google. It can’t hurt to see what you want where you want.
You can follow LRN on Twitter. This comes with some nearly-instant interaction.
You can send me an email, telling me what you liked, what you didn’t like, or what you’d like to see more(or less) of. I promise to reply to any email that isn’t purely spam.
Have a great week!
Carnival Roundup
As of today, my mother-in-law’s house is just about ready. We’ve got some stuff in a couple of the bedrooms to clean out, then it’s time to scrub it all down, paint, and clean the floors. It’s been a long, horrible, emotional summer getting this property ready, but we are definitely at the “light at the end of the tunnel” stage.
This weekend, the renters are going to come over and help wipe it all down. That will be nice.
Live Real, Now was included in the following carnivals recently:
Yakezie Carnival: List of Awesome Finance Articles hosted by Learn Financial Education
Carnival of Retirement hosted by Club Thrifty
Yakezie Carnival: The Less than Graceful Edition hosted by Earth and Money
The Wealth Artisan FinCarn hosted by Wealth Artisan
Carnival of Money Pros hosted by Master the Art of Savings
Carnival of Financial Camaraderie #49 hosted by My University Money
Carnival of Personal Finance #381 hosted by Tie the Money Knot
Yakezie Carnival hosted by I Am 1 Percent
Carnival of Money Pros hosted by Young and Thrifty
Carnival of Financial Camaraderie #50 hosted by Wealthy Turtle
Yakezie Carnival hosted by I Heart Budgets
The Wealth Artisan FinCarn hosted by Wealth Artisan
Carnival of Money Pros hosted by Vanessa’s Money
Carnival of Financial Camaraderie #51 hosted by My University Money
Carnival of Retirement #40 hosted by Term Life Insurance, Inc.
Thanks for including my posts.
Get More Out of Live Real, Now
There are so many ways you can read and interact with this site.
You can subscribe by RSS and get the posts in your favorite news reader. I prefer Google Reader.
You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.
You can ‘Like’ LRN on Facebook. Facebook gets more use than Google. It can’t hurt to see what you want where you want.
You can follow LRN on Twitter. This comes with some nearly-instant interaction.
You can send me an email, telling me what you liked, what you didn’t like, or what you’d like to see more(or less) of. I promise to reply to any email that isn’t purely spam.
Have a great weekend!
Debt Scams
When you are up to your eyeballs in debt, praying for a step-stool, sometimes life–more accurately, con-artists–try to trip you when you are vulnerable and look for a solution. They aren’t muggers on the street. They come at you wearing ties, invite you to a real office, with real furniture and a real nameplate on a real desk. They are a real company, but that doesn’t mean they aren’t trying to scam you out of the little money you have left to put towards your debt.
Yes, I am talking about debt management scams. These scams come in 4 main varieties.
Debt Settlement companies instruct you to stop paying your bills completely and send them the money instead to be placed in a settlement fund. When your creditors get desperate enough, they will be willing to settle for pennies on the dollar.
In theory, this can be a good strategy for some debtors. Unfortunately, it has some drawbacks, even if the company is legitimate. They tend to charge high fees as a percentage of your deposits. Some take another fee when a settlement is accepted. The entire time you are building your settlement fund, your credit rating is sinking, leaving you open to being sued or garnished. The bad companies take the fund and run, while even the good companies can’t guarantee your creditors will play ball.
Ultimately, they aren’t doing anything you can’t easily do yourself. If you want to go the settlement route, stop making your payments and funnel the money into a savings account that you will use to offer settlements from. It takes discipline, but there is no upside to paying someone else for the same function.
Debt Management plans are used when you owe more than you can afford to pay. These companies work with your creditors to adjust interest rates and minimum payments and they try to get some fees waived for you.
A good company will work with you and your creditors to make sure everyone is working together towards the goal of eliminating the debt. A bad company will tell you they are working with your creditors while ignoring any contact from the creditor. They’ll tell you the creditor isn’t willing to negotiate while never stepping up to the negotiation table. Another trick is to offer the creditor a set payment, with a “take it or leave it” clause. Any input from the creditor is interpreted as a refusal to participate. This, coupled with high fees paid by the debtor, make debt management firms a risky proposition. Most states require the firms to be licensed. Check to make sure they are before giving them any information.
Debt/Credit Counseling companies work with you to establish a budget and eliminate expenses; in effect, they are training you to be in control of your finances. They are often organized as a nonprofit, but not always.
Some–the sleazy ones–lie about what they are doing, or attempt to misconstrue what you are agreeing too. Be careful not to use your home as collateral to consolidate unsecured debt and don’t walk into a Chapter 13 bankruptcy without that being your intention. Both of those are common debt counseling scams. If the company isn’t able to provide all of the details of a transaction–company name, address, licensing information–or they aren’t willing to spend as much time as necessary explaining the details of the transaction, walk away. This is your life, you are in charge of it. Don’t let anyone bully or prod you into signing something you aren’t comfortable with.
Credit Repair is almost always a scam. There are ways to get correct bad information removed from your credit report. If the information is correct, those methods are illegal. There are two legal methods to repair your credit. First, stop generating bad credit. Make your payments on time and eventually, the bad items will fall off. Second, write letters disputing the actual incorrect items on your credit report. There are no quick fixes, and anybody telling you different is flirting with a jail sentence, possibly yours.
How do you avoid the scammers?
- Be skeptical. If it looks to good to be true, it probably is. There is no such thing as a magic wand to fix your credit and make your debt disappear. Bankruptcy + 10 years of your life is the closest thing to magic credit repair in this world.
- Only use a legitimate credit counselor. Verify them through the Better Business Bureau and the National Foundation for Credit Counseling (1-800-388-2227 or www.nfcc.org)
- Check the license. Most states require credit and debt counselors to be licensed. If they’re not, run away and report them.
- Read the find print. Don’t sign anything you don’t understand. Like every other piece of your financial life, own the transaction. Know what your are doing, or don’t do it.
- Are they willing to work with you? If they’ve got a generic plan that doesn’t account for your specific situation, they are probably a con. At the very least, they are a worthless company and a waste of both time and money.
- Are they willing to work with your creditors? If not, they won’t be accomplishing anything for you.
- How much do they cost? Higher fees may not be an indicator of a scam, but call around and find out if they are in the right ballpark. Triple or quadruple the going rate is a sign of someone who will disappear late one night, with your hopes, dreams and savings in tow.
- Above all else, trust your gut. If it doesn’t feel right, it probably isn’t. There is nothing a counselor can do that can’t wait a few days while you check them out.
There is no magic bullet to kill debt. You’re not fighting a werewolf, you’re fighting a lifetime of bad or unfortunate choices and circumstances. It’s important to keep a realistic outcome in mind.
Update: This post has been included in the Carnival of Debt Reduction.
How to Build a Business on Cannibalism
Last week, my wife posted on Facebook that she was frustrated with her job hunt.
An hour later, she got a call from someone she hadn’t talked to in 10 years. He wanted to talk about a great business opportunity. He wouldn’t say what it was, but wanted to bring a friend over to discuss it.
Fast forward to last night.
The night my wife agreed to meet with the old friend.
The meeting we forgot about.
So we invited our friend and his friends into the house. We sat down at the dining room table to hear the pitch. Our friend is just getting started so his “friend” delivered the pitch.
While I was waiting for him to explain the business, he was showing us pictures of he and his wife traveling around the country.
Instead of explaining the product, he asked about our most expensive dreams.
Instead of telling us how the marketing worked, he mentioned something about utilizing the internet–and i-Commerce–and talked about changing our buying habits.
Instead of showing us a product, he talked about driving volume and building a team.
There was nothing concrete, but a lot was said to ride on the dreams of people who are frustrated with their income or are living paycheck-to-paycheck.
More than an hour into the presentation, it was revealed that the “product” is a buying portal to allow people to buy Amway products from your personal Amway store.
Freaking Amway.
How do they find your personal Amway store, you ask? I don’t know, because you are supposed to be your own best customer. You make money by buying the products you use anyway, but buy them from Amway. For example, there’s the $10 toothbrush, the $16 baby wipes, or the $38 toilet paper.
For six frickin’ rolls.
Seriously, this stuff is meant to touch my butt once. I don’t need it made from pressed gold.
As for the visual…you’re welcome!
So I sell a kidney to buy enough toilet paper to keep my nether bits clean for a month and I get one point for every $3 I spend. I figure that’s about 50 points per month, given the foot traffic our bathrooms see.
If I hit 100(I think, he didn’t leave the paperwork) points, I get 6%(again, I wasn’t taking notes) back at the end of the next month. For the sake of the math, I’m going to double the number of butts in my house. 100 points means I need to spend $300. That’s 47 rolls of toilet paper. In exchange for this $300–and on top of gold-embroidered silk I now get to flush down the toilet–I’ll earn $18.
I know exactly how much toilet paper I buy right now. Amazon sends me a 48 roll package every other month for $31.42, shipped.
To simplify, Amway is offering me the ability to spend $300 to get $18 plus $31.42 worth of toilet paper. I’m supposed to end my financial worries by turning $300 into $50 every month.
Yay!
[Note to self: Demolish Amway’s business model by starting a company that will let people turn $200 into $50, without the nasty overhead of stocking overpriced crap. A 33% increase in efficiency will make me rich!]
But wait, say the imaginary Amway proponents that I hope aren’t frequenting my site, you’re forgetting the most important part!
Oh really?
There’s also a thing called a “segmented marketing team”. To the rest of the multi-level marketing world, this is known as your downline. If you can con your family and friends into turning their $300 into $50 every month, then help them con their family and friends into turning $300 into $50 every month, you’ll get rich! Amway has apparently figured out a way to share a small fraction of their 600% markup with their victims to make them feel like it’s a business opportunity instead of a robbery.
If I get 9 people in my “business team” and each of them build out their team, I get the coveted title of “Platinum Master” or whatever. All I have to do is sell the souls of 72 people and I can make a ton of money! If each member of my downline turns $300 into $50, Amway will get $18,000. In exchange for delivering those souls, the “average” Platinum Ninja makes about $4500 per month. That’s about $12,000–free and clear–for Amway.
When your business model consists entirely of your sales force doing all of the buying and consuming, it’s not a business model, it’s cannibalism.
Side Hustle: Garage Sale Tips
Garage sale week wasn’t enough. There are so many little things that I did–or meant to do–that I forgot to include them last week.
- Advertise everywhere. I do mean everywhere. Take out an ad in the paper. Put an ad on Craigslist. Have fliers in the grocery store, the laundromat, and any place that has a publicly-accessible bulletin board. Put big, bright signs at every possible turn to get to your sale. Assume the drivers a dense. Don’t give them an opportunity to make a wrong turn or–like I did–put conflicting arrows on different sides of a sign.
- Use bait. Set out tools and furniture where they are visible. Lots of people drive past if they only see knick-knacks. Tools get the men to stop, furniture gets anybody running a household to stop. If you don’t actually have any tools to sell, put your lawnmower out with an insanely high price on it. Heck, if someone wants to pay you 125% of retail for your mower, take it! I had a number of tools and lawn-crafting gear–actually for sale–near the end of the driveway. If I can get the people out of the car, someone will find something worth buying.
- Price it like you’d buy it. People don’t come to garage sales looking for sale prices. They come looking to pay as little as possible. They want the crazy deal. You’ll have to oblige them, at least a bit. Price some things very low, and everything else almost very low. Aim for 25% of retail or less, except for a few special items that you won’t mind keeping.
- Don’t be afraid to say no. Some hagglers are jerks. If the offer is insulting, don’t feel obligated to take it.
- Bag the little stuff. Instead of pricing every toy 10 cents, put a handful of toys is a zip-lock bag for a dollar. Mix some of the bad with the good so the crap goes away, too. Reject every offer to open the bag and sell the stuff separately.
- Put the bags of toys on a table in the driveway. Kids stay out of the confined garage and entertain themselves digging. Kids are clumsy. They can’t break your lamp if the don’t come near it. Parents will welcome something to keep their little brats occupied while they shop. It’s a win for everyone!
- Describe anything that isn’t obvious. Make a lot of signs. To be clear, make a lot of signs. Describe the furniture. Show a current ebay auction for the item. Identify the antiques. You don’t want to be forced to sell everything yourself. Let the signs sell for you.
- Start early. Price and sort your stuff a month in advance. The night before the sale, all you want to have to do is set up tables and unbox your stuff. Don’t try pricing it then.
- Multi-day sales are best. It gives people a chance to tell their friends about it, or to come back and buy the thing they passed up. Don’t lose out on the buzz!
- Save your grocery bags. A few weeks before a sale, I go to the grocery store and ask if they mind if a bundle of plastic bags goes home with me. The manager has always said it’s okay. If that doesn’t work, just double bag your groceries and save the bags for a few weeks.
- Use blankets and tarps to hide anything that isn’t for sale. People will ask about everything they can see. Save yourself the hassle.
- Plan your layout to let people browse and move. You don’t want a traffic jam in the garage. Give it a clear flow, with enough room for people to pass each other comfortably. Three people should be able to pass each other in every row. It’s not always possible, but try. If two people can’t pass, start over.
- Clean your stuff. Clean items sell better. Dirty stuff will have to be sold for at least 25% less than clean stuff.
That’s it for now. More to come, I’m sure.
Note: The entire series is contained in the Garage Sale Manual on the sidebar.
Update: This post has been included in the Money Hacks Carnival.
