Tuesday, October 4, 2011

Replying to an email:

I received an email from my cousin Ron today.  In it he tells us about is son being part of the protests that sprang from the Occupy Wall Street group in New York.  I had this to say in response:

Actually, Ron, the TEA Party movement will be a far more effective means to bring about real change back to the smaller government, lower taxes and greater freedom that our Founding Fathers intended.  It’s great that Max is getting involved.  Just be sure that it’s Constitutionally limited government and the freedom to engage in entrepreneurial endeavors that your are fighting for – not Marxist/socialism and big government provided free ice cream.  The wish list of ‘rights’ being demanded by the group in New York would make a limited government activist’s head spin!  Among other things that they are claiming as a ‘right’ they are demanding a “free college education” and “a guaranteed wage for life” regardless of whether or not they actually do anything to earn either. 

Google their website for more details. 

I agree that everyone has a right to educate themselves and to earn a fair wage.  But that wage must be earned!  There is no ‘right’ to receive free stuff.  Not from the government, nor from the citizens directly.  The government has NOTHING to give without first taking it from someone else!


“Any government big enough to give you anything you want
Is big enough to take everything you have.” – Thomas Jefferson

The REAL problems we are having as a nation today trace their roots back to the early years of the twentieth century.  The Rockefellers and the Vanderbilts and their cronies had a problem.  They needed workers for their factories.  So they created a government run factory to manufacture factory workers.  It was, and still is, called the Board of Education.  This started out as a quasi-governmental agency to establish standards and practices for our nation’s schools.  Our school system is purposefully designed, not to educate a nation of free thinking entrepreneurs, but to indoctrinate our youth to do what they are told when they are told the way they are told and not to question why. 

When the fire alarm goes off the right thing to do is

But instead all of the little kiddies are conditioned to first move in an orderly fashion to the isle between their desks and get in line in order of height – Hey! No fooling around! And stop poking Jimmy in the ribs! We’re not moving until all of you are behaving! – They are only allowed to exit the room after the teacher instructs them to.  From the time they are in preschool all the way through high school it is the same.  Do the lesson I give you the way I tell you when I tell you and don’t you dare color outside the lines.  That way when you get your job in the factory you will already be used to doing what the foreman tells you the way the foreman tells you when the foreman tells you.  Factory workers who think up a better way to do things for themselves screw up the production schedule.

The kids who make it to collage face much the same thing only now they are being trained either to be managers, accountants, engineers or other specialists.  I know of no program you can take in any of our schools that will actually teach you to be a successful entrepreneur.  The Rockefellers and the Vanderbilts didn’t want that curriculum to reach us ‘regular folks’ because that would have enabled us to become their competition.  Better to condition the masses with the mantra “Get a good education so you can get a safe secure job with good pay and benefits then you’ll be set for life.”

Until the factory closes and the town dries up… 

You need look no farther than Berlin New Hampshire for a classic example of that.  There isn’t a single entrepreneur among all the laid off factory workers there who’s come up with anything else to replace the now closed mill.

As for credit card debt:

If you find yourself in a hole the first thing you need to do in order to get out of it is STOP DIGGING! 

Being saddled with a 30% interest rate is the result of one of two things.  Either you didn’t make the minimum payment by the due date and got hit with the penalty interest rate, or you didn’t read the details of the offer before you signed up. 

What the credit card companies don’t want you to know is that it is often possible to negotiate a lower interest rate. 

Call their 800 number.  When you finally get a human on the phone (this in itself can be a challenge) ask to speak to someone in the Customer Retention Department.  Once you have them on the line ask if the person you are talking to has the power to lower your interest rate.  If not ask to speak to someone who can.  Once you get a real decision maker on the phone explain that you are trying to improve your credit situation and to get your payments under control.  Ask them to lower your interest rate.  It may help to mention a competitor’s offer of a significantly lower rate and to say that you’d really like to stay with them but the interest rate you are being charged, if not reduced, will make you jump ship.  Their job is to keep you as a customer.  That’s why you asked for this department in the first place!  While you’re at it ask them to lower your monthly minimum payment.  This will make it take longer to pay off the full balance – if that’s all you pay – but it will also give you some breathing room.

Do this for all of your cards.

Be sure you continue to make the minimum payments on all of your cards!

Now take the total of the cash* you are saving from all of your lowered payments and put that toward either the card that has the highest interest rate – or the card that can be paid off the fastest.  I like that second option because it lets you see real progress in the shortest amount of time.  Make the minimum payment AND make an additional payment on principal on that card with the rest of the cash you are saving from your lowered payments.  Continue to do that every month until the card is paid off.  You will be amazed how fast that will be!

Keep in mind that you are not paying any more than you were before.  You are just allocating that cash in a much more effective way.

Now that the first card is paid off, take what was the payment on that card plus the ‘jump start’ payment and add that as the payment on principal to the next card in line.  When that card is paid off take the total that you were paying on that card, which includes what you rolled over from your payments on the first card, and use that as the payment on principal every month on the next card.

The snowball effect really works!

And while you are doing this DON’T MAKE ANY MORE PURCHASES ON YOUR CARDS!  You don’t need to cut them up.  It would be better to put them in a Tupperware bowl filled with water and stick ‘em in the freezer!  It won’t hurt the cards and if you have a crisis and need to use one of them you can always thaw them out to get at them.  But you have to take that deliberate step of thawing them before you can use them.

And don’t close the accounts!  (Unless there is a ridiculous annual fee…  And this, too, can possibly be negotiated away with the Retention Department.)  As soon as you close a credit account all of your payment history evaporates off of your credit report as if you never had the credit card that you’ve worked so hard to pay off.  You will need that credit history if you are going to finance your next entrepreneurial endeavor.

Now as for the greedy evil big business on Wall Street – Bank of America and their $5 a month fee for the privilege of using your ATM card as one example – don’t do business with them.  A local bank or better still a local credit union will be a much better business partner and won’t have a lot of the procedural embezzlement fees that the big banks have.  If the bank you are doing business with contracts a case of ‘big bankitis’ ditch them and move to another bank.  I’ve done that several times myself.  It’s a PITA, but it’s the only way these institutions really learn what their customers will put up with – and what they won’t.

“… accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed.”

That was true when it was written back in 1776 and it is still true today.  Demanding free stuff from the government and that more limits be placed on business will not fix all that is wrong with our society today.  Reigning in the government and revamping our education system to teach entrepreneurialism are the only real long term solutions.

It is up to us as individuals to take care of ourselves.  We the People are not wards of the state!

* I use the term “cash” instead of “money” because there is no real money left in a world flooded with fiat currency.  But that is a subject for another time.

No comments: