Category Archives: Home and Living

Baby Bear Cabin Renovations 2017

I am incredibly excited about the the recent renovations to one of my cabins up in Big Bear, and very pleased with how everything turned out. In late 2015 I bought several cozy cabins in Big Bear Lake, CA and while all they are all awesome in their own way, some needed a little bit of tender loving care to bring them into the 21st century.

After a couple weeks of renovations, many one day trips up to Bear and back, and several dozen trips to hardware store, the immediate work is done. And while there is always something more to do, I am proud to show off “Baby Bear 2017”.

It was a journey. When I bought the home, this unit was tenant occupied and she owned a cat. The place was a wreck. There was cat fur everywhere and traces of kitty litter all over the bedroom and bathroom. The lighting was outdated and the room was very dark. Several floor lamps were required to illuminate the living area and even then it was reminiscent of a mausoleum. The kitchen had a 7 foot ceiling so head space was at a minimum. A drop down room divider prevented light from the living room from breaking into the kitchen, which made the cooking area incredibly dark as well. The kitchen had an all-in-one sink/oven/stove/refrigerator/freeze that I think had been there since the 1960’s if not earlier. Amazingly, this antique still worked, but it was not efficient, and was more suitable for elves than humans. Cabinetry and storage was sparse, and counter top space was non-existent.

We gutted the kitchen entirely. We took it down to the studs and put up new dry wall with a fresh coat of paint. I hauled lightly used cabinets from a kitchen demo a homeowner in La Mesa was doing. For $200 I got an entire kitchen worth of cabinets, almost sink, faucet and garbage disposal, and brand new cabinet stainless steel hardware. Left over tiles from my bathroom remodel in San Diego that had been taking up space in my garage for a decade became the new counter top and back splash, and left over grout from our winter 2016 kitchen remodel helped as well.

The all-in-one appliance was replaced with the new sink, open box but new studio sized gas stove/oven combo, and a studio sized fridge/freezer combo. It still needs a microwave but for the time being, the appliances are almost good to go.

The drop down room divider was removed. It’s amazing the difference that extra 12 inches of unencumbered space has on the brightness of the kitchen. The kitchen is now replete with pots, pans, utensils, glasses and dining ware as well as miscellaneous kitchen nick-knacks like pizza cutters and ice cream scoopers.

The old, cat tainted green carpet was ripped out and replaced with new wood laminate flooring which extends from the living room into the kitchen. This one feature made the whole home brighter even before tinkering with the actual light fixtures. Carpet absorbed light, while the floor reflects it. It makes the room feel more spacious as well.

A new ceiling light/fan combo was mounted high on the ceiling to help illuminate the entire room, which it does nicely. The fan will help circulate the heat in the winter, and the cool air in the stuff.

Jenny replaced some of the older curtains with newer, lighter ones which again brightened up the room. If you haven’t picked up on it yet, this cabin was dark before the renovations. It would have felt like medieval living.

The old linens, pillows, blankets, towels and throws, were replaced with new, lively ones, complete with new mattress and pillow protectors. And we stocked the restroom with nice, thick Charmin toilet paper, none of that cheap single ply for our vacationers!

Several drafts around windows and doors were sealed, and sealed well. Remember, Big Bear days can get down to 30, and Big Bear nights can get down to single digits, so retaining heat is just as important as producing it. A little bit of caulk, foam sealer, and rubber tube gaskets goes a long way. This home is now air tight.

Last but most importantly is the home got a great scrub down. New stuff and niceties won’t last long if things are maintained and even a home complete with top of the line everything can be an utter dump if not clean. Cobwebs be damned! This place is spic and span now.

Am I happy? Absolutely?

Is there more to be done? Always. I do have a laundry list of things I would like to eventually do like insulate the floor and crawlspace, and re-floor the deck. But the immediate future holds a futon sleeper and double pane windows. But for now, I am very pleased with how it all turned out and am looking forward to putting this bad boy to work in 2017.

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Our New Kitchen

It’s been several months and there have been a few bumps along the way but our kitchen remodel is finally done! (well… about 99.9% done) I am very happy with how it all turned out and wanted to share it with everyone.

The first thing to note is that our plans for the kitchen completely changed just before we started the demolition process. We were originally going for a Mediterranean / Tuscan sort of look but at the 11th hour ended up changing directions for a more contemporary look. Cream colored cabinets and marble counter tops were supplanted by a slate and gray tone. Copper, bronze, and cast iron adornments were replaced with stainless steel and brushed nickel. I was initially nervous about the new direction but it all came together rather nicely and now that have it, I wouldn’t change it!

See some photos of what we originally had in mind.

Our Old Kitchen

Prior to the remodel we had a galley kitchen. It was long, narrow, and while it was a good size it made the house feel very compartmentalized and closed off. We had aging (15+ year old) appliances and an oven that didn’t even work. We had a white vinyl laminate over particle board countertop which would permanently stain if you accidentally spilled some ketchup or coffee. The laminate was coming apart at the edges and keeping everything clean was become a hassle. The kitchen cabinets and drawers had not been touched since the 60’s when the house was built and reaching items in the back was the usual pain it had always been – unload every pot and kettle just to get that one sauce pan in the back.

The Demolition and Remodel

There was definitely some trial and error involved in the process. The first thing I would recommend is to have just one chief, or one point of contact for those doing the work, and those doing the hiring. If you are going to have multiple workers or groups of workers performing various tasks/jobs, make sure to assign a lead contact or general contractor for the project, or make sure you are ready to juggle the project yourself.

Some tasks can be completed concurrently (meaning at the same time). Other tasks must be complete consecutively. Proper planning is important, but more important is constant communication with those involved. The goal is to keep the ball constantly moving down the field. The best way to do this is to set expectations and deadlines. If the first step is delayed, that sets back step 2, 3, 4, etc.

Our New Kitchen

Now on to the fun stuff! Our new kitchen is squared away and with a few small exceptions, it is completely done.

Island with Raised Bar

The biggest change all of our friends have noticed is that we got rid of the galley kitchen by knocking out the wall and turning it into a pony wall, and essentially turning half the galley into a sort of island/peninsula. This has really opened up not just the kitchen but the adjoining living room. You know how the kids these days love the open floor plan. On its own, this brightens up the whole house by letting light from various room’s and windows pass into other parts of the house which the walls would normally obstruct. The island and raised bar will also make it great for entertaining. I am excited to have a Christmas or New Year’s Party and see how it all unfolds.

New Appliances

A lot of our older appliances were on their last leg. Our fridge worked but was very loud and (no joke) had pad locks on it from back in college. In my defense, I put the locks on the fridge because I caught someone I didn’t know eating my milk and Oreos. Our sink was small, our oven didn’t even work, and I’m pretty sure the kitchen ceiling light was haunted.

We have a new barn style sink with matching faucet and suction cup sponge holder. The sink came with an elevated ‘drain grill’ which makes it so much easier to prepare food and wash dishes. Our new fridge has an ice maker which I thought was the dumbest thing in the world until I first used it and now I love it. The focal piece of the kitchen is the new stove-oven combo and the accompanying range hood. Our ‘stoven’ is stainless steel with front located controls so you don’t have to reach across a pot of boiling water to turn off the alarm. What I love is that the grill itself is cast iron and just feels super durable. It’ll never scratch or appear dirty, and its two piece design makes clean up breeze. The oven also has a small storage area underneath for pans and cookie sheets.

Hidden Everything

Back in college my friend Brett and I had an ongoing civil war about where the toaster should go. I insisted it stay on the counter, and he would hide it in a cabinet when not in use. Brett would love our new set up which includes an appliance garage for our microwave. Accessible when you need it. Hidden when you don’t. We also have a pull out spice rack next to the stove, and massive pull out drawers for all of our heavy pots and pans. No more digging in the back and clanking heavy items together to get that one pot/pan/lid/skillet. Our trashcan is also neatly hidden in what looks like a normal drawer, and he has a new buddy – a recycle bin! This is huge for me because we recycle more than we throw away and this will save me hourly trips to the recycle bin we had in the garage.

Our old kitchen had those long, industrial style tube lights. They were horrible and always flickered. Turning on the lights in the middle of the night for a glass of water resembled a horror movie strobe light scene. We now have six recessed canned lights and new, energy efficient LED bulbs. They turn on in an instant, are dimmable, and don’t look like those ugly squiggly ones that were all the rage a decade ago.

With the exception of our GFI outlet, all of our kitchen outlets have two USB ports for charging cell phones and other modern devices like tablets, speakers, etc. Being ‘prepper minded’ we also put USB outlets in three cupboards so that we could charge things like emergency flashlights and radios without being an eye sore. Costco also had some nifty night lights on sale, which go well with our kitchen and living room.

Highlights of our new kitchen

Contemporary look

  • Stainless steel, glass, and slate color palette
  • Extra large floor tiles with thin, darker grout
  • Open floor plan with raised bar and floating range hood
  • Permanent wall was replaced with pony wall, and covered in wood textured wall tile for easy cleanup

Modern touch

  • Industrial faucet
  • Ultra-quiet garbage disposal
  • GFI outlet
  • USB outlets
  • Appliance garage
  • Slide out spice rack
  • Stainless Steel appliances, including sink, faucet, fridge, oven/stove, dishwasher
  • Stainless Steel hardware an accents, including handles, knobs, outlet and light switch covers, door stops, and countertop accessories

Ounce of prevention

  • GFI outlet
  • Shelf liner for all shelves and drawers
  • Under sink “floor mat” to prevent any spills and leaks from damaging the cabinets
  • Fridge door stops
  • Cabinet door stops
  • Slow-close doors and drawers, and drawer bumpers

Final Words

I was getting a little frustrated at the length of time the project took, but with everything said and done I am extremely satisfied with the results. The new kitchen looks gorgeous and I use it much more often than I did previously. It’s great being able to cook on the stove and see in to the back yard. Or just to be in the kitchen and have it not feel like a crypt.

The new counter tops don’t stain like our old vinyl ones, and that combined with the counter to ceiling stone backsplash, stone counter, stone bar, wall tile on the bar, and sealed grout, everything makes for a much easier clean up post-cooking. We’ve had a few people over for random shindigs and everyone seems to like it.

So far, smudging on the stainless steel hasn’t been a problem, but time will tell.

Our stove, oven, sink, faucet, and garbage disposal are beasts and I think they’ll stand the test of time. The fridge I feel has been under used, and we haven’t used our dishwasher even once in the ~4 weeks the kitchen has been done, so lord knows if it even works.

Jenny naturally had to put everything is a completely different place than it was before and after a month I still have trouble remembering where things are. WHERE’S MY SNACK PACK?!

I’m very happy we got it done, I’m thrilled with the outcome, and hopefully we can have more friends and family over to help us break it in!

See all the finished kitchen (and fireplace) photos below.

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

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.

Asparagus Pee

The ultimate sneak attack. The unpleasant surprise. It was just a quick helping. A small serving. I barely even nibbled on the appetizer with the Johnson family last night. But you make your way home and eventually nature calls, as it always does. Then like an aromatic demon ninja, the odor hits you. Sharp and pungent like a throwing star straight to your nose. Your nostrils flare with disgust. Your skin between your eyes bunches. You protest but you are stuck on the porcelain throne for at least another minute. The asparagus pee strikes again and it has taken your innocence with you.

But seriously though. A certain someone who shall not be named sneaks asparagus in to freakin’ ev-ry-thiiiiiing. I’ll have completely forgotten that I even had asparagus that day and then sure enough you make your way to the head, let ‘er rip, and struggle for air.

But the worst is when you have it for dinner and don’t use the John until the next morning. Delirious and still half asleep at 6AM you make it rain, and then it hits you. That’s the worst because none of your senses were on and operational to begin with, and without warning your sense of smell is suddenly jolted as if by an 8.0 earthquake.

You asparagus! You screwed it up! Ah, damn you! God damn you all to hell!

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

Arguments Against Minimum Wage Hikes

This is by no means a formal thesis on my stance against increasing minimum wage. Sorry, no statistics, no numbers, no conclusive studies from universities. Just reasoning, common sense, and personal experience.

As always, I have to give a stupid disclaimer. No, I do not think that everyone who earns minimum wage is an idiot, or lazy, or a bad person, or deserves a shitty life. That’s not my opinion. But it doesn’t affect my stance on the issue one bit. Sorry, pulling no punches this time.

Why am I against increasing the minimum wage? Read on.

Employees are Expensive

When people think employment they think of words like company, enterprise, corporation, which all have negative connotations and stir up imagery of monstrous evil entities with gazillions of dollars just laying around. I work for a corporation, and it employs two people, my mom and me.

Expensive personFor many businesses, labor is a HUGE expense. I don’t know percentages. And it doesn’t matter what percentage of operating costs are for labor, but it’s big, and relevant. How do I know? Go to any small mom n’ pop business in your local neighborhood. How many people do you see working there that aren’t owners? 1? 2? None?

If labor costs were the drop in the bucket that Wage Hikers make them out to be then every business on Mainstreet would be flooded with employees. But they aren’t. Because employees are fucking expensive.

And were not just talking their hourly or salary, but also their benefits, their PTO, workers compensation, and then paying unemployment once they no longer even work for you. Then, you add on top of it that employees these days are usually lazy and check their social media accounts for 4 hours, spend an hour in the bathroom, and do a half ass job the remaining hours, you realize that you’re paying your employees 8 hours for 2 hours of work.

Labor Costs Outpace Consumerism and Revenue

The big “counter attack” to the point above is “Well if employers pay workers more, then they can afford to buy more and then more people buy from that business and the business makes more money, and so then it all works out.

The premise is horrible for a multitude of reasons.

  1. It assumes that business revenue will increase. Big assumption. Higher labor could mean higher product costs, which could very well result in less customers, less sales, and therefore less revenue.
  2. It assumes that business revenue will increase immediately. Labor is an upfront cost. Meaning even if business will improve weeks, months, or years later, business can’t write I.O.U.s to their employees and wait for that increased revenue to come in. I have to pay my staff NOW. For many businesses they simply do not have money laying around to pay their workers more. It’s not a matter of fairness or equality. It’s a matter of accounting and budgeting.
  3. It assumes that business revenue will increase for every business. Even if certain businesses do see an increase in revenue, it will not be all businesses. The only businesses that will do better are those which hire low wage workers and whose consumer base is also low wage workers. So for example, fast food joints and movie theaters. Businesses that hire entry level workers but attract well-to-do clientele will not benefit from this at all. So the majority of businesses that cater to homeowners, the housing industry, contractors, real estate, will see their labor costs go up without a coinciding increase in volume or revenue.

People are Hired Based on Merit, not Circumstance

Yeah, yeah. Such-and-such lady is a single mom with two kids and she works four jobs and still can’t make a decent living at the current minimum wage, feel bad, yada yada.

And? Since when are people paid based on their circumstances, and not on their merit? What difference does someone’s sob story make? If and when I ever hire someone, the only thing I will care about is what can you do for me? How are you going to make me more money? Why should I pay you X amount? Now prove it.

If anything else mattered, people wouldn’t send in resumes and applications when looking for a job. Employers would ask candidates “How shitty is your life?” and then pay then commensurate with how shitty of a life they have. But that’s not the way it works because it doesn’t matter.

People Aren’t (Always) Worth Minimum Wage

LA recently increased their minimum wage to $15 per hour. A landslide victory for underqualified workers!

pay

Sometimes I consider hiring someone to help me out with simple tasks like writing thank you cards. My penmanship is absolute shit. I can barely read my own handwriting so that seems like a task worthy of being outsourced. Plus, it takes me forever. Why spend 5 hours writing thank you cards which is maybe $10 work, when I can writing policies which is $200 work?

Okay, so a card writer to work for three hours tops. What qualifications do they need?

  1. Good penmanship
  2. A pulse

That’s it.

Why the hell and I am going to pay someone $15 per hour to write thank you cards?

It Ruins the Pool of Candidates

Building on the previous point, not everyone is worth $15, $20, or even $10 per hour. Fact.

But having a lower minimum wage made it easier to distinguish between different tiers of workers when looking for someone to fill an opening in your business.

A $10 job attracted $10 workers. A $25 job attracted $25 workers.

Let’s say I was looking for an entry level position, again, to write thank you cards day in and day out. That’s their only job. It’s a $10 job, meaning the job is so simple that there’s no benefit to me to pay more than that, regardless of how qualified someone is. I post an opening on Craigslist and get a dozen or so people interested in the position. Let’s review the competition:

Candidate 1 – Very Overqualified: One girl is a grad student who expects $20 per hour. She’s got a bachelors in business administration and very qualified in her own right. Fair enough. She is worth $20 per hour, but my labor is not. I won’t pay $20 for $10 work. Pass.

Candidate 2 – Slightly Overqualified: This girl is still in college working on her undergrad. She doesn’t have a whole lot of experience but she’s working at it, and has good handwriting. She’s also bilingual. She’s worth $15 per hour. But again, I have a $10 job, so she is slightly over qualified. Pass.

Candidate 3 – Quality Match: Then comes some woman, 40 years old. Never graduated high school. Dropped out and had 2 kids. No college. Monolingual. But she does have great handwriting and low and behold, she has a pulse! We have a winner! But, oh shit, I forgot. Minimum wage is $15.

Now I am forced to pay someone $15, even if it is to do $10 work.

You would think this is a victory for the Wage Hikers. They think, “Aha! Andrew is now forced to hire this woman worth $10 per hour to work for him and pay her $15 per hour! Buahahahah! Our misguided plan has worked, and now low skilled people can get jobs paying higher wages! BRILLANT!

But hold on one second… that’s not exactly how it works…. Read on.

It Screws Low Skilled Workers

You can pass a law that increases minimum wage, but you can’t snap your fingers and improve the work force in a flash.

Minimum wage or not, I’m not going to hire a $10 worker for $15 per hour. For $10 per hour, Candidate 3 would have been a great choice, and she would have got the job. She’s worth $10 per hour, and I was willing to pay her $10 per hour.

Gun to my head, if I am forced to pay someone more money, I am going to find a worker who is worth it. Which means sorry Candidate 3, I’m stepping over you and moving straight to Candidate 2. True, I didn’t originally need to someone with college experience and who speaks two languages. However, if I am going spend a certain amount of money I am going to get every ounce of employee I can and sure they are worth every dime.

Example: If I was forced to spend $50,000 on a car, I would not have bought my $25,000 Nissan Xterra. I would have made sure to get a car that was worth the $50,000, such as a Land Rover, or fully loaded Jeep Cherokee.

The minimum wage changed. The candidates did not. When you raise the minimum wage, employers are going to stop hiring entry level workers and go straight to more qualified people who in their eyes would have been worth $15 per hour prior to the wage hike.

Employers are not going to suddenly stop thinking logically, and pay more money for the same labor. If they’re forced to pay better wages, they’ll get better workers, and they’ll fire their current work force without hesitation. Every candidate whose labor is worth less than the new minimum wage is going to have a very hard time finding a job and keeping it.

Conclusion

The long and short of it is that increasing minimum wage might help some people get paid more. But others will lose their jobs and either be replaced, or the employer might just decide to do without their position. It hurts the very people it intends to help. So it’s bad for employees.

It will also reduce consumption, and making hiring more difficult, so it’s bad for businesses.

Prices for goods and services will go up, so it’s bad for consumers.

When someone is bad for everyone, I don’t