Category Archives: Business and Finance

College Isn’t All That

Over the last couple of years with the rise of ‘Democratic Socialism’, aka Socialists masquerading as Democrats, the idea of free college has been making a lot of headlines and gaining some traction within certain circles.

Although entirely flawed, the premises for this idea is as follows: There isn’t enough job opportunity without college degrees, which has resulted in unemployed and underemployed Americans, and the only remedy to this is to get more kids into college. Because without a college degree, people become criminals. But we can’t send more kids to college because it’s too expensive. Rather than finding ways to make college tuition itself less expensive, let’s simply pay an exorbitant amount of money to send everyone to college ‘for free’.

So that’s the idea. That horribly flawed chain of thought has led to the popularity of Bernie Sanders. In fact, Bernie said:

Implying that if you don’t go to college, you’ll go to jail, which is the roundabout way of accusing anyone opposed to jacking up taxes to pay for every kid to go to college as a heartless person who wants to see more minorities end up prison. Essentially.

But the fact is that college isn’t all that. There are plenty of ways to become successful without a college degree.

What has me annoyed and disgusted the most with this whole notion of free college for everyone is that it’s based on a series of false notions, it presents a false dichotomy, it attacks symptoms rather than root causes, it’s redundant, and it would in fact have the opposite effect as intended – meaning it would cause tuition to increase thus making college even less affordable, all of which I will explain below and back up with logic.

Camp Kool-Aid

These days most colleges are simply liberal indoctrination camps. I think a huge part of the reason for Democrat’s wanting more of America’s youth to go to college is to drink the liberal kool-aid and eventually join the ranks of the Democratic party. With their anti-free speech safe spaces, pro-Hamas antisemitism rallies, and trying to oust ROTC and Border Patrol kiosks from campuses and job fairs, you can see how today’s American college campus is the perfect breeding grounds for American liberalism.

Many college campuses are now not only anti second amendment, they are also anti first amendment with students and faculty being suspended, expelled, or fired for expressing things considered to be offensive.

False Dichotomy

Forget for a moment the political posturing related to the free college discussion, and lets circle back to what caused it in the first place. If you ask Bernie Sanders, we need to send kids to college because if we don’t they’ll likely end up in prison. That’s the false dichotomy being presented by the liberal left to America’s youth today: Get a college degree or fail at life.

In response to a like remark made by Sanders, television personality Mike Row had some very interesting things to say where he gives myriad ways to become successful without college, include his personal experience.

Neither my mom nor dad have college degrees, but both are very successful. But what about my generation? Some friends my age, who I went to high school with and who don’t have college degrees are also very successful. I know a handful of people who have college degrees and aren’t successful. And there are people like myself (I consider myself successful) who have a degree and don’t use it in the slightest bit. Had I known I could make as much money as I do without a college degree, I would have never gone to college and started out in my career five years earlier. Just don’t tell my mom.

The always-and-only-college mentality has left a huge blind spot in the American workforce. We’re actually experiencing a shortage of much needed occupations such as plumbers, electricians, mechanics, and other blue collar and vocational related trades. Despite the fact that one can make a good living without working at a desk from 9-5, certain occupations have been framed by society as being lowly, which is a shame.

College Isn’t for Everyone

It’s a waste of money to effectively give every student free education because many of those students will end up pissing away the money we spend on sending them to school. Not every person is made for college. This isn’t to say they are stupid, but that college is a very specific model that isn’t compatible with how everyone learns and thrives.

I have a close friend that has been in college for well over eight years without any measurable progress.  A relative of mine has been in college for 11 years without any degrees to show for it. No bachelor’s degree. No associate’s degree. I love both of them, but they are real life Van Wilder’s, and I think it’s safe to say neither of them will get a college degree.

I certainly don’t think it would have been a good idea to subsidize their education with anyone’s tax dollars because it is clearly working out to be a poor investment. My friend and relative are just two people out of nation of millions. Imagine how many other students would find themselves in similar predicaments, and how much tax payer money would be wasted on a large scale if we sent everyone to college.

Musical Chairs

Taking the previous point and expanding on it, aside from the cost factor of sending incompatible students to college, doing so would also make it increasingly difficult for students who legitimately could benefit from college. As it stands, most US colleges are already impacted. Kids with 4.0 GPAs and all the right motivation have a hard enough time as it is getting into the college of their choice, and the class and programs needed to complete their curriculum. And that’s with tuition costs being as astronomical as they are. If we lowered the bar so much that anyone with a pulse could join college on a whim, imagine how much the current problem would be exacerbated.

Cause and Effect

I don’t think too many ‘Berners’ have really put any thought into why college tuition costs are as high as they are – the root causes. Instead, all their efforts are focused on the ‘evil banks’ that finance student loans, – the symptoms – but for some reason they don’t have the same animosity towards the genuinely evil college system that charges such exorbitant rates in the first place.

After all, if colleges weren’t ripping students off with such high tuition, the student debt problem wouldn’t be so much of an issue. And if colleges are being such douche bags and ripping off students, why are parents so hell bent on sending their kids there? How can a liberal dominated college system be both the cause and solution to all of your financial woes?

Pro-college people argue that you need to go to college to get a good job to make money. And these same people are the ones reeling from hundreds of thousands of dollars of student loan debt accumulated during their stint at liberal colleges. So what is college? Plague or panacea?

Another relative of mine posted the following image on Facebook back in February that shows the tuition change at Yale from 1970 to 2014, against the federal minimum wage of the time. Oddly, the image’s point is to use higher tuition costs as justification for increasing the minimum wage, as opposed to attempting to simply lower tuition costs, which are arbitrarily set.

yale college tuition minium wage
This image is incredibly misleading if for no other reason than Yale is in Connecticut where the state minimum wage in 2014 was actually $8.70 per hour, and it was $8.00 per hour in neighboring New York, Massachusetts, and Rhode Island. Well above the federal minimum wage of $7.25.

I did some homework. Let’s say this image is accurate and that the tuition at Yale went from $2,550 in 1970 to $45,800 in 2014. That is 17.96 times higher, or a 1696% increase.

We’ll yeah Andrew, it’s called inflation! Duh! Just one minute though…

If we take that 1696% and divide it by the time span in years to get an average tuition percentage change per year, we get 1696 / 44 years = a 38.54% annual increase in tuition.

Compare that with the average US inflation rate of 3.22% over the last century, or even the average US inflation rate over that same period of time (1970 through 2014) of 4.08% (sources). Using these historical figures, Yale’s tuition grows nine times faster than inflation.

Basically, if Yale’s tuition moved at the rate of inflation, that $2,550 tuition in 1970 would have been about $14,815 in 2014. So why was it $45,800 instead? Maybe the problem here isn’t the banks financing the tuition. Maybe the problem is the universities who set the tuition. And perhaps supporters of more affordable college need to be scrutinizing the universities they hold in such high esteem.

Gateway to Extortion

The irony of this whole thing is that there is no surer way to increase college tuitions costs than by giving everyone free college. Liberals are determined to get free college for all at any cost, and they might succeed in ways they didn’t hope to.

If colleges around the country know that the US Government is writing blank checks to cover college tuition, what do you think is going to happen to tuition? It’s going to skyrocket. And it doesn’t matter what kind of clever legislation our politicians throw into the mix, the colleges are cleverer, and somehow, someway, they’ll find a way to take advantage of the situation and rip off the taxpayers.

Frugal Alternatives

These days, those of the left persuasion believe that the solution to any problem is to throw more money at it. This has led to the false belief that if you spend a ton of money on college as opposed to less money on technical or vocational school, it will always translate into higher pay. Or that a degree from an expensive, prestigious university will provide for better job opportunities post college.

Both of these myths have been largely debunked, and even in the rare instances where say a degree from Harvard will earn you higher income than a degree from SDSU, the extra income is negligible, and actually comes at a loss when taking into account the net difference between post-graduate pay and overall college expenses. If you spend 2x more on tuition, and make even 5% more per year after college, it would take you 20 years of working to justify (earn back) the higher tuition cost.

Many students want to go to the college of their dreams. And while following your dreams sounds, well, dreamy, when dreams start to conflict with reality there’s a problem. These students insist on attending some far away university, where they’ll get strapped with significantly higher out of state tuition costs, plus the added expense of room and board. All of which they could have avoided by simply going to a local, in state university and living with their parents for at least a portion of their college career.

Ultimately, college is a financial decision. Not an emotional one. So students, and more importantly their parents, need to start looking at college options closer to home where they can take advantage of the lower in state tuition. Take it a step further and consider attending a community college for as many semesters as possible and students can save tens of thousands of dollars per year on their education.

My freshman, sophomore and junior years were spent at Grossmont Community College where my cost per semester was about $600 (with books) as opposed to the $5,000-$7,000 it would have cost me at SDSU. I transferred to SDSU in my senior year where I finished my bachelors degree and graduated in the spring of 2009 alongside all my friends who went there for all five years, but in the processed I managed to save about $30,000.

We all want to have our dream house, our dream car, our dream vacation, our dream wedding, and go to our dream college, but the simple truth is that those things are often times cost prohibitive and well beyond our budget. It’s stupid to spend $50,000 on a BMW when you can only afford a $25,000 car, and it is just as stupid to attend an expensive college when you can get a degree every bit as good for a quarter of the cost. Some community colleges are also beginning to offer bachelor’s degrees of their own, negating the need for costly universities altogether.

Borrow Wisely

Another problem is that many students simply borrow when they don’t have to. Student loans should be used to cover tuition and books, and not much else. However a lot of students will finance everything they purchase while in college, from housing, to food, to luxury items like recreational spending and even overseas vacations.

This is unwise for a number of reasons. The whole point of a student loan is to pay off an expense you otherwise would not have had: college. However whether you attend college or not, everyone has food costs, housing costs, clothing costs. Just because you are in college, doesn’t mean your breakfast while in college is a college expense. It’s a living expense. Everyone has to eat. Students make the mistake of financing things they would have had to pay for even if they hadn’t gone to college. The result is that when they graduate you aren’t simply paying off five years of deferred tuition, they’re paying off five years of deferred life.

Additionally, students should actually start paying off, or saving to pay off, their debt while they are still in college. When you consider that student loans are basically the only loans in which the borrower is not charged interest for up to half a decade, student loans are actually the most relaxed form of lending on the market. You have 0% financing for 60 months! Don’t wait until graduation to start paying off your debt. Start on Day 1 of freshman year.

Reinventing the Wheel

The other hilarious thing about this recent sensation is that programs already exist to get college loans paid off easier, quicker, and so inexpensive that it is essentially debt forgiveness. About ten months ago I posted a blog written by my cousin-in-law Chris Johnson titled “The Truth About Federal Student Loans” in which he describes in amazing detail the government programs that have existed for decades to help alleviate student debt, and how such programs are alive and well today. It’s funny because democrats are crying for something that already exists.

In Conclusion

Liberals want to send more kids to college to be brainwashed into becoming liberals themselves.

There are many pathways to success, many of which do not included college. College is not a requisite for success.

Not every kid would do well in college, therefore giving every student free tuition would be a gross waste of money.

Because schools and courses are already impacted, sending ill-suited kids to college would jeopardize the education of students who actually are suited for college, by making it even harder for them to enroll in the classes needed for their degree and by spreading professors thin.

Yes, college tuition is high, but don’t blame the banks for student debt. Blame the universities for ripping-off the American public. Colleges across the country have routinely increased their tuition at a rate much higher than inflation would account for. Colleges need to be brought to task, not the lending institutions.

High tuition costs are avoidable though. By attending state universities and taking your general education requirements at a community college students can cut the cost of college in half.

Only finance college costs. Do not finance general living expenses. Students and parents should start paying off, or saving to pay off student loans from the very beginning. That debt should not be ignored simply because it is not yet due.

This is the truth behind, and the solution to the United States current student loan crisis. The fact is, college isn’t all that.

LinkedIn is Stupid

I’ll probably end up careening off course and trashing the rest of social media but my goal here is to tell you how fucking stupid LinkedIn is.

So a million years ago when I graduated college I made a LinkedIn account because “well gee whiz it’s what everyone’s doing and apparently you HAVE to have one to get a job so duurrrrrr” And here I am a million years later and I’ve updated and maintained it and filled in all those stupid little fields, and have like 18,000 contacts or connections or whatever the fuck it’s called and honestly I’ve never gained anything from it.

Yeah I know what you’re thinking. You have a LinkedIn account and you don’t want to face the fact it’s never helped improve your life or your career and then of course admit you’ve wasted dozens of hours of your life maintaining it, so rather than nodding your head in agreement you’re probably doubling down on its usefulness and hate me for saying it’s shit.

But shit is shit no matter how useful everyone says it is. LinkedIn is about as useful as Drano is for your home’s plumbing or as useful as Emergen-C is for your immune system.  Meaning it’s not. Or maybe at the very best sorta maaaaarginally useful.

But really though, think about it. If you’re like me you also have your LinkedIn profile. You have a couple hundred connections, 90% of whom you have no fucking idea who they are. You probably get your weekly LinkedIn email notifications that some random ass person you’ve never met wants to connect with you, and maybe you accept their invite… but only if they’re hot.

LinkedIn Profil Busty Girl
Make sure your LinkedIn profile really shows off your best… eh hem…. qualities.

Every so often out of the blue one of your friends +1’s on of your abilities/skills/qualifications and then you think “Oh cool!” and then you begrudgingly reciprocate and +1 one of their skills out of guilt, whether or not they actually do know how to use Microsoft Excel.

No matter your occupation, you probably get the occasional sales pitch for a ‘Sales Leads Generating Opportunity’ for only the most highly qualified professionals in your market which naturally got blasted to a quarter of a million other people.

And after all these years of updating your resume, and sharing links to articles you’ve never read but sounded important, you realize LinkedIn has never actually got you a job. It’s probably never even got you an interview. Or a referral.

Ask your friends if they’ve ever been hired exclusively from LinkedIn. You’ll hear a resounding no. How something so useless is so prevalent is beyond me. Kind of like degrees in psychology or communications.

The fact is LinkedIn sucks because it like so many other social networking services tries to replace something that is irreplaceable: Face to face human interaction. Maybe because I’ve always had so much success getting a job I never understood the difficulties people faced with it. I’ve never applied for a job and not been offered the position. No shit. The key to getting hired isn’t in LinkedIn. It’s not even your resume. No one is going to hire your resume. No one is hiring your LinkedIn profile. They’re hiring YOU. If your resume rocks, and your LinkedIn profile is stellar but you kinda suck, you’re not getting hired.

People are hired in bars. People are hired on the golf course and the putting green. People are hired at backyard barbeques. People are hired in the waiting room of restaurants. People are hired in hotel lobbies. People are hired at the mall. People are hired on ski lifts. People are hired in elevators. People are hired at birthday parties and bar mitzvahs. People are hired where real life social interactions take place. Not online. Not on your phone. Not behind some screen.

So if you want to get a job, if you want to network, if you want leads, go out and get them. Just don’t expect to get them online because LinkedIn sucks. And no, I don’t want to join your e-marketing group.

Stop Using Uber

Uber busted on to the scene a couple years ago and it has made a ton of waves and headlines since. The taxi cab replacing service has garnered tons of popularity and enthusiastic response. However what you don’t know can hurt you, and my guess is that in a few short years some of the popularity surrounding Uber will turn into notoriety.

The truth is, that as of right now, the current Uber model really isn’t all it’s cracked up to be. In fact, not only might Uber simply not be as financially lucrative as many other articles have bemoaned, Uber might actually ended up royally fucking you over.

Most of the anti-Uber stuff I have read either deals with things like politics, whether Uber is profitable for drivers or not (the answer is no, it’s not), and then the occasional scare blog that you’ll get raped by your Uber driver. The authors of the pieces don’t do themselves any favors because the pieces are so narrowly focused on one minor issue that they downplay the real urgency related to Uber, it’s drivers and their passengers.

And while these might be real issues related to Uber, they aren’t central to the reason you should stop using it. Each driver will wrongly or rightly decide to what extend if at all Uber/Lyft and similar services are profitable for them, and if it’s worth doing. And the rape/murder kidnapping stories are to avoiding Uber, as shark attacks are to avoiding surfing – statistically ignorable.

Trouble with the Law

The real dangers with Uber are legal and liability related. Insurance isn’t sexy and it certainly won’t make any headlines but insurance – or the lack thereof – is the single greatest reason for not using Uber, especially as a driver.

(I am a licensed and very knowledgeable insurance agent, so trust that this isn’t just hearsay coming out of my ass. This is some real advice you can take to the bank.)

Vehicle owners are required by law to have insurance on every registered vehicle. Given that all reputable car insurance companies exclude livery service from their personal auto products, this effectively means that if you are an Uber driver, and you have a regular ol’ car insurance policy, you are driving without insurance, and you are breaking the law.

 

Don’t believe me? Ask your agent for a copy of your auto application. I know, I know. You flipped right to the last page, signed your name, and didn’t read a single line. But if you had, you’d have notice the part of the contract stating you decline coverage for livery, delivery, and other commercial use.

Ways this can screw you:

  • Having your driver’s license suspended
  • Having your vehicle registration suspended
  • Receiving a traffic ticket for a no insurance violation, in addition to the ticket you got for the original reason you were pulled over
  • Meeting SR-22 requirements (if you are required to have one, if for example you are required to because of a DUI)
  • Huge fines
  • Increased future insurance premiums

Insurance and Financial Liability

All the other stuff above is really just annoyances and inconveniences. Granted some of those things can cost you a couple hundred dollars, but ultimately they’ll waste dozens of hours of your time. I suppose time is money though.

But, back on track, Uber driving is a great way to screw yourself financially. Kids, it’s time to review insurance 101. In the United States owners of vehicles are financially responsible and liable for any damage or bodily injury resulting from the use of said vehicles.

What this means is that if you get into an accident and damage another party’s car or property, you are responsible for all costs of repairing / replacing whatever it is you messed up.

Now comes the real juicy stuff. What if in addition to damaging property you ended up injuring someone, or actually hospitalizing someone? Or dare I say it, you paralyze or kill someone?

Either way, if you don’t have insurance, you are screwed. And if you are driving Uber at the time the accident happens, I repeat again, you are screwed.

Uber has gained some negative attention in the past couple years for not covering accidents their drivers get into. The rationale was always that you were a private contractor, not an employee, and while Uber has applied that thinking to their stance on employee benefits, they’ve also applied it to their stance on auto insurance. You are responsible for your own insurance, not Uber. So while many rumors abound that Uber does over you, if that was the case you’d have to ask yourself why they mandate you have coverage of your own.

Extra Notes

Commercial Insurance

The only guaranteed way to have proper liability coverage would be to take out a commercial auto policy that explicitly includes coverage for livery services. Such policies are more expensive and might be with “surplus” carriers.

Financed Cars

If your car is being leased or financed for personal use (pleasure, commute, etc) and you use it for Uber or Lyft, you may actually be in violation of your lease/loan agreement since commercial usage is strictly prohibited. If you do your due diligence and get a commercial auto policy and submit it to your finance company, they’ll surely spot it, and take action against you. So while you might spare your left foot, you may inadvertently end up shooting your right foot.

By The Books

Proper licensing and decals are also important. Certain areas mandate that taxi cabs be registered and have all the proper decals. Uber is a taxi by any other name, like it or not. And if you are performing taxi services without getting all the necessary permits/licenses/registration in place, again, you may be breaking the law and subject to fines.

Passenger Risk

Lastly, you shouldn’t even use Uber as a passenger. Would you knowingly use a roller coaster if you knew the amusement park carried no liability insurance? If not, why would you get in someones car if you knew they did not have auto insurance? Considering 32,000 people in the U.S. die in car crashes each year, and only 3 die on roller coasters in the same amount of time, if you could justify not getting on an uninsured roller coaster, not getting in an uninsured car is should be a no-brainer.

In Summary

Uber drivers not getting paid enough or the prospect that your next passenger might be an axe murderer are certainly issues worth discussing in a different post. However the main reasons for not participating as an Uber driver is because you can get royally screwed in the event of an accident. Life won’t be very fun for you once the injured party lawyers up, and you’re staring down the barrel of a lawsuit with no insurance company standing behind you. Add to this that when the DMV finds out, they’ll also take away your license and your car, you’ll be traveling up shits creek, and it won’t be in an Uber.

Reading Material

http://fortune.com/2015/10/13/uber-crash-insurance/

https://www.policygenius.com/blog/insurance-secret-uber-doesnt-want-know/

http://www.propertycasualty360.com/2015/02/09/uh-ohuber-has-some-coverage-issues

My Life Insurance Experience

It’s 5:41 in the morning and I just finished my life insurance “paramed” exam. To the uninitiated, when you take out a life insurance policy, the insurance company sends someone to meet with you, and check your health using a variety of questions, diagnostics, etc. This process is called the paramed, or para medical examination. My examiner was a nice guy named Tony, who arrived at my front door around 5:15 AM.

What to Expect

It was a pretty easy process. Here’s a quick rundown of what we did:

  • Check height
  • Check weight
  • Check blood pressure
  • Check pulse
  • Measure chest
  • Measure waist (it felt like I was being measured for a tailored suit)
  • Collect urine sample
  • Collect blood sample
  • Ask a bunch of questions about my health, medications, and the health of my blood related family members

Early Bird Special

The early bird slot wasn’t randomly assigned to me. I opted to get the early appointment for a reason. Your body isn’t as compressed in the morning as it is after a whole day of walking, running, driving, and sitting. You also usually use the facilities before going to bed. Basically, you’re taller and you weigh less, so it helps with your height to weight ratios Even if just a little, it makes you appear healthier, which can be the difference between one rate class and another, if your health is on the edge. I’m healthy as a horse according to Tony, but still, why risk it?

Also, you are usually calmer in the morning, not having endured 8 hours of stressful work, and 2 hours of stressful traffic, plus whatever other chores life throws your way. So your pulse and blood pressure will ready healthier results in the morning, than they would if you did the exam after clocking out of work, or sitting in rush hour.

Urine or You’re Out

They do require a urine sample for most life insurance paramed exams. Unless you are getting a super small $10,000 “funeral policy” as we call it, they’ll want to get some indicator of your health.

Make sure you drink water in the 4 to 8 hours leading up to your exam. If you don’t provide a urine sample then and there, they will have to reschedule the exam.

I had a problem with this part of my exam. No, no. My problem wasn’t performance related. It was actually that I had to pee really freakin’ bad, and had to hold it. Whether I wake up at 7AM, noon, or 5AM, using the john is the first part of my morning routine. My dude was running about 15 minutes late, and it had me bouncing on my tippy toes like a 6 year old waiting in like to use a porta potty.

When Tony arrived at my door I politely asked if we could do the urine part first and he obliged. I have the feeling it was not his first time being asked.

Bloody Mary

The blood part is super easy. I know a lot of people are a bit squeamish when it comes to getting their blood drawn. If you’ve ever donated blood you know that needle is the size of a 7 Eleven Slurpee straw.

The needle they use for donating blood is a 16 or 18 gauge (1.27-1.65mm outer diameter).

The needle they use for the paramed is about 21 or 22 gauge, which despite the larger number actually means it’s considerably smaller and less intrusive. It’s about 0.82mmm or 0.03 inches, smaller than most pencil lead.

Don’t worry, unlike giving blood the needle is in and out. I think it took about 15 seconds to get all the blood they needed.

I did not, to my disappointment, get a Ninja Turtle Band-Aid and a lollipop. I’m writing a stern letter to management over that one.

Ermahergd! Lerlyperps! Muh fervert!

Do Yourself a Favor

Here are some things I recommend you do to make the process of obtaining life insurance and the paramed easier for you, and get this, your kids too.

Clothing

Come prepared. Make sure that you are wearing light clothing, or easily removable clothing. Mine was at the crack of dawn, so I was still in my PJs. But remember that every ounce counts, and they don’t deduct the weight of shoes, your cellphone, etc. So make sure to empty your pockets and strip down as much as possible for your weight measurement.

Medication

If you are taking any medication, instead of making a list or stumbling to remember everything just bring all the prescription bottles with you to the exam. The examiner will make sure to notate everything for you. They’re the professional. Let them do the hard work.

Environment

Do NOT have your exam in a stressful place. So don’t have your kids running around wreaking havoc while the examiner is reading your blood pressure. It’ll mess with your results. Meet someplace private, away from stressors and distractions, and of course, some place where you can pee. So avoid the zen-filled park down the street.

Think About the Children!

I’m going to take this in a direction you probably didn’t think of. Yes, many people get life insurance to help take care of their kids in the event of the worst. But that’s not what I mean.

Many life insurance policies let you pay a little extra to add your kids on to the policy as well. So they might have a little $5,000 or $10,000 policy on them too. The benefit to this is that when your kids reach a certain age, like 18 or 25, they have the option of converting their policy to a big-boy policy like you have.

Most companies that offer this product don’t require the kids to get a paramed exam of their own. Basically, if you add your kids on to your life insurance policy, they don’t have to jump through all the hoops that you did. On top of that, they get locked into a particular health category. So if your kid started on your policy at 7 when they were super healthy, developed diabetes at age 15, and then converted to their own policy at 18, they don’t have to worry about being up-rated, because they started their life insurance when, and are being rated as if they are healthy. The only thing that they will be charged more for is aging.

I’m 99.9% certain on this, so I will make a few inquiries and find out, and retract/modify anything in this post later on if I am incorrect.

Get a Life… Insurance Policy

No seriously, you really ought to. Same thing I mentioned earlier about the kid, applies to you. A lot of people don’t even consider life insurance until too late. They think they are too young and even if they are married, if they were to die their spouse still has plenty of time to remarry, or get a job, etc.

Get a policy as soon as you can before any health conditions kick in like diabetes, high blood pressure, gout, or even an STD. Again, you’ll be locked into the risk category the policy was written at.

Plus, if you actually get a decent whole life policy there are a ton of benefits. They let you squirrel away money tax free. They have the ability to grow in value over long periods of time, especially if you have a universal or variable policy. You can borrow against your own life insurance policy if it has a built up a cash value, which pretty much acts as a miniature banking account that you can borrow from with no penalties and no obligation to ever pay it back. Many people borrow against their own life insurance policies to help their kids pay for things like their first home, or their grand-kids’ college.

Some of them kick in early if you suffer a terrible accident or are expected to die soon. For example a $500,000 policy might kick in $250,000 while the insured is still alive but are expected to not make it very long due to a medical condition. This can make the final hours much easier for the insured and their family (paying for travel expenses of family members to visit, hospice care, etc). And then the final $250,000 is paid out after departing.

And finally, many of them have Long Term Care riders built in to them. The life expectancy of Americans are getting longer and longer and more of us are expected to life into old age. To quote the Wall Street Journal, “more than 70 percent of Americans over the age of 65 will need long-term care services at some point in their lives, according to a study by the U.S. Department of Health and Human Services.” Sources. Individual LTC policies can be pricey, but you can save a ton by bundling it with your life insurance.

Alright, I’m done. It’s getting late – 6:38AM. So I gotta get going. But thank you for reading. I hope you learned something interesting or two and chuckled a bit. And if you are curious about life insurance and live in California, message me.

99 Homes: Movie Review

A little late I know, but better later than never, right?

99 Houses was a very different movie from anything I have ever seen. It stars Andrew Garfield, the short lived Spider-Man star. It also stars Michael Shannon, the guy who played General Zod in Man of Steel, but you might also mention him from a dozen other works like 8 Mile, Iceman, and Boardwalk Empire.

The story is about Dennis Nash (Garfield), a young blue collar man trying to single handedly raise his son and his mom in a rough economy, in the midst of losing their home. That wasn’t a typo.  Dennis practically raises his mom, who acts more like an irresponsible 19 year old daughter who dropped out of high school and is going to a trade school, than a mother.

Nash loses his home to the bank, and his eviction is overseen by a strict, no nonsense real estate developer, Rick Carver, played perfectly by Michael Shannon.

After initially losing his home, Nash despises Carver and naturally sees him as the person responsible for his misfortune. However a chance encounter with some of Carver’s home-flipping laborers turns into small time, small paying labor jobs. In short time Dennis Nash has a lucrative career not only working for his former nemesis, but along side him.

In the trailers, Shannon’s character was portrayed as this evil, corporate, heartless business tycoon who steps on the innocent, hard working little man Dennis Nash, for his own greed. After all, that is the song being sung by almost everyone in the country these days, regardless of your political affiliation. The narrative being painted today is that homeowners are all saints who have done no wrong, and financial institutions are all secretly owned by Hitler death squads.

You definitely do sympathize with Garfield’s character. The movie pulls no punches in the heart area, when you are forced to watch this dad get kicked to his hands and knees, and struggle to support his family.

But interestingly, over the course of the movie the character I really took a liking to, was Shannon’s character Rick Carver. Yes, I liked the “bad guy” more than the “good guy”. Was the guy a stone cold hard ass? Yes. But he was also a smart, hard working son of a bitch. He was also a loving father who wanted nothing but the best for his children. But he also did everything he could to teach Nash how to earn, spend,and invest his money properly.

Without spoiling the movie too much, this is perhaps the most interesting part of the film. Despite our cultural views of bankers, businessmen, and wall street, this movie attempts to show you a different angle, and in many ways approaches a paradigm shift between the contemporary views of “good guy” and “bad guy”. In fact, I didn’t think Carver was the bad guy in the movie at all until a hiccup at the very end of the movie, but again, no spoilers here!

Our two leads did an amazing job. You forget about Garfield’s most recent web slinging hurrah and you really do see him as a father trying desperately to make ends meet for his family. His grief, his stress, and his struggles are portrayed perfectly, and you feel every ounce of emotion Garfield brings to the set.

Michael Shannon of course needs no introduction. This actor has always floated in that narrow corridor between A-list and B-list actor. He acts better than most A-list stars but just could never get the cinematic boost needed to rise into full stardom. Nonetheless, I couldn’t have thought of a better actor to take on the roll of the tough as nails Rick Carver. Shannon’s intensity, and rigidity make him a one man force of nature, and his presence on screen is heart stopping.

I highly recommend 99 Homes to anyone who wants to see a genuinely well written, well casted, well acted, and well directed movie. No negative feedback about this movie whatsoever. 5 stars.

The Truth about Federal Student Loans

A million thank-yous to Chris Johnson for contributing this latest post to Canyoubelievethatguy.com. This is our second post from someone other than myself in the past two weeks and I am very excited and appreciative to have an additional author contributing to the site.

 His post touches on something that has been the subject of much debate recently – and that we’ll probably hear a lot about in the coming election cycle – and that is student loans, and whether or not college education and the tuition that comes with it is affordable for the average American. Chris was kind enough to get us past the fog and rhetoric, and give us some real hard facts about the issue.  Thanks Chris! -Andrew H.

Federal Student Loan Repayment Options

I was asked to say a few words on student loans. I want to start by saying that I think it is rather funny to me that after all this time in the student loan industry, the first person to ask me about this, the first person who actually reached out for information is, like me, someone who believes we already have enough tools to build a good life. Like me, he feels the game is already more than fair and that it simply requires effort, hard work and dedication. Of all the rants and complaints about free education, he is the first to ask me about this even though I have posted no less than 40 times, mentioned in conversation no less than 100 times that for most, education is already either free, or very affordable. And he asked me the first time I  mentioned it to him. To me, this says something about the people asking for more from their country vs those who ask more of themselves. Jim Rohn said it best, don’t ask for it to be easier. Ask that you become better.

With that said, I’ll jump right into it. The Federal Government has, already available several programs that allow federal student loans to become affordable. In most cases one can eliminate interest all together. I have been in finance for almost 13 years now. For the first 11 or 12 I was a Mortgage Banker. But for the last two, I have been a Compliance Officer for federal student loan programs. There are at least 7 programs available and they all serve a specific purpose depending on the borrower and where they are in life. But there are three programs that stand out. Three that literally offer anyone the ability to absolutely make their federal student loan debt affordable. The US Department of Education’s IBR (Income Based Repayment) option. Before I jump into the details,  I think it might be best to first touch on how student loans work, why they are so incredibly difficult to pay off and ultimately why they are such a problem in the US.

When you get a federal student loan, you are not taking out a mortgage. You are not qualifying for a car loan. You are taking out a heavy debt with a high interest rate you likely cannot refinance and one that will charge you interest daily. On top of that, it will compound daily. If you understand finance then you probably know at this point, most people are paying a negative amortization loan. This means that they are making payments on their loans and are not even covering the interest on a monthly basis. They are paying towards their loan(s) and the balance is actually going up.

What’s being done about this, nothing. Why? Because service providers of federal student loans have lobbyist in Washington that are second to none. The laws are not written to protect borrowers. They are written to make money. Same thing happened with mortgages and the US threw a fit. Regulation was again placed on the industry and and the entire industry was turned upside down.

 In the US, federal student loan debt exceeds car loans and credit card debt combined.

Who was to blame, the banks, the consumer? Personally I say both and I think the circumstances of each deal would have to be considered. But what scares me is that this industry is doing the very same thing and no one is even talking about it. No one seems to think its a big deal even knowing that in the US, federal student loan debt exceeds car loans and credit card debt combined. To make matters worse, a majority of this debt belongs to our young, our future. They are entering into the professional world behind the line. I will conclude this paragraph with probably the scariest and in many cases least known fact about federal student loan debt. You absolutely cannot get rid of them ever. With exception to these federal forgiveness programs and people that are 100% and permanently disabled (after the loans were acquired), these loans do not ever go away. In fact, they are on a short list of debts the government can actually garnish from disability and social security income. And make no mistake, they will. So if they are willing to take social security income from people living off of $800 to $1,500 per month, what do you think they would do to people in the work force?

So now we know federal student loans are very difficult to pay off. We know why student loans of $40,000 take 80 years to pay off while Americans in New York and Los Angeles pay off $600,000 to $800,000 mortgages in 15 and 30 years. And yes, we now know why a specific group of individuals are upset that college is too expensive. Well now we can jump back to the IBR programs offered by the US DOE. The William D. Ford Act was passed and authorizes the government to forgive federal debt. The IBR comes with it a very specific yet very short list of guidelines. Prove your income, tell them how many people you live with and they will determine what your payment should be. Do not worry about the interest. Do not worry about paying off the loan or loans.

First, they will consolidate your loans. Then, they will set you up with a term, 120 months (10 years), or up to 300 months (25 years) and or anywhere in between depending on the income and family size. They will take between 5% and 10% of your gross annual income as payment or less, again depending on family size. They evaluate this income annually. Every 12 months you must turn in one of three forms of POI (proof of income). Pay check stubs, tax returns from the previous year or bank statements in some cases. In some cases you may even be able to use tax returns from the year before last. If you are married and use returns (1040’s) they will base the payment off the borrowers AGI (Adjusted Gross Income). If you use pay stubs there is a chance you can separate the income, meaning the calculation for the borrowers payment will be based off one persons income rather than the combined income. If you already file separate returns, this too will allow the calculation to be based off one persons income. Even when separating the income, you may still use the full family size for the calculation. I understand this can become complicated and in many cases, people do screw this up. Service Providers like Naviant (previously Sallie Mae), Great Lakes and Nelnet should offer this service (and can), and for free. They don’t unless you are aware of them and ask. And if you ask me, trusting them to do it for you is like asking the prosecuting attorney to handle your defense while trying to prosecute you. Remember, they are paid off the interest.

There are also services available to assist in the evaluation and enrollment as well as management of these programs. If you seek this assistance out, under no circumstances, I repeat under NO circumstances should the consumer pay for these services until the entire process is completed. Not for any kind of application fee, not for any kind of processing fee. NOTHING, not a single dime until you are in and enrolled correctly. Even if they ask you to pay into some type escrow account, your talking to the wrong people. To add to this, these services are not a part of the program, and like the service providers borrows are already paying they do not work for, or are not a part of the federal government.

If you can manage this yourself, you should. If on the other hand you are the type of person who has a hard time with this sort of thing, or if you are not good at staying on top of things like this, I’d recommend the assistance. To receive the forgiveness or complete the program, the evaluation, like I said earlier must be completed annually, every 12 months until the term is up. Only then, when the term is up can you provide proof that the program has been completed. As a rule of thumb, I ask people this, do you do your own taxes? Or do you hire someone to do them for you? Use that same thought here. Another example I use for clients, if you get a speeding ticket, you would not hire an attorney to fight it. It simply wouldn’t be worth it. If on the other hand you hit and killed someone with your car (on accident of course) you would probably hire one. Well if you owe $5, $10 or maybe $15,k, that’s like a speeding ticket. $20, $50 or $100,k plus… Obviously I work for one of these companies. I assure you, they are quite compliant, it’s my job to make sure they are. If it is done correctly, if you are enrolled, maintain enrollment annually and keep up on the payment the government will forgive the remaining amount owed at the end of the term. You can still go into deferment or forbearance but you will not receive credit during this time towards the forgiveness. If you have an unstable income, or if you are not in a career type work environment, you may see income go up one year and down the next. No problem. The term will adjust accordingly. The best way to look at it, the higher the income, the higher the payment but the lower the term. The lower the income, the lower the payment but higher the term up to 25 years unless, you qualify for PSLF or PAYE.

PSLF is another program that falls under the IBR option. If you work in public service or non profit, the term is automatically 120 months or 10 years. This includes but is certainly not limited to: Police Officers, Teachers, Church employees, Soldiers and Nurses. Anyone paid by the state, the government or even local government like city and county employees. You pay an affordable payment, many times a payment of zero for 10 years and then your debt is forgiven. And this is not some kind of hand out, it is not a compromise. It’s simply an alternative to a standard amortization. Instead of paying off your loans, with a payment based on balance and interest, you make a payment based off income and family size and for a specific amount of time. The Government feels that they will get enough from you from the term set. They are willing to take whatever this amount comes to at the end of the agreed term. The difference here, with PSLF is that as long as you are employed by public service or non profit, you will be finished after 10 years regardless of how much you’ve paid towards your debt. Even if you’ve paid zero dollars. Another program, Pay As You Earn (PAYE) is similar, only the term is 240 month or 20 years. The PAYE program also starts at a lower percentage, meaning they only take up to 5% of the borrowers gross annual income. This program is for any employment type but the loans must have been acquired after late (end of November) 2007.

So in the end, anyone qualifies as long as the loan(s) are federal. There are private student loans as well and if you do not know what kind you have, you can ask your service provider. If you are familiar with FASFA or the DOE, you likely have federal student loans, not private. Or, if you want, my information is below. I’d be happy to assist anyone or refer them to an Account Manager that can. If you owe federal student loan debt, this is the best and most efficient way to repay them, period. The only exception, specific circumstances and loans. Parent Plus Loans are limited to one program and in some cases, the benefit is not all that great. Still worth looking into though. If you have consolidated and then defaulted, could be tough to get approved. Again, it cannot hurt to find out.

I will leave you with an example. A man lives with his wife, two children and his wife’s mother. So the family size is 5. His income is roughly $32,000 per year and is steady. I might add that with a family size of five, he could make upwards of another $5 to $7,k per year and his payment would be the same as it is now, $0 (zero dollars per month). He pays $0 per month, has been in the program 3 years and has thus far has paid absolutely nothing on his student loans. Based on his percentage increase in income every year, he will pay $0 for another 4 years. That is seven years with no payment. If he is lucky, and his income increases to what he expects, on his 8th year in the program he will qualify for a $10 per month payment. In the 10th year, his final year because he is a teacher, he will pay $40 per month. That means that he will pay $720 over a ten year period of time and on a $45,000 federal student loan. He entrusted us to manage this for him and the payment to us is $39.42 per month. Add that up over 10 years,  you get $4,730.40. So all together, he will pay $5,450.40 and he will not even have to think about interest. Not to mention, once he enrolled, his DTI (Debt to Income) ratio came down TO ZERO. His credit scores improved and his monthly affordability came up.

Compare this to what he was doing… $45,000 at 6.8%. He had just left deferment and had agreed to pay $450 per month. It would have taken him 12 years and 3 months to pay off and he would have paid $21,047.83 in interest alone. So he was on track to pay $66,047.83. Now, he will pay $5,450.40 and in less time. Show me a country that offers that, with the same amount of opportunity, same market and the same amount of citizens. Personally, I call that free education.

Chris Johnson, VP, Compliance for Student Advocates,  September 2, 2015

Chris’s Information is included below:

Cell: 562-231-4120.
Office: 714-473-1800.
Email: cjohnson@r3group.org

Good Riddance – Firing Bad Customers

In the 80’s and 90’s some clown came up with the new slogan for corporate America that will go down in infamy, “the customer is always right”.

There is of course no shortage of incompetent labor in the American workforce, but anyone who has ever held a job also knows that more often than not, the customer is usually wrong.

I appreciate my customers immensely. But the fact remains my customers are usually wrong too. Even the ones I love. Even the ones I’m related to. Even the highly educated well-to-do beach front homeowners with degrees from prestigious schools are usually wrong when it comes to insurance.

And that’s 100% fine. It’s normal.

If they knew everything about insurance they’d be insurance agents. And if I knew everything about medicine I wouldn’t need a doctor.

Knowledgeable or not doesn’t matter, I love my clients and do everything I can to give them the best service available.

The point of the washed up corporate slogan that the customer is always right was of course not that customers are literally always correct in their assumptions or actions, but rather that you as a business person motivated by money should bite the metaphorical bullet, swallow your pride, and do whatever you can to appease and satisfy your customer. But even that notion is becoming obsolete.

I have an inside joke with a close friend of mine: Everyone’s money is green. True statement. The point of this was that green is the color that triumphs all. The color of your money matters more to business owners than the color of your skin. Money matters more than your political leanings, your culture, your religion, your sexual preference, your economic standing, your education level, your language, your nationality. And by all accounts this is true.

But in recent years I have appended that statement with another truism: …but some people’s money is greener than others.

Yes you should do what you can to make your customers happy. After all, happy customers are profitable customers.

But we’ve all heard another equally popular notion, that of the 80/20 rule. The rule goes that 20% of your customers will make up 80% of your problems. The exact figures might not be accurate but the gist of it is that some small, insignificant number of people are responsible for the vast majority of complaints, grievances, screeching voicemails, and wasted time that you experience.

If you’re a business owner, if you’re in sales, if you have ever had a job, you know this to be true. There’s that one client who always complains her food is too cold (or too hot). The habitual late payer. The guy who never checks his mail and claims he never got the bill you know sent him. The liar. The fraudster. The person who leaves a 5 minute long voice message that conveys nothing remotely important. The customer who returns half the clothes they buy with a stain on it.

Whatever your business, whatever your trade, you’ve undoubtedly had to service this person.

Customers make you money but they also cost you a little too. After all, customers are investments, and investments don’t come free. Making customers happy means investing some time, effort, and maybe some money in them.

Let us pretend you have 10 customers who all spend about the same amount at your business every year, whether it’s on pizza, clothes, insurance, or snowboarding equipment. 9 come in, say hi, smile, find what they are looking for, pay, and go on about their way with the occasional inquiry, and even rarer complaint. These are the good customers. The ones you would do anything to keep. You call them, and spend the extra time with them to make sure they are super satisfied with their experience, because you love hearing from them and want them to keep coming back. These are the customers you go to bat for, bend over backwards for, and jump in front of a train for, because they are worth it.

But then comes 10. There is always a number 10. This client walks through your door or you see their name on your call ID and suddenly it feels like the never ending Monday. You know it’s nothing good, it’s never anything good with this client. What is it they want to gripe about this time?

You have always put up with this person because you are worried about losing their business. You force a smile and want to keep them happy so they keep coming back, but you shudder with dread every time they actually do come back.

I can go on for pages about bad customers but I don’t need to. You know who your bad customers are. You know them by name. You could spot them in a police line-up. You could recant their phone numbers by heart. You can catch their scent from a mile away. Think of all the time you have spent dealing with these clients and their endless barrage of problems, usually self-inflicted. Think of all the hairs turned gray. Think of all the innocent staff under your watch who have been ripped a new orifice by these customers…

And now, think about how much more profitable it would have been to have used that time and effort acquiring new clients, or helping other clients who are wonderful to work with.

Enough with the façade. End the charade. Don’t wait for your bad customers to fire you.

Fire your bad customers.

Everyone’s money is green, but some people’s money is greener.

You don’t have to make a scene about it. Firing customers can be subtle. Be frank and open with them, and let them know that for whatever reason, your organization might not be the best fit for them, and recommend them to some other businesses that can help them.

In fact, do yourself a double favor and recommend them to the competition.