Debt and Savings Another Big Difference

It dawned on me after reviewing my post on I’m Not Paying My Debt, but I am Saving Money that while Savings and Investing have some attractive points to them (i.e. much more glamorous to say you are saving than paying off debt), debt has a few very specific traits associated with it that cannot be ignored:

  1. Debt never goes away all by itself, you must make payments on a debt for it to disappear (unless it is a family debt where someone is kind enough to forgive the debt).
  2. Debt grows no matter how good or bad the economy is, in fact it may even grow faster in a growing economy (if interest rates go up). Debt growth without servicing it is inevitable, and can be quite explosive.
It just all adds up don't it?

It just all adds up don’t it?

This is in contrast to savings and investments:

  1. Investments and savings can disappear like a fart in the wind, given some bad circumstances. Savings maybe not as volatile (although the folks with Savings accounts in the Savings & Loans in the 80’s might disagree), but any money that is invested can lose it’s value.
  2. Growth of your investments or savings is not guaranteed (unless you buy a GIC, I suppose), in fact when you invest you sign documents saying that you realize this is the case.

Isn’t that interesting, so the sure thing to invest in is to pay down your debt, since you know pretty much how much you will save by having your debt paid off, and this is the only way to make it go away.

Yes I know I am being overly simple in my arguments, but something to keep in mind if you are wondering whether you should save money or pay down debt.

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Success Sells

A favorite read of mine is The Pessimist blog, and this week they have a very interesting philosophical statement, which is nothing says Success like selling your “secrets of success” . The heart of the concept is that being over-confident in your own skills makes you seem much more successful (according to Forbes, the Kardashian effect). If you are a shameless self-promoter and over confident you will be successful (or at least appear to be successful).

success sells

After reading over many different posts lately for a lot of reasons (not just for the Carnival of Personal Finance), and I tend to agree with the concept that: Shtick seems to overrule Skill™.

I realize that most Leaders have a degree of Chutzpah or Brashness in them, but the number of “get rich quick” schemes out there clearly out strips the money to be made from them (except for the person selling the Get Rich Quick scheme).

How Do I Make Millions?

So the implication seems to be that you:

  1. Claim to be a financial Success
  2. Create a “methodology” about how you became “successful”
  3. Whore, shill, and sell this until the cows come home (with the correct legaleze disclaiming any claims that it actually works)
  4. Wait for the money to roll in
  5. Success!

Success is the result of this function, not the catalyst. Stay tuned I’ll need to start marketing: The BCM Make a Million Bucks as a Personal Finance Blogger™.

 

 

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And the Horse You Rode in On

This is an expression my Father on occasion used to describe someone claiming they could not help you (what is more, they don’t want to help you). The actual expression is “Screw You, and the horse you rode in on“. The shortened version (“And the horse you rode in on”) is much more palatable in polite circles, though.

I had one of these experiences yesterday, talking to a very nice young woman from Rogers. I noted (in this conversation) that Rogers is offering a $10 “unlimited internet” option on their new bundles program, so I figured I’d call to ask whether I (a valued customer of many years (IMHO)), could avail myself of this self-same program.

No, no, no! Your Horse, not your Zebra!

No, no, no! Your Horse, not your Zebra!

The young woman while very sympathetic said that the deal was only available if I added my Home Phone to my Rogers bundle (however if I wanted to add it to my existing package that would cost an extra $30 a month). I mentioned Customer Retention more than once, hoping she might take the hint, however, she finally said, “they most likely won’t want to talk to you about this”.

In my humble view of Customer Service this is the same as saying, “Screw You, and the horse you rode in on” to a customer. I finally asked her to please connect me to customer retention, and she warned me again, but did try to see if they might talk to me.

Did she actually talk to them? Not sure, however she did finally come back and say, “Your current deal with the Internet is all they can do for you, so they don’t wish to talk to you”. I thanked the young woman for her help, but as a last question I asked what the penalty was for breaking my “great deal” early with Rogers, as I do have Bell beating down my door about their Fibe Program. She said it was $20 a month and the deal is until August 2014, I did a quick calculation and said, “…so about $260 to break this deal? OK, thank you.”

There are Consequences No Matter What the Response

While I understand the message that I already have a good deal, and shouldn’t ask for more, responding to a customer with, “I won’t talk to you”, is really a slap in the face to anyone. Having someone from “Customer Retention” deliver this message would have been much more palatable.  I would have felt less annoyed by the response.

Did I expect to get this deal? Unless I asked I knew the answer was no, so I asked, however, answering, “No and go away!” is a bit more than I expected. Am I saying Rogers is being unreasonable not offering me this deal? Absolutely not, it is within their prerogative not to give me any more deals. My issue is with how the message was delivered. Even unreasonable, needy customers must be treated with a level of respect by giving them a clear and polite response (even if the response is no).

In the end, I left Rogers, mostly due to this call.

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Why are there So Many Things to Worry about at 2 AM?

Why are there so many things to worry about at 2 AM,  actually sprang out of a conversation I was having with my Mother. A family trait is to worry about every and all things in life (to the chagrin of our spouses), my claim is it is a genetic thing, but my guess is it is a learned trait (i.e. watching my Mother fret taught me that character trait).

The worst part of this compulsion is that if you wake up in the middle of the night (and worry can cause this all by itself), suddenly your mind will start the worry mantra all over. The amount of sleep I have lost by worrying in the middle of the night I am sure is shortening my life (it is shortening my sleep, that is for sure).

I am envious of those of you out there who are poo-poo’ing this and saying, “… why worry, it isn’t worth it…” or “… I have nothing to worry about…”, and I hope you are right, because in my life the list of things to worry about is very close to the definition of 1 divided by zero (i.e. infinite).

Mr. Worry, a very apropos story (From Amazon)

What do I worry about? Well you might ask:

  • Will I have enough money to retire?
    This is not really something that keeps me awake, but it is an excellent catalyst to start the worry cycle, because then my mind is thinking about money, and thus many other money related topics can appear.
  • How am I going to get out of debt?
    You think I rant about debt because I am somehow speaking from a point of leadership? Hell no! Sometimes my rants are as much aimed at myself as at you good reader.
  •  Health Issues
    I am over 50 and once that happens your health becomes worrisome. If you’ve had a health scare (which I have) and have enough of your joints that are wearing away (again like me), your health can create angst.
  •  The Job
    This one, not so much any more, but for anyone who has been laid off, and had a hard time finding another job, career and job issues can cause no end of topics to keep you awake at night.

For anyone about to prescribe antidepressants or suggest counseling  buzz off (I mean that with the greatest of respect). I’ll live with my inner demons, they are controllable, and at times can be useful motivation to get off my ass and do something, however, I do wish I had not learned How to Worry .

Luckily there is a very helpful bit of advice from the late Zero Mostel (on the Muppet Show). Evidently I must count and compel my things to worry about at 2 AM , and then I can quickly dispel them.

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Pay Day Loans are Crack Cocaine of Personal Finances

I said it! I meant it! Pay Day Loans are predatory short term, high interest rate loans designed to entrap their customers in a financial death spiral.

Yup, if you look down the side of this post, you will find ads for Payday Loans, for that I apologize, I need to look into Adsense on how to turn those off, but yes, Pay Day Loans are the Financial Equivalent of Crack to your finances.

I have no idea how Crack feels, and I do not wish to ever learn (I have much the same view on Pay Day Loans too), however, prevailing opinions is that Crack is highly addictive, and it’s high diminishes over time so you have to use it more but you still don’t ever reach that initial high, much like a Pay Day Loan. Pay Day Loans are highly financially addictive, and once you start using them, your financial well-being goes down hill quickly, and they are hard to kick as a habit.

Pay Day loans are modern day loan sharks
Modern Day Loan Sharks

Why am I bitching about this still? Where I live in Ottawa is a relatively affluent area (although it does have a food bank), but it has more than a few Cheque Cashing/Pay Day Loan “stores”. All I can ask is What the Hell is Going on?

Interest rates are ridiculously low and these places are spreading faster than the black death in the middle ages, what happens when interest rates start going up? There are more regulations on these places, but I just don’t understand why there are so damn many of them.

Please feel free to comment on this (any comments about how I am a hypocrite for having ads on my site for these parasites, expect a colourful reply, but take your arguments to Google for allowing them to advertise) topic, and any insight as to why they are multiplying in a Fibonacci sequence would be helpful too.

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