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Wednesday, November 30, 2011

Do We Expect Too Much Perfection From Our Politicians?

Looking at all of the flack that Herman Cain has caught for his alleged indiscretions has me asking the question, “Do we expect too much of our political candidates?” I’m not talking about performance. What I’m referring to is the pristine personal lives many want them to follow.

Actually it brings to mind another question as well. Why the hell would anyone want to set himself or herself’ up for such ridiculous scrutiny? I know ego is the main reason but even an egomaniac has to have some limits.

I’m not condoning the behavior that he has been accused of engaging in but with humans being humans, clearly these sorts of things do happen.

I heard a quote a few moments ago that, “We want to elect a virgin to do a hooker’s job”. I love that quote but it really got me to thinking about our voting process.

John Edwards, Gary Hart, Eliot Spitzer, Bill Clinton, Gary Condit, JFK, I mean would go on…and on…and on…and on some more but why bother? Would you prefer to ‘swim’ with a politician that you didn’t care for personally or ‘sink’ with a politician that you liked which would you choose?

In Europe, they find our puritanical values laughable. I guess they just expect a certain amount of human frailty in their political leaders.

Given all the problems that we have facing us in this country is it really that big of an issue if a particular politician had an affair, is gay or has a brain ‘fart’ during a debate?

If a political leader could produce great results but had a messy private life, would it really matter to you at the polls?

Sunday, November 27, 2011

What Works…What Doesn’t

Have you ever just stopped to think about things that should work but don’t?
Sometimes even though we know the stuff doesn’t work, we don’t even give it a second thought. It sucks but that’s just the way it is.

Car Alarms
Do car alarms actually deter theft? Every time I hear one these bad boys go off I run right out to investigate. I’m sure that you do too. I think they are a great invention but unfortunately they are so ubiquitous that they’ve become more of a nuisance than a deterrent.

Krazy glue / Gorilla glue / Super glue
I don’t care what anyone says; this crap does not work.  And yet I still buy it! I’ve seen that picture of the guy being suspended in mid-air by his hard hat. Supposedly one drop of this “wonder glue” keeps him firmly in place. Right. I can’t even get a coffee mug handle to stay glued on.

Mail-in Rebate Coupons
Remember these? You found an advertised store item that you really wanted. Let’s say it was priced at $200 but it was only $150 with the rebate coupon. The problem was that the steps to achieve the rebate were so onerous that the process just pissed people off. That’s why you rarely see them being offered anymore. Or is that just me?

3-D Movies
I’m talking old school 3-D. I haven’t seen Avatar or any other new 3-D movies. I’m sure they’re better than the old fashioned 3-D but what’s next: “Gone with the Wind” 3-D version?

Doberman Pinschers
Remember when these used to be the baddest dogs on the planet? Have they all been retired by pit bulls and Rottweilers? You hardly ever hear of them being used as watchdogs. You know why? I guess they don’t work any more.

Butt-Toning Shoes
Every time I see someone in a pair of these I start cracking up inside. Just because Joe Montana and Kim Kardashian advertised them was no reason to run out and get a pair. Not that there's any deliberate deception involved — walking on these things are like trying to balance on a wobble board. But sometimes it just boils down to another case of a company making claims that it can't back up.

Exhibit A: Reebok was just ordered by the Federal Trade Commission to pay $25 million in refunds for claiming that its "toning" shoes would strengthen and tone the thighs and butts of people who wore them. The FTC also banned the company from making similar claims in future advertisements.

Psychic Hotline
I really don’t need to discuss this one, do I? Remember Miss Cleo?

Cold remedies
Starve a cold, feed a fever. Feed a fever, starve a cold. Mom’s chicken soup. Echinacea.  Zinc supplements. Vitamin C. Antibiotics. Whatever.  I’m sure some of these are effective but let’s not go crazy here. It’s only the common cold, right?

Crash Weight Loss Diets
So if a friend swears that munching on grapefruit gets her into skinny jeans, or a coworker credits “the Twinkie diet” for his trim physique, should you try it too? Diet and exercise isn’t the sexiest option but like so many things in life the least appealing option is the most effective.

Banking Regulators
See mortgage meltdown circa 2008 -2011.

United States Justice Department
See “no one went to prison for the mortgage meltdown circa 2008 -2011.”

What other things can you think of that should work…but don’t?

Friday, November 25, 2011

Some Things In Life Never Made Sense To Me

Some things in life never made sense to me: American Idol, swimming in freezing cold water, women who complain about the seat being left up, and spending the night in a line camped outside of Walmart.

That last one is a most appropriate topic for this morning, otherwise known as Black Friday: the Friday after Thanksgiving.  It also indicates the point at which retailers are “in the black” or making a profit.

Now, I pretty much hate shopping in any form.  The whole camping overnight in chilly winter weather and then scrapping with a bunch of “wild—eyed” competitive shoppers is not my idea of a good time.

Supposedly the economy is lagging and unemployment rates are high so what’s up with all these rabid shoppers?

Every year we hear stories about people getting trampled when the doors open. This years’ top stories are a shooting at a Walmart in San Leandro and an incident of another Walmart shopper in the Los Angeles area pepper spraying other shoppers in an effort to gain an advantage I suspect. 

If it weren’t so sad it would be hilarious.

I always wonder, “What would happen if they gave a sale and no one showed up?” Oh well, that will probably never happen.

So many folks are standing in line hoping to score an ipad, an Xbox game, or perhaps a 50” television for dirt-cheap.  The problem is that I’m certain that each of these stores only has about 4 of each of these products in stock and by the time you get through the doors they will be out of stock of what you wanted.  Now there’s no way you’re going to go home empty-handed.  Enter plan B. You end up buying something else.

The retailers win either way, but what about the customer?

Tuesday, November 22, 2011

7 Steps to Keep Your Business ‘Cash Healthy’

Cash flow is the lifeblood of any business enterprise. It is even more important than profit! Extending credit means taking on risk. There is no way to avoid it. In your efforts to grow your business consider what an acceptable level of bad debt would be. That’s right. Trying to avoid any bad debt will most likely actually limit your sales potential.  Here’s how to reap the best of both worlds:

Step #1: Make it a habit to contact your customers as soon as their invoices are coming due.  Just ask if you can receive a pay schedule.  It’s totally expected and the accounts payable department will likely have your invoice already scheduled for payment.  Of course, you will run into the old, “We don’t have a copy of your invoice.”  Be prepared to submit another copy ASAP. Hoping that a late payer will “get religion” and clean up past due balances happens rarely, not often enough to rely on; especially in a challenging economy.

Step #2: Avoid extending more favorable terms to a friend of the CEO.  My attitude on this scenario is that if the boss wants the transaction done like that, then fine. But I would make sure to get his or her signature approving those special terms. In addition, keep that signed copy for yourself ask backup just to make sure that it doesn’t “disappear”.  If it’s for your own company be sure to handle the account in a professional, businesslike manner. If your friend or relative can’t understand why you insist on following protocol, you’re probably better off walking away from the deal. You must establish credible ground rules up front to avoid disaster down the road.

Step #3: Maintain documentary proof of the debt. Believe me, you will have customers that claim they don’t owe you any money, or that they only owe a portion of the outstanding balance.  Hold onto purchase orders received (and signed) from the customer, signed quote letters, packing lists, proof of delivery, email communications, everything and anything that provides backup to the fact that service has been rendered as stated.

Step #4: Always get as much credit information as possible from your customer while you are completing the initial sale. When the customer is hot for your product or service they are much more willing to provide information that they might hesitate to give you later on.  You can also avoid hearing, “You didn’t need that on all the other orders!” as well.  Besides, you  can never have too much information if and when an account goes south. Structure your credit application to secure the data you need.

Step #5: Establish a system for determining when to place delinquent accounts for collection.  I had a manager that insisted we work our accounts to the ‘nth’ degree before referring them out for collection. That makes complete sense. When we referred accounts out to a third party for collection, it was rare that they collected a substantial amount of what we placed. Whatever your process before referring accounts, work it expeditiously and once satisfied get it off your desk and out for third party resolution! The longer you wait, the worse things will become.

Step #6: Unless you’re dealing with a familiar company, do yourself a favor and check the majority (if not all) of your customers’ references. Make sure you get enough information to at least make an informed credit decision. Ask for at least three trade and one to two bank references.  Be on the lookout for inconsistencies in the information that you receive. For example: Your prospective customer claims to have been in business for 15 years but none of their references report info back any further than 5 years.

Step #7: Providing additional services /products to a customer that is already past due on earlier orders. When a customer comes back to you for more business before paying earlier invoices, that is a perfect time to leverage their desire for more product (or service) as a way to receive payment.  I can’t count the number of times that I used a COD (equal to the past due amount) method
of delivery in order to get the customer his product and get their account brought current. A real win-win for everyone.

Sunday, November 20, 2011


It’s not unusual to hear someone grouse about the intrusiveness of government regulations. All of this talk of “big-brother”, the “nanny-state” and government regulations’ strangulation of business goes on and on. Some of it is legitimate, no doubt.
But let’s acknowledge a few examples of how government regulation helps the consumer and protects us all from unscrupulous business practices.

America’s favorite coffee franchise got busted.  That’s right. In August the Massachusetts office of Consumer Affairs found out that Starbucks had been adding a surcharge of $1.50 for bags of coffee beans weighing less than 1 lb, and neglected to inform the consumer.  Starbucks had listed a blend of coffee beans as $12 / lb, but the were actually charging $7.45 for a half pound bag.

What about the passenger bill of rights? You know, the law that says airlines can’t kidnap passengers and hold them on a tarmac indefinitely. Before these sets of protections were enacted airlines could keep passengers in virtual “prisoner” onboard an airplane with no food, water or bathroom for hours on end.  Now, after 3 hours they have to allow passengers to return to the gate. If they don’t they can be fined as much as $20,000 per passenger. Don’t believe it? Just ask American Eagle. They were recently fined almost $1 million for violating this law.

Another example of successful (and necessary) government regulation: how about stop signs and stop lights?  Going back to the days of the horse and buggy, traffic in big cities was often heavy. Police officers had to be stationed at busy intersections full time in order to direct traffic. The stop sign was devised in an effort to reduce horse-and-buggy accidents in populated areas. With the coming of automobiles, the situation got even worse. The traffic light was seen as a way to adapt railroad signals for street use in order to control the flow of traffic. Just imagine automobile and pedestrian travel without either of these.

A final example of winning government regulation would be the “Card Act”. This act represents a huge turning point for today’s consumer. Consider the fact that Americans pay billions of dollars annually in penalty fees alone, on their credit cards, and you begin to understand the significance of this law. Finance website calls the 2009 “Card Act” one of the most effective consumer protection policies of the century.  Here are some of the highlights of this law:
  • The act limits when credit card issuers can increase interest rates.
  • Credit card issuers must notify consumers of significant changes in the terms on their accounts at least 45 days before they take effect.
  • The law places limitations on the marketing and issuing of credit cards to those under 21 years of age.
  • Predatory lenders are no longer allowed on college campuses.

The next time you hear someone complain about government regulation being a drain on our economy mention the benefits that intelligent laws provide for all of us. I’m sure that these people are happily benefiting from several that they simply take for granted.

Friday, November 18, 2011

The Next Big Threat to the U.S. Economy

In case you haven’t heard the news: student loans are now at a trillion dollars. Approximately 40 percent of these loans are past due.

Two thirds of new college graduates last year had student loan debt to repay. The average student leaves college with $25,000 in debt. You’re supposed to start repaying these loans 6 months after graduation. Now, if you can’t get a job, you’re likely going to need something like forbearance or a deferment. Getting forbearance is likely but the catch is that your loan interest rate will get increased. Ouch!

Consider the ramifications: students come out of school and they can’t get jobs. Let’s say the economy picks up in 3-4 years and folks can get jobs. There may be a certain group who are always a little older and behind the recent grads not to mention four years deeper in debt.

Universities and Administrators have gone on unprecedented spending sprees. Room and board has doubled in real dollars over the last 25 years.  Athletic centers, stadiums, gourmet chefs in the cafeteria. As a result, the price of education is rapidly escalating out of reach for most Americans.

You get out of college, and can’t get a job. How do you pay the loan back?  Many students owe $50,000, $100,000, $250,000 or more. Even if you have a good job, how do you pay back such an onerous amount of debt?

Student loans are the hardest thing to get out of. These debts cannot be discharged through bankruptcy. Another amazing fact is that even your social security income can be docked.

These are people who will not be able to afford to buy a first home, or maybe not even a car. Their credit will likely be destroyed for life. This is the last thing our struggling economy needs.

Back when I was in college kids were preyed upon by the credit card vendors who introduced us to Visas and Mastercards on campuses throughout the country.  Students have become “cash cows” to colleges and universities through these loan “programs”.

The cost of tuition has been rising faster than healthcare! Has the quality of that education risen along with the price tag? I doubt that it is even possible.

The one thing that these institutions count on is the fact that parents WILL pay to send their kids to college.  And all too often it has to be a ‘status’ school to satisfy the parents’ ego.

We’re still dealing with the ramifications of the mortgage meltdown and could very well be staring at an “education loan” meltdown. I hope this is not the case.

Think about it. Is this the way we want higher education to play out for future generations? How will this country compete if getting a degree becomes a giant ‘pay day loan’ scam?

Monday, November 14, 2011

What Makes Up Your Credit Score?

In today’s society, credit scores play a pivotal role in our everyday lives.  It could mean the difference between obtaining a low interest loan or even getting a loan at all! It can also be the determining factor in getting an apartment or many times getting employment.
To say the least, maintaining a healthy credit score is vital.

The top company in the field of credit scores is FICO. 

FICO is the Fair Isaac Corporation. As a consumer you have 3 FICO scores; one from each of the major credit bureaus: TransUnion, Experian and Equifax.  These FICO scores range from 300 to 850. The lower the number, the higher the risk and the higher the number, the lower the risk for a potential creditor.

In general, to be considered a solid credit risk it is best to be “north” of 720 as a minimum.

Information in your credit report is used within a mathematical algorithm to create your score. Theoretically your score will predict the likelihood that you will become seriously delinquent on your credit obligations within the next 24 months.

Each person’s credit score is made up of 5 factors:

35%  - Payment History. Your history of making credit payments in a timely manner.

30%  - Amounts owed. Total amount of debt being carried versus the total available

15%  - Length of credit history.  How long have you had open lines of credit? The
            longer your credit history is, the better.

10%  - New credit.  How often do you apply for new credit?

10%  - Types of credit used.  “The mix” of your credit including, lines of credit, and
            whether  or not it is installment or revolving credit.

Many people fear that closing an account will do damage to their credit rating.  The truth is that closing an account in and of itself won’t hurt your credit score because you will still get the value of that account whether it is open or closed. The account will continue to age even if it’s inactive or has no balance.

After 10 years closed accounts will get eliminated from your credit report.

The real key is how much open and available credit do you have compared to your current balance. This is known as your credit utilization rate. Folks with the higher credit scores, in the upper 700’s, are typically using only 10 percent of their available credit at a given point of time.

How Can I Receive A Free Copy of My Credit Report?

First of all, forget all those websites with the phrase “Free Credit Report” in them. The place to go is  You can obtain one free credit report each year.

Another option is to request a free credit report by phone (877)322-8228 and have it mailed to you. 

Lastly, you can simply write to: Annual Credit Report Request Service; P.O.Box 105281; Atlanta, GA 30348-5281.

Tuesday, November 8, 2011

Consumers rise up, large corporations take note, what does the future hold?

Bank of America is in Retreat. The nation’s second largest bank blinked last Tuesday. In case you hadn’t  heard, B of A decided to abandon its plan to charge a $5 fee on debit card purchases.

B of A was undoubtedly influenced by the decision of its’ two competitors – Wells Fargo and JPMorgan Chase – deciding not to charge similar fees to their customers.
Unfortunately for the banks’ their decision to squelch the $5 fee couldn’t put the brakes on ‘Bank Transfer Day’.  The November 5th movement encouraged customers of large banks to transfer their funds into local credit unions, and other smaller, regional institutions.

According to latest reports approximately 80% of credit unions enjoyed membership increases in October. The total number of new members joining credit unions was over 650,000 with $4.5 billion in new deposits.

Oddly though, some insiders say the banks couldn’t care less about the defection of smaller dollar accounts. In the end, they simply wind up getting rid of their least profitable customers.

Savvy customers know that the banks aren’t going to let an opportunity to raise revenue get away so easily. You’ve got to believe that more ‘hidden’ fees are coming in the future to make up for the debit fee loss.

By comparison, the uproar caused by the bank’s plan was almost equaled by the furor caused by the subscription increases levied by Netflix.

Netflix, the online and mail order movie rental company, raised prices up to 60% on their U.S. subscribers.  This increase led to a veritable firestorm of anger as thousands of customers have begun to rail against the pricing change.

Just think, in the not so distant past Netflix was the hottest ticket in town. How quickly things can change!

Users inundated the Netflix blog with posts and left thousands of comments on the company’s Facebook page.  To many customers the ploy reeked of a company attempting to wring a few extra dollars out of their pockets.

As a result, Netflix is getting hit with pretty serious losses as customers begin to defect and seek out less costly alternatives.  In a note to its’ investors, Netflix says that they are prepared to lose as many as one million subscribers. Ouch!

By leveraging social media, customers are banding together in order to do battle with corporate America on different fronts. These are true examples of the free market system at work.

When you consider the anger engendered by outrageous airline fees, it will only be a matter of time before they feel the wrath of today’s social media savvy consumer.

Can you think of any other industries that could be ripe for an uprising by fed up consumers?

Thursday, November 3, 2011

Are You Qualified?

 Chances are, that if you wanted a job as a Systems Engineer or a QA Manager or a Billing Processor you’re going to need to meet some job requirements. I mean you can’t just show up and get the nod, right?

My point is, no matter what job you pursue, you need to prove that you’re qualified for it. I see no such standard for holding political office and I wonder why. It seems especially critical in this day and age to establish some sort of standard.

I’ve heard it all my life, “Get out and vote! Many people have suffered and some have died for your right to vote.”  If they had any inkling about the characters we have to choose from I wonder if they would’ve still taken the risk.

A trend seems to have emerged over the last 25+ years in America: U.S. citizens have become increasingly frustrated and dissatisfied with their political leaders and the limited choices they have at the polls.

I mean when your options are tweedle-dee or tweedle-dum, it’s a little hard to get excited about Election Day.

What are the qualifications to become a mayor? Governor? Senator? President? What should they be? Is their a job description lying around somewhere?

These days, if you can afford the price of the ticket, or you have name recognition, you can get in and play.

Personally, wealthy politicians have always turned me off. Not that I have any issues with wealth per se but how can you trust them?  What are their true motives? It definitely ain’t the pay.

I was always under the impression that politicians are (theoretically) supposed to serve the public while in office.  My question is how do you serve people that you can’t even relate to?

Let’s take a look at some major political positions and the qualifications for each, shall we?

Mayor: Must be at least 25 years of age, a qualified voter, a member of his/her political party, and a resident of the territory for at least 1 yr. prior to the election

U.S. Congress:
To become a member of the House of Representatives one must be at least 25 years of age, have been a citizen of the US for at least 7 years, and be an inhabitant of the state they are running for representative in.

Senator: The three qualifications set forth by Article I, Section 3 of the Constitution for senators are: 1) each senator must be at least 30 years old,
2) Must have been a citizen of the United States for at least the past nine years, and 3) must be (at the time of the election) an inhabitant of the state he or she seeks to represent.

Governor: The qualifications for governor vary from state to state as specified in each state's constitution. In general most states require that a candidate hold U.S. citizenship, meet the age requirement (usually 30), and be a resident or registered voter of the state for a certain number of years prior to the election.

President: The age and citizenship requirements as set forth by the US Constitution, Article II, Section 1 you must be a natural born citizen or a citizen of the United States, at the time of the adoption of this Constitution. Shall be eligible to the office of President; be at least thirty-five years of age, and been a resident within the United States for at least fourteen years.

If you were to sit down and create a list of qualifications for an elected official what sort of items would be on it?