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Posted
Apr 16 2008, 06:43 AM
by
Karen Datko
Rating:
This post comes from partner blog The Dough Roller. As much good as he does, Dave Ramsey drives me nuts with his extreme views on debt. Ramsey, as he readily admits, did some really stupid things with debt. Leveraged to the hilt on bad real estate deals, he went bust in a way most of us could never imagine. As a real estate investor, my leverage and borrowing comes nowhere near the toxic level Ramsey went to. Why? Because Ramsey's personality is one of extremes. Much like an alcoholic, he could not control his use of debt. He got one taste of that leverage, and he was borrowing before noon ever day. Dave Ramsey is a recovering debtaholic Now he is a recovering debtaholic. Like a recovering alcoholic, he should never borrow again. Why? He just can't handle it. Put Ramsey and debt together, and something really ugly develops. OK, fine. But why should that apply to all of us? It's as if a recovering alcoholic were telling the rest of the world never to have a glass of wine. In other words, what works and doesn't work for Ramsey may not apply to everybody else. Of course, there are those who, like Dave, can't control debt and should avoid it just like he does. But debt, if used wisely, can greatly improve your finances, can increase your financial freedom in the long run, and can greatly improve your balance sheet.
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Posted
Dec 18 2007, 12:38 PM
by
Karen Datko
Rating:
In case you missed the news, the Federal Reserve Board has proposed rules to curb the type of lending abuses that helped create the subprime-mortgage debacle. You can read the mainstream media report or you can enjoy Sellsius' snarky take on "More rules for those who hate rules." For instance, one of the rules would restrict prepayment penalties. Sellsius says: "It does not take much to figure out that steep penalties for paying off a loan early would limit consumers' refinancing options. Hmm ... you don't pay back the bank, they're unhappy; you pay them back early, they're still unhappy. You just can't please some people."
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Posted
Dec 17 2007, 03:26 PM
by
Karen Datko
Rating:
When BankerGirl decided to consolidate $17,000 on a new credit card at 5.99% APR, readers wondered if she had picked the right deal. "Fear not, dear readers, for I am a master at interpreting The Fine Print!" she replied. What makes her such a know-it-all? After all, fine print is difficult to understand (let alone see). Besides, she has $17,000 in credit card debt. "How dare someone with the financial recklessness I have demonstrated in the past claim to have conquered The Fine Print?" she said. "Because I, BankerGirl, have been a creator of The Fine Print." In a previous job, she helped develop products to make more money for banks. This post is invaluable reading for anyone who is considering a balance transfer or is simply confused about how credit cards work.
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Posted
Dec 11 2007, 08:05 AM
by
Karen Datko
This post comes from Mark Huffman at partner blog ConsumerAffairs.com. A stroll through the Scam Alerts archives finds it's been Christmastime all year for the world's scam artists. The Federal Trade Commission tells us that scams hit 30.2 million adults -- 13.5 percent of the adult population -- during the last year for which it has added up its complaints. While the FTC's latest figures are for 2006, there's no reason to think the number declined in 2007. Human ingenuity is constantly on the prowl, after all, seeking new ways to fleece the unwary, the gullible and those looking to get rich quickly. It's not just the greedy and the gullible who get taken. The poor and desperate also are falling victim to modern-day bandits -- those in grimy boiler rooms as well as corporate board rooms. The dictionary definition of a "scam" is "a fraudulent business scheme designed to make a quick profit." In making our list and checking it twice, we combed our database of nearly 300,000 consumer complaints to find the scams that made great strides forward, roping in new victims and increasing their take in 2007. So, here they are -- ConsumerAffairs.com's Top 10 Scams of 2007:
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Posted
Dec 10 2007, 01:56 PM
by
Karen Datko
Who's to blame for the subprime-mortgage debacle? Personal-finance bloggers are casting a wide net, and home buyers who borrowed more than they can afford are not slipping through the holes. No Credit Needed doesn't own a home. It's provided by NCN's employer as part of a compensation package. From that detached perspective, NCN offers a clear-eyed examination of how so many people got into such severe debt. "What amazes me -- and what continues to frustrate me -- is that when I watch television reports about the mortgage mess, or when I read an article about the subprime situation, no one ever suggests that the underlying problem is that people are addicted to borrowing money," NCN writes. "Is it really surprising that we find ourselves in this situation?"
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Posted
Dec 06 2007, 05:27 PM
by
Karen Datko
Thursday Bram at Money Socket has a friend who is a year out of college and has started to go house hunting. Thursday logically wondered how her friend could afford a down payment. (Continue reading if you want to skip a perm at the salon, because the rest of this will curl your hair.) "After further discussion, it was established that she had only minimal savings, but the bank was willing to give her a mortgage," Thursday writes. "Even so, she still couldn’t afford most houses within a 30-minute commute to her work, but she was going looking anyway." Thursday asks the next logical question: "Why?"
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Posted
Nov 12 2007, 06:40 AM
by
Karen Datko
This post comes from J.D. Roth at partner blog Get Rich Slowly . One of my readers wrote to complain that Macy's had flipped her store credit card and sold her data to Citibank. I had a similar experience recently, and it taught me to be more attentive to my accounts. In June, I received some "advance checks" in the mail from Bank of America. You know the ones -- the checks your credit card company uses to entice you to take a cash advance. The problem was, I don't have an account with Bank of America. I did once, but I closed it in December of 1998. I shredded the checks and didn't think much about it. In September, I received a second batch of advance checks from Bank of America. This worried me a little. I took a closer look. My name and address were correct, but the account number didn't match any I'd ever had with any financial institution. I thought about calling the toll-free number, but didn't. Again, I shredded the checks. At the end of October, I received a third batch of checks
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Posted
Oct 09 2007, 06:27 AM
by
Karen Datko
This post comes from partner blog Blueprint for Financial Prosperity . In layman's terms, the interest rate dictated by the Fed impacts the stock market because it affects the rate on loans businesses can get. When the interest rate goes up, loan rates go up and businesses have to pay more on their loans and have less to put back into the business. The interest rate also affects consumers because the rates on their loans are going to go up and thus their ability to spend money is going to go down. If consumers are spending less, businesses are making less -- yet another hit to future growth potential. Since the stock market is supposed to track the business, rate hikes affect growth projections and thus the price of stock. The price of a stock is based on those projections, so increased costs means potentially decreased future growth, and so the price goes down. A rate hike means stocks weaken; rate drop means stocks strengthen. That's the layman's version and that's basically like explaining
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Posted
Sep 26 2007, 09:35 AM
by
Karen Datko
You've heard these before: "I don't make enough money, so I can't save." "I need to carry a balance on my credit card to build a credit history." "The furniture/appliance/gizmo store offers a zero-interest, zero-payment loan, so I can afford it." A blogger tackles these and 79 other commonly held beliefs about finances.
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