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Trust no one in this world… with your cash

I am paraphrasing from Conan the Barbarian, where Conan’s Dad teaches him about life:

Conan’s Father: For no one – no one in this world can you trust. Not men, not women, not beasts. This you can trust (pointing to his sword)

After yesterday’s spirited Guest Post (thanks Barry), I found this in my archive of unfinished articles (I have about 80 of them which vary from a title to a completed article, that I just don’t like the wording), and it does bring up an interesting point that Barry brought forward.

The Joker: And now, folks, it’s time for “Who do you trust!” Hubba, hubba, hubba! Money, money, money! Who do you trust? Me? I’m giving away free money. And where is the Batman? HE’S AT HOME WASHING HIS TIGHTS!

I think the Joker makes an interesting point there, who do you trust?

Are you sure you should trust them with your money? I am astounded to hear the blind faith some friends have placed in “their money guy”, now some have been paid back handsomely for their faith, but many have learned what Conan’s Father was teaching (trust only in steel).

After the rash of “experts” (for lack of a better title) who have ruined their clients through criminal activities (i.e. Ponzi schemes) or incompetency, you should always have skepticism when you are dealing with money experts (even bloggers).

Any expert who doesn’t like you asking questions about how they work, isn’t really worth having (in my opinion). I have read about many interesting cases at the Investment Industry Regulatory Organization of Canada, web site.  You can sign up to read about some of their inquiries, and rulings (there are many very interesting cases to hear about).

I think Conan had it right when it comes to money, Trust only in Steel!

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Lack of Debt Buys Happiness ?

Another oldie but goodie on Money not being the root of all evil (DEBT is). Thus lack of debt must assuredly make you happy?

My real opinion on the money and happiness  thing is:

Lack of Debt makes you VERY happy

The Melancholy of Debt
The Melancholy of Debt

Now you might think that is the exact same thing as “Money can buy happiness”, but no, not at all (in my estimation). Money buying happiness is sort of the diametric opposite of my pithy concept, since buying things is where DEBT (BOO!) comes from (well buying and not paying for it). I suppose if you had enough money to pay for all your things and stay out of debt, you could be VERY happy, but my guess is there are not that many folks out there like that.

Think of it, every time you look at your pay stub (if you are out of debt), most (if not all) of that money is yours. You have to pay your monthly bills, but you don’t have to then take what is left and figure out how to service your debt, you can instead plan on how to save it (the opposite of servicing the debt). How can this not make you happy?

No, I am not saying that all folks who are out of debt are happy (people can find ways to be miserable no matter what their circumstance), but I am saying you have one less thing to make you UNhappy, if you are out of debt.

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The Problem with Some Folks Who Are in Debt

First, let me preface this with the following soothing words: If you are in debt, you should ask for help if you feel you are drowning and you have nowhere to turn. There are many good community based help groups for your debt issues, so there is help for you, and if you feel you are at wit’s end, ask for help (i.e. this post is not about you).

Don’t be a Debt Dandy

I am lucky to be a financially comfortable person (relatively speaking). I am by no means rich like many of my other blogger brethren, however, I am OK financially. My debt load is high, but it is manageable and I have a good job which pays reasonably well.

I do however have many acquaintances and friends (who make a great deal more than I do, since most of them have Dual Incomes). They are constantly harping on about how they have no money and how far in debt they are.

Let me give you a quick scenario which happened recently where an acquaintance was out to lunch, and started whining about how his credit card debt is so high, and it’s going to be really hard to go on vacation with his family this summer. He and his wife just felt that between the car payments, and day care costs it was just getting too much.

Typical Debt Dandy types

I’ll give you a second to read that one over again, just to get the gist of why I might be mildly irked, or peeved about the statement.

What is My Problem?

Let me dissect this simple scenario and why I wanted to stab this acquaintance with a spoon (because it would hurt more!):

  1. This acquaintance has a wife who also works in a similar job, and thus his family income is effectively twice mine
  2. We were sitting in a nice restaurant eating lunch (which was going to cost around $30 or so)
  3. He paid with his credit card
  4. There was still going to be a family vacation to a cottage, but just not a nice vacation somewhere down south with a hotel
  5. Same acquaintance “refreshes” their cars every year or two because they don’t like older cars, and they lease all of their cars

If you have twice my income and you complain you don’t have money, you really need help financially. Unless you are sending your income to your family “back home”, supporting a disabled family member or are attempting to recover from a financial catastrophe which left you in dire financial straits, you really have no real reason to be complaining you have no money (or more specifically you don’t have enough money).

What Causes These Problems?

If you are having problems with your cash flow and you are spending too much, stop eating in restaurants.

If you have a massive credit card debt, stop using your credit cards (completely). Do the Gail Vaz-Oxlade money jars thing, put your credit cards in the freezer, or whatever, but simply stop using your credit cards. You can’t fill a hole in that you are continuing to dig at the same time.

Vacation? What the hell is that? Mrs. C8j (my sainted wife) hasn’t been on a descent vacation (with me) for 18 years! Are we complaining? YES, but that is for another time. If you are having financial problems, vacations are the first thing to go.

Leasing cars? Replacing your car every two years? I won’t go into the numbers but you are just burning money for the sake of having a nice car (which evidently is an important part of your self-esteem I hear (I drive an 8 year old Corolla, which better last another 3 years at least, for reference purposes)).

If you think Day Care costs a lot, why doesn’t one of you two cut back your hours? Do the math, how much is this all costing to put kids in Day Care, and “Do the Work Thing”, you might find you are actually in a losing position financially.

My Opinions on Debt Dandies

Sorry, I haven’t ranted much lately about this kind of stuff . No this isn’t one single person it’s a conglomeration of a few acquaintances. I am sure we all have friends like this too.

Oh and to clarify the title of this post:

The problem with some folks who are in debt, is that they won’t shut up about it. They wear debt as a red badge of courage to brag about how badly off they are. This is their own fault, and if they just did something about it, they wouldn’t have these problems.

Don’t BITCH about it, DO something about it!

(or start your own blog and complain about it there)

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Bruised Credit and Nicefications

Yet another fun bit of phraseology from the folks who want to lend you money at a higher rate, because your credit rating might not be AAA (or even C-). I heard bruised credit used in a radio commercial here in Ottawa. I assume this is going to be one of the new nice ways to describe folks with bad credit.

The sarcastic side of me thought out loud when I heard the phrase, “When did your credit rating become like a banana or apple?”. Why is there a need to dumb down and nicefy the concept of bad credit? What is next, people who have been convicted of impaired driving being described as Reformed Dreamy Drivers?

A real Bruise on L’il C8j’s Head! Doesn’t look like it has anything to do with Credit, now does it?

Someone in the advertising world has figured out that no one wants to run ads that say, “If your credit stinks” or “if your credit has been turned down”. If they nicefy the whole thing, radio and TV folks won’t feel as awkward running the ads .

If you have had credit problems, or have had a rough patch financially (or as I might say, You Screwed up Financially) it is going to be harder to get credit.  The rate of interest you will end up with is not going to be very good. It will be good for the lender, but that is because you are a Risk to them.

These badly written sentences explain why you can’t get cheap loans with bad credit ratings.

Bruised Credit ?

What’s with all this nicefication that is going on these days? You can’t say someone Screwed Up. You can’t say someone made a mistake and you mustn’t ask nasty questions like “Why did you screw up?”. Embarrassment is a great motivator for me to not screw up again, maybe for others, there is a need to be much nicer, I suppose.

Yes, feel free to point out how adding fications to a word doesn’t make it a word. I actually meant to use the term that George Carlin made famous, however, I will keep this at a Suitable For Work level, however if you wish to see the NSFW George Carlin Clip that explains the term, there it was.

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Why is it Taking So Long (Debt reduction)

One of the more interesting analogies I like making is that Weight Loss and Debt Reduction have a great deal in common. They are both are very hard for a lot of folks to succeed. Simply answering the question, “Why is it taking so long” is not easy.

If you have put on a lot of weight over time, it is hard to figure out how to lose it again. The same thing happens with debt.  It is rare that someone suddenly finds themselves in debt. It takes a while to build up a lot of debt to the point where you get upset about it.

A more interesting way to look at this is that losing weight and reducing debt both take a long time. However, your progress with both are actually (usually) quite different.

If you try to lose weight and find a successful way to do it (via exercise, diet or a combination of those), typically you lose weight quicker at the start of the process than you do as you approach your ideal (or goal) weight. If you are trying to lose a lot of weight this is actually even more obvious, but this is what I have seen when I have lost weight as well.

Simplified Graph to show how weight and debt reduction take different paths to the same end point

Why is it Taking so Long ?

With Debt Reduction, getting instant gratification is a lot harder to do.  If you are attempting to pay down debt and you are close to living “pay cheque to pay cheque”, finding that extra cash to pay it down is a lot harder.  At the start of your debt reduction plan, your debt will not be dropping quickly. However, if you persevere and remain constant with the money you are paying your debts down with (if not increasing it a little), you will actually start paying down debt at a much faster rate. This portion of most reduction schemes must be one of the reasons folks abandon their debt pay down plans. The frustration with why it is taking so long.

I still think losing weight and Debt reduction are both really hard to do. I am saying that if you are trying to reduce your debt, keep in mind that at the start of your process you may get frustrated, but if you stay with it things should get better quickly. There is a reason it is taking so long.

Most things that take a while to do, are worth completing.

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