Could the failure of the “Big 3″ cause a depression?

That’s what a Chrysler executive claims:

“We’re on the brink with the U.S. auto manufacturing industry,” Press told The Associated Press in an interview. “If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it’s a huge blow. It could trigger a depression.”

I’m not sure about that but I am sure that it’s in this executive’s best interest to paint as bleak of a picture as possible in order to get his bailout. What do you think?

I’m sure failure would not be good. But, as we’ve talked about before, we can’t just give money to the automakers and allow them to carry on business as usual. Big changes need to be made and now is as good a time as any to make those changes. These changes have needed to be made for years but the current crisis really brought them to light.

Please weigh in with your opinion.

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Live Search Cash Back is a new Microsoft initiative that is supposed to provide a rebate to consumers for items found via the Microsoft Live search functionality and purchased online.

The word on the street says this is Microsoft’s attempt to compete with Google in the online search market.  The concept is that in return for being listed in Microsoft’s search results, merchants have to offer cash back to consumers instead of paying Microsoft for placement.  Microsoft doesn’t make any money off of the transaction but their hope is that more users will start using Live Search instead of competitors such as Google.

Shopping Comparison Features
 Always looking to save a few bucks, I poked around the Live Search cash back interface to see if it would be useful for me.  I’m in the market for some new jogging shoes so I typed in “nike mens running shoes”. Unfortunately, the search interface is lacking basic functionality that all Web users have come to expect.  For example:

• You can’t order search results by price, seller reputation, or product rating
• You can’t specify a price range for the product
• Default 16 items shown per page. You can’t opt to see more items on one page
• You can’t choose whether to see a list vs more detailed view of results

Retailer Options
Once I scrolled through 16 pages of results to find the lowest price shoe, it only showed me results from two different online stores.  I guess one of the drawbacks of only including retailers that offer cash back is that your comparison is limited to the number of retailers that participate in the program.  How do I know that there aren’t other merchants that offer the same shoe online for a lower price?  They may not offer cash back but the shoe may be cheaper in the first place, saving the hassle of the rebate all together.

Rebate Hassles
Once I chose the store with the lowest price and best rebate I clicked through the “Go To Store” button.  I was taken to the merchant page where I could complete the transaction.  You aren’t given the discounted price at checkout, first the retailer has to report the sale to Microsoft.  Here’s the description of the cash back process from Microsoft’s terms & conditions:

“Within seven days after a qualifying purchase is reported to us, we will list the purchase in your account with a status of “pending.” The purchase will stay in pending status for a period of 60 days to account for returns, refunds, fraud and other processing issues. After this point, if the purchase is eligible for awards, it will be marked as “available” in your account and the associated awards will be eligible for redemption as described below. You must ensure that we properly post awards to your account. If you believe that you have earned awards that are not posted to your account, we will not consider posting them to your account unless you contact us within six months after the date of the associated purchase. We may require reasonable documentation to support your claim.”

Sounds more like hassling with a rebate than a cash back program to me.  The money may show up in your account but if it doesn’t you have to do the work of following up for months afterwards to make sure you get your cash back.  Similar to a rebate, you’re paying tax on the full purchase price, even though you might get cash back down the road.  I say might because Microsoft has a list of reasons that disqualify you from cash back:

“You will not earn cash back awards on purchases where (a) you open the store’s web site in a different web browser; (b) your browser is not configured to accept cookies; (c) the purchase is not completed in the same web browsing session (not to exceed 24 hours) initiated by clicking on the eligible advertisement or listing; (d) the order is later cancelled or the goods or services are later returned; (e) the store does not report the purchase to Microsoft; (f) the goods or services are acquired for resale or other business purposes; or (g) you also use a separate discount or coupon.”

A little bit further in the terms and conditions there is more language that could foreshadow difficulty claiming cash back.

“There may be additional limitations on purchases on certain merchant sites, and those limitations will be disclosed on the merchant site. Your participation in the Live Search cashback service on such merchant sites will be subject to these terms and conditions as well as any additional ones disclosed on the merchant site. In the event of a conflict between any of these terms and conditions and those disclosed on the merchant site, the ones disclosed on the merchant site will apply and control.”

Live Search Summary
The limited shopping comparison features, limited retailer options, and the whole lengthy rebate process are enough to discourage me from trying the Live Search Cashback for now.   The final deciding factor for me is that you have to sign up for a Windows Live ID in order to participate in the cashback program.  I have enough user id’s already, I don’t need anymore. 

For now I’ll continue to use Google web search and Google product search when I’m shopping for items online.  I’ll just keep my eyes open for deals and sales and get my discounts that way rather than go through the whole Live Search cashback ordeal.  Hopefully, Microsoft will enhance their search functionality, add more retailers, and make the cashback process less worrisome. Until then, I’ll rely on Google’s expertise to help me find the best deals.

Al Gores whole basic theory is based on the LIE that CO2 causes global tempertures to rise.

Are record cold temperatures an indication of global cooling or a new ice age? NO

Are record cold temperatures an indication of global cooling or a new ice age? NO.

Fact: Carbon Dioxide levels in the atmosphere are at a record high, not just in human history, but in the geological record for the last 600,000 years Is this increased carbon dioxide the result of human activity? Almost certainly. We are digging up coal and pumping up oil that was buried over hundreds of millions of years. We are dumping the spent products of combustion into the atmosphere pretty quickly. Before we have exhausted the world's supply of coal and oil, we will raise carbon dioxide even higher.

Fact: Carbon Dioxide levels and global ice volume are inversely proportional in the geological record for the last 400,000 years.

Does Carbon Dioxide itself cause temperature to rise?

That is the popular theory. There is no appearent correlation between carbon dioxide and global temperature in longer term studies for the last 500,000,000 years (Nir J. Shaviv, Ján Veizer, "Celestial driver of Phanerozoic climate?" Geological Society of America Today 13:7 July 2003 p4-10). Actual temperature increase, measured by methods that may be tainted by the Urban Heat Island Effect, still show an increase less than 0.5C since 1880. While carbon dioxide content in the atmosphere has gone up continuously for more than 100 years, average global temperatures have risen as well as fallen during that period.

The drop in carbon dioxide levels observed during the ice ages may have caused the ice age, may be caused by the ice age or both may have a common cause, but are otherwise unrelated. Scientific analysis of the correlation between temperature and carbon dioxide indicate that rising temperatures PRECEDE carbon dioxide increases by about 800 years, suggesting that temperature causes carbon dioxide to rise, which is not the position of global warming theorists. (Caillon et al, "Timing of Atmospheric CO and Antarctic Temperature Changes Across Termination III", Science v299, March 2003, p1728-1731).

Global Temperature changes correspond more accurately to changes in solar activity than they do to the continuous rise in carbon dioxide during the last hundred years. (Friis-Christensen et al, "Length of the solar cycle: An indicator of solar activity closely associated with climate", Science, v254, 1991, p698-700) There is some evidence these data sets have begun to diverge in recent years, but the data is only published on the internet, not in scientific review journals. Current scientific data cannot be easily interpreted to portend global warming. Mathematical models can be constructed to project future temperature changes many different ways, but those mathematical models projecting large increases are considered "realistic" while straight line projections (which aren't very scary) are not popular, possibly because they are not exciting.

Is increased carbon dioxide bad for the environment if it has no effect on global temperature? No.

Carbon dioxide is a necessary nutrient that plants depend upon. Carbon Dioxide levels many times higher than current levels on earth improve plant growth and vitality. A significant portion of the increased farming productivity observed during the last 50 years may not be due to pestisides or improved techniques, but to the increasing levels of carbon dioxide in the atmosphere. (Sherwood B. Idso, Bruce A. Kimball, "Tree Growth in Carbon Dioxide Enriched Air and Its Implications for Global Carbon Cycling and Maximum Levels of Atmospheric CO2," Global Biogeochemical Cycles, 7(1993):3:537-555, p. 537-5380)

Is increased temperature bad for the earth?

In and of itself, temperature increase would not be bad. Longer growing seasons and increases in arable land would improve crop yields even more and increase the earths sustainable population. In the 1970s, when a broad consensus of scientific opinion and projections suggested the earth was rapidly cooling, mass-starvation was a cause for worry, but global warming would not have that particular effect.

For the non-human population of the earth, over hundreds or thousands of years global warming would change the viablility of species. Plants and animals would migrate, adapt or become extinct. Would it be worse, i.e. more deadly, than the ice ages that have fallen over the whole earth 4 times in the last 400,000 years? That would depend on the quickness with which the climate changes.

Global sealevels have been rising continuously for several centuries at a rate of 1-2mm per year. An acceleration of the rise in global sealevels would have a more significant effect than slower rates, but coastal cities will be forced to change with the times either way. Sea levels 18,000 years ago were 100 meters lower than they are today. Sea level has risen an average of 5.6mm per year for the last 18,000 years, so we are actually in a rather slow period geologically as far as sea level changes. During the "Little Ice Age" of 1650 to 1850, the rate of sea level rise was virtually halted, but we have now moved back into a relatively warmer period and sea levels are rising once again, but not yet at thier historical clip. About 3.5 million years ago, sea levels were around 30 meters higher than today.

The earth will change and we will change with it. Some of the changes we may cause, but other changes will be out of our hands. Change is not necessarily good or bad. Slow change is inevitable. The earth can adapt and so can we.

About the Author

Steve Johnson is writes on a large variety of subjects and topics. Currently Steve is involved in The Truth About Iraq

1. Bring your ads to the store. Many stores offer “lowest price” guarantees, but you need to bring proof to get your product for a lower price.

2. Ask for a gift receipt. If you’re buying somebody a present, this is a big deal. No gift receipt means people might get stuck with a gift they don’t want/need.

3. Early bird discounts. If you’re going to save “big” money, the only way you’re going to do it is to show up early. Usually stores have the huge deals 5am-11am or so.

4. Don’t feel obligated to buy something. If you get to the store too late and all the items you wanted are sold out, don’t feel the need to still buy something at a regular price. That’s the big “scam” of Black Friday. Stores have a handful of items at low prices, then want you to buy everything else at the regular price once they’ve got you in there.

- Edwin, CashTheChecks.com

There is so much bad news floating around, so much to be worried or angry or upset about in the world. However there is a lot to be grateful for as well, so I thought I would take a moment and count a few blessings. This may be a bit late, considering Thanksgiving was a week ago, but I suppose it is never a bad time to be grateful.

A few quotes on the subject I have read recently:

“Life isn’t fair, but it’s still good.” - Unknown (to me)

“To be grateful is to recognize the love of God in everything He has given us-and He has given us everything.”-Thomas Merton

Now you may not be religious, but that last quote really struck me when I read it. It reminds me to take the bad with the good, and to appreciate it. It might seem wrong or even stupid to try to appreciate what seems unfair, bad, or even evil, but it is possible - and important. We can learn and grow and change for the better as a result of every experience - be it sickness, recession, job loss, or even death.

I once overheard my mother say that having cancer was a huge blessing. I recoiled, but she explained that it brought our family closer together and made her realize her inner strength. Remembering that comment has always kept me in check when I find myself whining or self-pitying.

Things for which I am grateful:

• Having a job and a regular paycheck; not everyone does right now.
• Not having to worry about where I’ll get my next meal or bath.
• Having the means and time to give to others who need support.
• A large family which supports and uplifts me.
• The freedom and ability to learn and pursue whatever I choose.

Many in our country are struggling, some for the first time, as our economy sags and companies lay people off and wages stagnate. Of course we are all still much better off than many in the world, but is still natural and easy to worry, to complain, to be angry and even scared.

But struggles can bring us together, and they can encourage us remember what’s really important - what matters a lot more than the 401k balance or the big bonus check. I hope as this volatile year comes to an end that we can all find some things to be truly grateful for.

More from Meg at The World of Wealth

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How much of your money is in domestic stocks? What percentage of your portfolio is invested internationally?  If you’re like many average investors in the US the majority of your investments are in US companies.

Global Investing Seminar
I attended a seminar on global investing yesterday and it really made me think a little harder about our current exposure to international investments.  I had to keep in mind it was presented by a financial company that runs a global fund, so the point of the seminar was to reinforce the importance of international investing in the minds of current and potential investors.

However, they did cover some interesting statistics that apply no matter what investment vehicle you use to diversify overseas.  They fed us lunch so I didn’t get to write down all the statistics since I was busy feeding my face but I still remember the general concepts.

Global Growth Trends
One of the graphs was from a Morgan Stanley study that looked at the total value of US public companies compared to the total value of international companies.  The graphic showed the value in approximately 20 year time intervals: 1988, 2008, and 2030 projected. 

I wish I had the exact numbers but the overall trend showed a global economy that was dominated by American companies in 1988, maybe about 2/3 of the global corporate value was in the US,  but the estimates for 2030 approximated US companies making up only a quarter of corporate capital markets.

Of course the numbers aren’t exact but I think the trend is definitely accurate and that the US position as the world’s financial superpower is slipping.  While this may not be great news for us as consumers or workers, it does present an opportunity for us as investors.

Evaluating International Markets
The speaker worked for a global fund, his role is to fly around the world visiting and evaluating companies that the fund is considering putting money into. He walked us through his fund’s investment positions in the various global regions, explaining their reasoning behind being underweight in places like Great Britain and overweight in places like Taiwan and South Korea.  He definitely pointed to Asia as the region with highest potential for growth over the next two decades.

He gave some staggering statistics on the sheer size of the Chinese consumer and business market and the enormous potential for growth there.  He also commented on the enormous currency reserves the Chinese government has built up and all the money they need to spend on infrastructure.

However, the speaker went on to warn us that the Chinese markets are overpriced, in his opinion, due to a massive runup in the stocks of Chinese companies over the last few years.  He had the same caution for stocks in India, that the price earning (PE) valuations were higher than they wanted to pay.  His company is looking for opportunities in areas like Taiwan or South Korea where the PE ratios are much lower.

Risks of Investing Internationally
The truth is we live in a global economy and changes around the world can effect how US companies perform so even domestic investments are influenced to an extent by international markets.  However, if you decide to put your money in a foreign company your investment is suddenly influenced heavily by regional events, currency fluctuations, and the policies of the foreign government. 

If you’re investing in an emerging market where there is large amount of growth there’s also typically a lot of change both economically and politically that can potentially put your investment at risk. Although there are risks associated with global investing, in my opinion they are definitely worth the opportunity to benefit from the growth in economies around the world. 

You wouldn’t want to put all of your money into international companies, just make them a part of your investment portfolio.  Several years ago about 10% of our portfolio was in international funds when I increased it to around 15% and now I’m looking to raise the percentage even higher.  How much exposure you want to international markets is up to your situation but it’s definitely something you should at least look into.

How to Invest Internationally
So how can you put your money into companies overseas?  The easiest way is to buy an international ETF or mutual fund.  The approach I decided to take several years ago was to invest in multiple international funds.  I choose an option from my 401k, Dodge & Cox International Stock (DODFX), one from my wife’s 403b, American Century Intl Growth (TWIEX), and also opened a non-retirement account with Oakmark International (OAKIX).

Dodge & Cox International Stock has done the best for us. American Century Intl Growth has been decent but nowhere near the performance of the Dodge and Cox fund.

Oakmark International had been going gangbusters until last December when it took a big hit.  I had been debating between the Oakmark fund and the Vanguard Total International Stock Index Fund (VGTSX) back in early 2003. 

Our financial advisor recommended Vanguard but I went with Oakmark instead.  As the graph shows, I’d be wealthier if I’d have listened to her, I guess hindsight is 20/20.  The Total International Stock Index Fund is actually composed of investments in three other Vanguard international indexes:

• Vanguard European Stock Index Fund
• Vanguard Pacific Stock Index Fund
• Vanguard Emerging Markets Stock Index Fund

The fund is a simple way to gain exposure to a variety of markets all over the world.  There are many other international funds available so you have lots to choose from.

One other option I’m considering for investing overseas is opening an account with ETrade to take advantage of their online global trading.  This would be a different approach than the mutual fund route which would require more research and carry more risk.  It would allow me to invest directly in companies in Canada, France, Germany, Hong Kong, Japan and the United Kingdom.

International Investing Summary
Whatever approach you decide to take, I’d recommend at least reading up on the growth of economies outside our borders and how you can invest in them.  As I mentioned in the beginning, the long term trend is that international companies are growing to compose more and more of the investment options available to you and all the other investors in the world.  In order to diversify your portfolio and benefit from global growth consider taking a look at your international investment options.

If you’re covered by a health plan, you’ve probably encountered the words deductible, co-pay, and co-insurance a number of times when examining your bills, paying your doctor for a visit, or simply looking at the benefits package from your employer. These terms can be a bit confusing, and with all of the limits, maximums, and different coverage options, it is important to understand what they mean so you can obtain the best coverage for the right price.

When looking at your health insurance options, it’s important to go beyond the premium. The premium is the amount you pay each paycheck or month just to have the coverage. Obviously, you want the lowest premium you can get for the coverage you want, but you really need to look beyond that. Saving $20 a month on your insurance premium may end up costing you hundreds of dollars in co-pays or out-of-pocket expenses. So, let’s take a look at how you can make sense of all these terms.

Defining the Terms

Deductible

This is probably the most straightforward, and easiest ways to change the premium on your policy. The deductible is the amount that you need to pay for a claim before the insurance kicks in. If you have a $50 deductible and you are billed for $500 in services, you’d need to pay $50 out of pocket before the remainder is sent off to the insurance company.

Obviously, the higher the deductible you choose, the lower your premium will be since you’ll be covering more of the expenses out of pocket. So, you have to be careful. If you choose a high deductible in an effort to keep premium costs down, a period of poor health or unexpected medical treatments could add up quickly.

Don’t forget the maximums. Deductibles usually have an annual maximum, for both individuals and families. When comparing plans or options within your plan, determine how likely it would be that you’d reach those maximums, and if two plans have different maximums, think about which one provides the best cost-to-benefit ratio.

Co-pay and Co-insurance

The co-pay is probably another common term you’ve heard, and have probably paid a number of times without thinking much of it. Co-pay and co-insurance are basically the same thing, but cover different items. In either case, this is the amount of money you have to pay for a claim or service rendered. The difference is that a co-pay is typically a flat dollar amount for a specific item such as an office visit, exam, or prescription. Co-insurance is typically based on a percentage. This means that you’re responsible for a certain percentage of a claim, and the insurance provider is responsible for the rest.

Again, when comparing plans, the co-pay amount or co-insurance percentage can play a big role in how much your premium is. A plan with an 80/20 co-insurance (insurance company pays 80%, you pay 20%) will have a higher premium than a 50/50 plan, and so on.

Compare All the Numbers

So, when you’re exploring your health insurance options, it pays to look at more than the premium. While the premium directly affects your bottom line, saving a few dollars on the premium could cost you much more in the long run, and paying a higher premium for coverage you might not need may also cost an unnecessary bundle.

This is especially important if you have a certain condition that requires specific tests or drugs, or if you are planning on having a baby, as the amount of coverage provided for these items may require digging a little deeper than glancing at your premium. So, take the time to completely understand your health benefits, and you can be sure that you’re getting as much coverage as you need, and paying no more than you have to.

Comparing Deductible, Co-Pay, and Co-insurance When Looking at Your Health Insurance Benefit Options

My sister-in-law has cancer.

Last week, a biopsy revealed that Stephanie has a cancerous lump on her thyroid. She’ll likely have her thyroid removed, meaning she’ll need to take medication for the rest of her life. (She’s 37 years old.) She’ll also probably need a handful of radioactive iodine chemotherapy treatments.

Prognosis positive
Jeff and Stephanie have both settled down a bit after the initial scare. They’ve heard from many sources, including Steph’s grandmother, that this form (and location) of cancer is easy to eliminate, and has a low chance of spreading or recurring. Steph’s grandmother had her thyroid removed years ago (due to a growth on it), and she is now 77 years old.

Still, this is cancer, which no member of my family takes lightly. My father died from cancer ten days before his fiftieth birthday. Last summer, cancer killed a cousin at age 47. Other family members have died from the disease as well.

A lucky mistake
A situation like this has enormous personal finance implications. Steph’s case is especially interesting because it demonstrates that sometimes the “right choice” isn’t.

Before the birth of their daughter in February 2006, Stephanie obtained a supplemental hospital/short-term disability insurance policy because she knew she would need a C-section. After Emily was born, Steph tried to cancel the policy, but the agent talked her into switching to a cheaper cancer/accident policy instead.

Inspired in part by Get Rich Slowly, Jeff and Steph have been taking control of their personal finances. This past May, when it came time for her office to renew policies, Stephanie asked to have her cancer/accident policy canceled because she wanted to save the $70 recurring monthly expense.

After the cancer diagnosis came through, Jeff and Stephanie were kicking themselves for having canceled the policy — it would have offset some of their upcoming costs. Then Steph remembered that both of her June paycheck stubs still had the deductions listed. She called her agent to see if her policies were still in force. Sure enough, the official cancel date was July 1st, so the agent was able to revoke the cancelation.

“I don’t know if it will pay out enough to compensate for all the premiums we’ve paid in the last two years,” Jeff writes, “but at this point I don’t care. If it helps with the medical bills that are bound to accrue, that’s all that matters.”

A calculated risk
Stephanie’s situation highlights just how difficult it can be to know how much (and what kind of) insurance to carry. It seemed unlikely that she’d need the cancer policy, so she canceled it. From a Big Picture perspective, this was probably the right decision. But in her individual circumstance, it turned out to be the wrong move.

Last fall, in his brief introduction to insurance, Aaron Pinkston wrote that “insurance is the cheapest and most immediate way for a person to displace risks that are too great to assume individually”. That is, insurance allows groups to pool their money to offset unexpected large individual costs.

But how can you decide how much insurance you need? And what types? Later today, I’ll share a guest post about making informed insurance choices.

Meanwhile, friends and family are ready to help Jeff and Stephanie through this crisis. And although they have bigger things to worry about, it gives them a degree of comfort to know they have a little insurance to help with the financial challenges that loom ahead.

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Related Articles at Get Rich Slowly:

• Ask the Readers: Personal Finance During a Health Crisis?
• Daily Roundup: Bringing Home the Bacon Edition
• Daily Links: My Favorite Stories from the Past Two Years
• Drama in Real Life: “You’re Fired!”
• Get Rich Slowly’s Greatest Hits (2007 Edition)

Since reading some comments on my last post, I had been thinking about what this whole deal with “personal finance” is about; is it about making the most amount of money? or is it about saving the most amount of money? or is it about spending the least amount of money? or is it about reducing stress due to money matters? or is it about this obscure concept called “financial freedom”?

The more I think about it, the less specific I get about possible “correct” answers to that question. In fact, looking back at my life, it seems that at different times, a different answer suited me depending on my financial and personal situation at that time.

What came out of this thought process was the realization that personal finance is not just about “maximizing money” - as I used to think earlier - and like most people probably think about it.

It’s not about maximizing. It’s about optimizing.

Given a financial situation, personal finance is about making the best of that situation. Sometimes it means trying to make as much money as you can, and at other times it means trying to make your money work to make you more efficient by reducing your stress, and at some other times it means that you save every penny to make sure that your children don’t inherit your burden of debt.

There is nothing wrong in trying to “maximize money”, but it is important to realize that, depending on your personal situation, there are costs (in terms of stress and time) associated with trying to do that.

Examples are numerous (but vague and difficult to explain) in this area, but a simple one would be to think of a job in which you are paid overtime. Every extra hour you work might mean that you will become richer than the previous hour, but it does not mean that you would be stress-free - or that you would be able to devote enough time to your family. If you overdo it, it wouldn’t be too hard to make yourself and your family feel miserable even with the extra money you earn.

Working your ass off for a few extra bucks might be a good idea when you are a bachelor with hardly any cares in the world, but if you are a family man, then you might be better off by working a little less in lieu of spending a little more time with your family. Now, just because you gave up that little extra money to spend time with your family or to reduce your stress, it does not mean that you are careless or frivolous with your personal finances. In other words, just because you chase every penny, it does not mean that you are an epitome of financially astute people.

In general, for the sake of the betterment of the whole universe and your own self, try optimizing your money instead of maximizing it. It also helps to reevaluate our understanding of “personal finance” in perspective of our changing personal situation and revise our money-chasing efforts accordingly.

Duh!

Finance Findings is Binary Dollar’s periodic link dump.

• Zecco IS Cheap [Sun’s Financial Diary]
• Traditional Jobs For Men And Women And The Gender Divide [Digerati Life]
• Practicing Basic Tax Diversification [Tao]
• How to Talk Your Way into Debt [Money Smart Life]
• Lazyman’s Prosper Update [Lazy Man and Money]
• Don?t Be Fooled Into Thinking an Oil Change Every 3,000 Miles Is Necessary [Generation X Finance]
• Are Inflated Shipping Charges On eBay Bad? [Mighty Bargain Hunter]
• Why You Need a Budget [Free Money Finance]
• Are You a 0% Credit Card Daredevil? [Five Cent Nickel]
• GEICO Paid Out A Fraudulent Claim [Blueprint]

Send your submissions for Finance Findings to henry@binarydollar.com.

Sponsor: Parlayer - Henry and Matt blog about sports and stuff.

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With the economy in recession, the stock market down, and companies trying to turn a profit, a lot of employers have started to cut back. For some, it might mean eliminating the company Christmas party, while other companies are making massive layoffs or cutting pay.

I’ve noticed a few things getting cut from our regular company expenditures this year, and after talking to friends and family, I’m hearing of even more. For instance, our annual conference was canceled. We generally all head somewhere warm for a week to round up all of the employees in our division, hold workshops, get updates on the company, and do some team building. That’s out. In addition, there have been some little items eliminated such as holiday gifts for some clients. So, while it isn’t anything drastic, there are some cuts being made.

From others I’ve talked to, I’ve heard of canceled Christmas parties and other holiday events. But some are even going a step further and making changes to expense reimbursement limits. In some cases this is a lower limit allowed for expensing meals, or cutting back on mileage reimbursement. Depending on how much of your job involves traveling, this could become a significant burden.

So, I’m just wondering if anyone else has noticed any cutbacks where they work. If things are being cut, are they just little things, or will these cuts directly affect your bottom line?

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

Poll: Are You Noticing Any Cutbacks at Your Job?

Okay I admit it? I used to be an active ?chatter? in a local chat room on Yahoo. It was a room where many people from the Dallas area met up to?Chat. Many of us had met outside of the cyber room at local restaurants, clubs and the like.

Yahoo had recently shut down a lot of the member created chat rooms in the wake of all the negativity and sponsor lawsuits. Lets face it?The public opinion of chat rooms was not good. I was a virtual unknown person to most chatters because I stayed away from the ?in person? socials but, that all changed one morning. Here is what happened:

A room regular was talking on ?voice? and venting about his house early one morning and I was listening a few steps away making my breakfast. This is what ?Monte? said, ?I got this letter from some attorney who says he is going to sell my house! How does he think he can do that? He doesn?t own MY house so, how can he sell MY house?? My head spun around so fast that I almost gave myself whiplash. I ran to the computer and grabbed the microphone to speak in the room and here is what was said?

Jim: Monte, what is the name of the law firm that sent you that letter?
Monte: Uhmmm, it says ummm.. Barnett, Burke & Associates.
Jim: Would that be BARRETT Burke?
Monte: Yeah, that?s it.
Jim: Monte, email me your number. I need to talk to you NOW.
(That law firm processes nearly 40% of all foreclosures in the state of Texas)

Within a few minutes I was on the phone with him and I told him that I was a local foreclosure expert and taught classes at Foreclosure Listing Service in Addison. I told him I needed to meet with him and his wife right away because, the letter he got was his notice that his house was in foreclosure and he had less than three weeks left before it would go to the auction. He was shocked and claimed he had no idea (I didn?t know how he could be shocked after missing nine payments). Two hours later I was at his house and explained all about the foreclosure process to him and his wife and what options he may have to save his house.

I remember how bad I felt while explaining the situation because his wife just sat there, staring at me with her eyes wide open, not able to say a word. She had no idea the mortgage was past due at all. She had not seen any letters from the lender or taken any call from them. Monte never told her early on and the situation only got worse as the missed payments added up.

After going over all of the possible solutions, I decided that bankruptcy was likely the best option for them and they agreed. I made a call to Hariett Langston, a friend of mine who is a bankruptcy lawyer in Dallas. Monte and his wife were overwhelmed with the situation and asked if I would go with them when they met with the attorney and I told them I would.

We met with Hariett that same week and everything appeared to be set to stop the foreclosure. All Monte needed to do was pay the bankruptcy filing fee.

A week before the foreclosure sale I went to their house and was a bit surprised to learn that he had not paid the filing fee. I asked him when he was going to file and he just shook his head and said he didn?t know. I remember pausing for a few seconds and it dawned on me why he had not filed. I said, ?Monte? You don?t have the money to file, do you?? In a very humble manner, he looked down at the floor and shook his head. ($500 was the amount he needed to get the bankruptcy filed)

As I drove home I thought to myself that it would be simple if I just wrote a check for the $500 but, I thought that he really needed to pay something so important himself. I got an idea about that time and sent an email to one of the chat room regulars who organized the chat room socials. I recall stating in that email that online chat rooms have such a negative public image and went on to tell her about Monte, his situation and I asked her if she could set up a fund raising get together. It would be our way of proving that normal, everyday people go to chat rooms and this was a chance to show at least one chat room could do something good. I told her that he only needed $500 and all it would take is $5 here, $10 there and a $20 from a few? $500 could be raised.

She arranged to have a Dallas chat fundraiser social for that coming Saturday night. I called Monte and told him about the fundraiser. He asked me to not do it (his pride was the obstacle) but, I told him that we were going to do it anyway and it would be nice if he attended. He later told me he was so choked up that he couldn?t say anything but, he did finally say he would attend.

I expected a handful of people to show up for the fundraiser but, I was wrong. Much to my surprise? At least 50 to 60 regulars from that chat room showed up and contributed. At the end of the night, ordinary people from a Yahoo chat room donated more than $700 to help save someone from losing their house.

The next day I gave the proceeds to Monte & his wife and they quickly paid the attorney the fee to file their bankruptcy and their house?No?Their ?home? was saved.

The story got another interesting twist a few days later. I got a call from a reporter who wrote for a well known local media outlet. They had heard about the fundraiser and thought it was a great community effort story that should be told and asked if I wanted them to write about it.

It took only a few seconds for me to process my answer but, I remember thinking that such publicity would be great for business and my classes would see a boost in attendance. Then I thought about the possibility of other homeowners that would read the story and what would my answer be to them if they contacted me and asked me to do a fundraiser for them as well?

I told the reporter that as wild as the story was, I never expected things to unfold as they did. I told them that I had to pass on their offer because, I had done it to help someone and wouldn?t feel right about profiting off of someone else?s stressful and humbling foreclosure experience. They understood and that was the end of it.

I have to admit . . . Of all the positive experiences I have had in real estate, helping Monte might rank as number one. What stands out in my mind was the fact that so many people pitched in to help save a family from losing their home and they did it for someone most had never met or only knew of by screen name?That?s what made it so great.

This happened in 2005 and two days ago I got a phone call from Monte. He just wanted to give me an update and I was happy to hear they still have their home.

During the call I told him about the reporter. He was surprised I hadn?t told him and more surprised that I turned them down. At the end of the call, Monte told me that three years was long enough and he encouraged me to tell the story of how a bunch of chatters from a Yahoo chat room, came together and did something good.

Thanks Monte.

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This Post is from the BiggerPockets Real Estate Blog. Copyright © 2008 BiggerPockets, Inc. All Rights Reserved.

Online Chat Room Helps Save Foreclosure Homeowner

The Motley Fool is a web site devoted to helping average people make better investment and financial decisions. Recently, GRS forum administrator (and resident economist) Jericho Hill got a chance to visit The Motley Fool headquarters. This is part two of a report on his experience. (Here’s part one.)

When I was in high school, I participated in my state?s stock market game. It was designed to introduce our economics class to the world of investing. That?s where I first heard of The Motley Fool, an upstart website for financial investors that went against the grain of having advisors manage your money. Their newsletter analyzed the advantages of managing your investments yourself, and advocated indexed mutual funds over managed funds.

So, when I received an invitation recently to visit the Fool Headquarters in Alexandria, VA for a focus group, I jumped at the chance. The purpose of the focus group was two-fold.

• One part of the meeting focused on The Motley Fool?s free CAPS service, a community stock-picking tool. I discussed this experience last week.
• The second part of the focus group dealt with how the participants used financial information, where they got it from, and what our views on investing were.

It was the second part of the meeting that I felt was the most valuable. Along with various Motley Fool staffers, the group members spoke about their personal investing habits, beliefs, thoughts, and attitudes. We heard from people ranging from first-time investors saving for retirement, to a professional financial planner, to well, myself. The breadth and depth of perspective was illuminating.

Prior to the focus group, I had walked around the office floor and noticed quite a few quotes on the walls. One by Peter Lynch read ?Never invest in any idea you can?t illustrate with a crayon.? Another said ?Though it?s easy to forget sometimes, a share is not a lottery ticket, its part ownership in a business.?

Later, during the group discussion, another quote came up by Warren Buffett: ?If you have one or two great ideas a year, you?re doing great.? The two new investors in the room stated that they felt pressure to succeed and succeed often as they started to invest for retirement. Knowing there were resources that played on the psychology of investing rather than mathematics of investing was important to those attendees. They also didn?t know where the best sources of information were, or who to follow.

Many of those in the room felt that it was not prudent to follow one particular author or person. Rather, it was the subject matter that as important, and as Burton Malkiel said ?Investors should act like intelligence agencies, gathering information no matter how seemingly insignificant.?

Somewhere during the conversation, I brought up the problem of risk. Individuals have different risk profiles, just as some people can ride very scary roller coasters while I?m stuck on the Dahlonega Mine Train ride at Six Flags. Further, not only do we handle risk differently, but another attendee pointed out that we even define risk differently. Our group took five minutes to write individual definitions of risk. They were all different when we reconvened.

We had a long discussion about risk, and about how our differing views on risk can make conversations on financial topics difficult. Different risk tolerances create difficulties in determining just what one?s best financial plan is. How does one define risk? More importantly, how do you define risk? All agreed that becoming more comfortable with one element of risk (volatility) was exceptionally important to being a successful long-term investor.

When the focus group ended, there was no general consensus on what information we should consume, to whom we should listen, where we should invest, or even how we should invest. That seems like a profound thought to me: that your best personal finance advisor is yourself, regardless of whether you?re just starting out or finishing up.

Jericho Hill also recently had a chance to speak with David Gardner, one of the founders of The Motley Fool. Look for excerpts from that interview at Get Rich Slowly in the future.

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• links for 2007-05-16
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