It's Just Money

I'm not participating in the Coinstar Promo

I have never used one of these Coinstar machines.  My thinking was always along the lines of "Really?  You want me to pay you 9% to count my change?  Am I really that lazy?"  I may actually be that lazy in a lot of other ways, but not this one.  I'll count/spend my change, thank you very much.

But a couple of weeks ago, a friend posted the new Coinstar Promo on his Facebook status.  Here's how it works.  You redeem $40 of change for  a$40 gift card, and you get a free $10 gift card as a bonus.  Sweet deal, right?  I figured I would go to the bank and ask for $400 in quarters, and go claim my free $100 in gift cards.  Gift cards include major retailers such as Amazon, iTunes, Starbucks and Old Navy.  All merchants that I am likely patronize anyway.

So, how come I'm not participating?

Infomercials fascinate me. And I just bought something from one for the first time.

I actually really love infomercials.  From the early infomercial days of Tom Vu, Carlton Sheets, and Tony Robbins, I have always loved infomercials.  It's really fascinating to me that marketers create a half hour long commercial with the expectation that people will sit through the entire thing, and some of them will even pick up the phone to order what they are hawking.  It's even more fascinating that people actually do.

So, now I'm one of them.  A few weeks ago, I ordered the P90X workout program.  I'll give my review later.  First, I'm going to ramble a bit.  This is the first thing that I have ever bought from an infomercial, despite hours of watching the early personalities of the craft.  Of course, infomercials of the 80s and 90s were a bit of a different animal.  Back then, you only caught infomercials at 2am, when you couldn't sleep.  The airtime was cheap, and the marketers must have figured that the sad folks who were watching TV at 2am were prime targets for "get rich quick" schemes, "lose your gut in 7 minutes a day," or the coolest cooking device that lets you "set it and forget it."

Don't get me wrong, the products haven't changed.  Sure, they're more modern and there's more of them.  But at the end of the day, they help you get rich, lose weight, cook, or feel better about yourself.  No, the real difference between infomercials of yesteryear and today is the internet.

In 1986, you called the 1-800 number, gave them your credit card number, or ordered COD, and agreed to pay your five easy payments of $19.99.  All you had base your decision on was whatever the silver tongued salesman said on the infomercial, and the paid actors providing testimonials.

The Invisible Hand

Funny stuff by the folks over at Salon.com:

 

Well, funny if it weren't so true!

Going out like a Rock Star

Andrew Lahde, manager of a hedge fund that profited enormously by speculating on the failure of firms that made major bets on sub-prime mortgages, has called it quits.

His "so long, and thanks for the fish" comes in the form of this letter.

Enjoy.

Do Bloggers have a responsibility to be "fair and balanced"?

It's a rhetorical question, I think.  Or, maybe not.  If I have already decided the answer, does that make it rhetorical.  Because here's the answer:  absolutely not.

Several months ago, I wrote a post about the wonder juice, Mona Vie.  It's a juice made with acai berry and other exotic sounding things that you couldn't possibly grow yourself.  You see, you would have to get the magic seeds from the depths of the Brazillian rain forest.  Ever wonder why the most healthy things in the world only grow in the far reaches of Brazillian rain forests and Himalayan mountain tops?

Anyway, I analyzed the business plan offered to those wishing to be part of the Mona Vie pyramid.  Er, I mean, take advantage of the exciting business opportunity.  Looks to me like it is possible to make some money.  Of course, I don't wish to view all of my friends and family as sales prospects.  So, I guess I wouldn't be successful.

Not surprisingly, the comments were one of two things.  Either it was someone telling us all that Mona Vie cured their high blood pressure, insomnia, baldness, made them taller, grew back their amputated leg, etc.  The other type of comment was that Mona Vie made them broke, ruined their marraige, caused them to be impotent and friendless.  Tragic, really.

So, I guess I shouldn't be surprised that it was that same post that instigated my first bit of hate mail.  Here's the email that I found in my inbox this morning:

I went and got married!

Well folks, we finally did it!  Just a few short months after I started this little blog in early 2006, I bought an engagement ring, popped the question, and got engaged.  Months and months of planning, picking photographers, florists, and fighting over the guest list, we finally did it!

I am now Mr. LA MoneyGuy.  Oh, wait a minute.

Well, nothing I hate more than, "sorry I haven't posted much lately" posts.  They're just so arrogant.  It presumes that everyone is sitting in front of their computers waiting for your next words of inspiration.  So, I'm not going to apologize, but just say that the wedding was awesome, and our honeymoon absolutely incredible.  We returned a couple of weeks ago from a two week trip to the Mediterranean, and moved in to a new apartment last week.  Busy times, indeed.

I may write more about both later, as there is definitely a personal finance angle to both.

I know, I know... you all want to know where to send the gifts.  Tell you what, in lieu of gifts, please pay off your credit cards!  And if you don't have any credit card debt, take an old friend out to dinner.

So, what's the problem with Multi Level Marketing scams (er, business models)

Recently, I wrote a post about the product, Mona Vie, which is sold through a Multi-Level Marketing system.  In case you are not familiar with the product, it is a super juice of some sort with exotic ingredients, such as Acai Berries and Kyrptonite.  I questioned the ability for the juice to cure all the ailments that is claimed by the many distributors out there, and the viability of the business model to actually make money for those same distributors.

The number of comments on that post was pretty incredible.  Many of the comments, not surprisingly, defended the quality of the juice.  The juice was credited with healing, curing or aiding in the following areas:  multiple sclorosis, weight loss, joint pain, high blood pressure, mood swings, something about ORAC values in Leukemia cells, insomnia, headaches, stomachaches, arthritis and gas reduction.  I'm serious.  It does all this.  Read the comments for yourself.  They don't lie.

Of course, there were comments that defended the business model, and in fact the MLM business model in general.  Frankly, being a money blog, this is what interested me.  I could give a damn about the juice.  If it tastes good, doesn't kill people, and can sell, maybe I'll sign up to make some money.  But do I really want to be one of those MLM people out there?

So, here were the arguments in favor of multi-level marketing.

Teen Teaches Financial Literacy to Adults

I freaking love this.  One of the topics that I have seen frequently on the PF blogosphere is how little financial education there is for America's youth, and how that leads to poor decision making as adults.

In a reversal of roles, High School Freshman and Teen Columnist, Emily Hu, writes For Adults, It's Payback Time.

A brilliant nugget from Miss Hu's article: 

"It comes down to this: Once upon a time, when people were forced to really consider what they could afford and credit actually counted for something, people bought houses they could live in for a few years."

Isn't this how we got in this mess?

I found this Kiplinger's "Truth or Bunk?" Quiz on Free Money Finance's site.  I haven't even finished the quiz, but I ran into this question and it bugged me:

"True or false:  Never buy a home that costs more than 2.5 times your annual income."

I knew they would consider the answer false, as it's become a somewhat outdated rule of thumb.  Interest rates are lower than they used to be when this was widely used.  But I answered "True" anyway.  Here was the response:

SORRY, WRONG!

Your answer A. True is incorrect.

The right answer is B. False

Good luck even finding such a house in many major cities.  Instead of the price, what counts is your monthly payment.  And that's affected by your down payment and the terms of your loan.

I didn't add the emphasis.  They bolded, "what counts is your monthly payment."

Seriously, isn't that how we got into this mess?

Passing the CFP exam

Since announcing that I passed the CFP exam, I have received requests for advice on passing the exam.  So, I'll do my best, but everyone's experience may differ.  Here you go Zook.

First, let me explain how I went about the process.  I began the process without a sense of urgency.  The company that I was working for neither paid for the classes, nor was very supportive about it.  They were strict money managers, and financial planning was viewed as an elaborate ruse to get people to buy life insurance.  Ignorant, I know.  But they are very old school.

So, watching my budget, I went with the online only classes through the College for Financial Planning.  It was cheaper than any actual classroom version.  Besides, the "at your own pace" sounded attractive.  Initially, I went at it pretty diligently.  I had some friends who were studying at the same time, so we formed a small group to keep each other on track.  However, as they began to drop off, that support dissolved.

From the time that I enrolled, to the time that I took the test, it was almost two years.  In my opinion, too long.  See, I thought that my prior experience in financial services would allow my to walk through the coursework in the self study mode.  It turns out that there is a tremendous amount of detail that is covered, and knowing what to study is probably the most important thing of all.

After finally completing the coursework, I enrolled in a CFP Exam Review course.  There are courses offered by a host of companies, some with classroom, some without.  Here, in Los Angeles, there are two ladies, Linda Hewitt and Nancy LeClair, who teach classes at UCLA extension, and UCI extension.  They are a two weekend, Friday, Saturday and Sunday deal.  It's not cheap, something like $1,200, but man it's worth it.

They take all that you have studied, and say, "okay, don't worry about all that, here's what you need to know, and here's how you should approach the test."  They have been teaching CFP classes for years, so they know what to expect, and they know how to prepare you.  This was the most important thing that I did.

So, what I would have done differently.