Saturday, August 22, 2009

Beware the Debit Card!

“Doublespeak (sometimes called doubletalk) is language constructed to disguise or distort its actual meaning, often resulting in a communication bypass. Doublespeak may take the form of euphemisms (e.g., "downsizing" for layoffs) or deliberate ambiguity.” Thanks to Wikipedia for the quote.

Politicians of both parties are particularly masterful at using language to obfuscate and to lie to the electorate about their true intentions. Banks, however, run a close second in their premeditated misuse of the English language to hide their true intent, the legal victimization of the careless, the unwary, and the ignorant.

This week I heard a discussion of debit card overdraft protection. Someone I have known for many years currently has a daughter in college. He was attempting to straighten out her checking account. It seems she has a debit card that she uses constantly for everything. She frequently forgets to enter these debits into her check register, spends more money than she has, and incurs overdraft protection fees. These fees typically run $30.00 per charge. In this particular case, the girl ran up over $150.00 in fees.

“If you overdraw your account with the typical fee and you pay it back in two weeks, you're paying over 500% interest," said consumer advocate Jeane Anne Fox. Tony Soprano would be ashamed to charge such interest rates but banks think it just fine. They generate $38,000,000,000 a year in pure profit by providing their customers with such a wonderful service.

Another person participating in this conversation told a story from his college days. Of course he didn’t have much money and like most of his generation he was quick to use a debit card instead of cash for small everyday purchases, like coffee, lunch, and miscellaneous school supplies. Then, every evening, he would check his checking account balance on line. On one particular day, he incurred 7 overdraft protection fees totaling $210! He called the bank and threw a screaming fit. He demanded they remove overdraft protection from his account and withdraw the fees. The bank withdrew the fees but encouraged him to keep the overdraft protection, telling him that it would protect him from the embarrassment of attempting to pay for something when his account was empty. This individual was having none of it and informed the bank he could tolerate a lot of embarrassment for $210.

This, by the way, is the official position of the banking industry. "It's a win, win," said Diane Casey Landry, president, America's Community Bankers. "It's a win for the consumer because their check is honored and they're saved embarrassment and they save on the overall costs. And, the bank gets to make a fee out of it, so I would characterize that as a win, win.”

We both suggested to the father he call the bank and ask that the fees be rescinded. He was embarrassed to ask because he had previously made calls on behalf of his daughter. In that instance the bank had rescinded the fees. I also suggested, plastic surgery, cutting the debit card into small pieces and teaching the daughter how to balance a checkbook. Cash works very nicely for purchases too small for a check. The father didn’t believe his daughter could learn to keep a checkbook in good order. I said no more. The father did call the bank and $50.00 in fees was forgiven. The father then covered the other $100.00 in charges.

It gets worse. If a series of checks or fees will throw your account into overdraft protection, the bank will process the largest charges first so they can hit you with more fees. If you use a debit card to rent a car or a hotel room, the vendor will put a hold on your account that is significantly larger than the expected charges. Sometimes the vendor will then forget to inform you of this little fact. Let’s say a total car rental bill is expected to be in the neighborhood of $135. The car rental company might put a $500 hold on your account as a form of self protection. If you don’t know this, you could easily rack up a lot of fees, thinking you had access to that $500 when the bank considers it already spent when calculating such fees.

Finally, unlike credit cards, debit cards do not offer you protection from fraud. Typically, incorrect charges in excess of $50.00 will become the problem of the credit card company. A fraudulent charge to your debit card is your problem until you prove otherwise.

Such abuses seem to put me into a minor prophets frame of mind. And hey, let's be careful out there.

Micah 6

[10] Are there yet the treasures of wickedness in the house of the wicked, and the scant measure that is abominable?
[11] Shall I count them pure with the wicked balances, and with the bag of deceitful weights?
[12] For the rich men thereof are full of violence, and the inhabitants thereof have spoken lies, and their tongue is deceitful in their mouth.
[13] Therefore also will I make thee sick in smiting thee, in making thee desolate because of thy sins.
[14] Thou shalt eat, but not be satisfied; and thy casting down shall be in the midst of thee; and thou shalt take hold, but shalt not deliver; and that which thou deliverest will I give up to the sword.
[15] Thou shalt sow, but thou shalt not reap; thou shalt tread the olives, but thou shalt not anoint thee with oil; and sweet wine, but shalt not drink wine.

Friday, August 21, 2009

You Want to be Where Everybody Knows Your Name

About ten years ago Ray Oldenburg wrote a couple of small books on the third place (sometimes called the third good place). As far as I can tell the books were not all that well written or all that popular but the concept caught fire. It has spread across a number of disciplines from urban planning to the marketing of Starbuck’s Coffee Shops. I am even beginning to hear the term in discussions concerning the future of the American church.

In a nutshell the author observes that people need three good places in their life. The first good place is the home. With half of American marriages ending in divorce that is something of an assumption, but OK. The second good place is the workplace. Again sociological studies might not agree with that conclusion since most Americans view the workplace as not much more than a necessary evil. In the ideal world home, the workplace, and the third place all have things in common, familiarity, safe relationships, and a convenient location. The third good place is a vital part of our psychological health. It can be found anywhere, a beauty parlor as in the movie Steel Magnolias, another example, a barbershop as in the movie of the same name, and the quintessential example, the neighborhood pub as brilliantly portrayed in the long running TV series, Cheers. Other examples include gyms, hardware stores, diners, and bookstores. Anywhere a number of independent agents coalesce around a physical location qualifies as a third place, any place where everybody knows your name.

Starbucks has quite consciously gone about creating such an environment by offering a pleasant environment, nice music, free electricity, and Wi-Fi for a nominal fee. In some New York coffee houses the Wi-Fi has traditionally been free. This is changing. As more of their customers are becoming unemployed, they have not been buying as much $3.00 a cup coffee and they are using the free Wi-Fi and the restaurant’s chairs and tables as an office for their job search. This is not contributing the bottom line, so they are turning the Wi-Fi off.

What an opportunity for the church! Offering free coffee and free Wi-Fi on Saturday or a few afternoons a week could be a possible opportunity to offer the building as a potential third place. Any business that successfully establishes itself as a third place is probably going to prosper. The greatest expense in running such an establishment is the building itself, the church already has that covered.

From the Cheers theme song

Sometimes you want to go
Where everybody knows your name,
And they're always glad you came;
You want to be where you can see,
Our troubles are all the same;
You want to be where everybody knows your name.

Sunday, August 16, 2009

Children and Money (Part III)

It is predicted that the average young person in America will have seven totally different career paths in one lifetime, not seven different jobs, seven different careers. I think there are some issue here that I did not cover in Children and Money. If the jobs of tomorrow do not even exist today, how can we prepare our children for that future? I think it will be necessary for young parents to give their children at least four collars and beyond that the confidence to try just about anything.

White Collar – I am not ready to give up on a college education. In many fields it is still a ticket that must be punched. It is not as it was in the past, a free pass to a better life. I used the get a better education, get a better job ploy three times in my life, but I think those days are just about over. There are too many unemployed and underemployed with college degrees. I would be most worried about a liberal arts degree, without something else. A history degree is pretty worthless without a teaching certificate, a PhD, or a degree from a law school. A degree in a foreign language combined with a MBA is pretty valuable. By itself it is not worth too much.

Blue Collar – Today I would try and give a child a trade. This would difficult for me because I have no such experience or skills. I think it is important that a child learn how to do something of value that does not require a larger employment matrix. I read a series of detective novels that featured a policeman in the old Soviet Union. In frustration, he learned the basics of plumbing so he could fix his own toilet. Evidently, it was nearly impossible to find a plumber in Moscow. Once his neighbors discovered he had this skill, he almost had to beat them off with a stick. There are many such skills from electrician to small engine repair. Someone who knows how to do quality home renovation projects will always be able to find some work. I would also place cooking, music, and artistic efforts in this category. I once dated a girl who put herself through school by playing and singing at a piano bar. She was also paid to perform solos at churches. This was pretty interesting since she was an atheist.

Gold Collar – This is perhaps easier for the young than it is for my generation. Technical skills, particularly skills in new technologies, can be extremely valuable. This will always be a moving target, but if you can hit that target, you can make a lot of money in a very short time. Every couple of years some new technology gets red hot for a short period of time. There is suddenly an enormous demand for web page designers or Java, or HTML, or Flash, or PHP, or SQL or something. I then read articles about high school students who are earning six figure incomes in their spare time. These situations never last very long. That kind of demand always produces an over supply of whatever kind of programmer is getting that kind of money. Let your child build his own computer. Better yet, build a computer together. Someone who can build, fix, and maintain computers and computer networks will not go hungry in the foreseeable future.

Another Color Collar – I don’t know if this collar has a name yet. I would place sales, networking, and entrepreneurial skills in this category. I think it may prove the most valuable of all the four collars in our uncertain future. Back when I worked in factories, we use to say successful salesmen had “the gift.” Not everyone is wired for a sales job but if you do have that gift you can earn an enormous amount of money. Back in the day, a successful salesman of industrial supplies could easily earn three times a shift superintendent’s salary. As brick and mortar jobs fade away, networking skills will become more important. They are already the basis of such trades as real estate sales. Women seem to be naturally better at networking than men. Teach your daughters to apply this skill to real world problems. Even if the economy is not producing any new jobs, there are always some people that seem to be able to produce their own jobs. The small businessman has a hard life, but people with that skill set can make their way through just about any economic situation. Encourage your child if she shows any interest in starting or operating her own business no matter how small.

That’s about it. Any of you who wish to say, “Physician heal thyself,” go ahead. It is easier to write about such a subject than it is to actually have the courage to change your life. I applaud at least three of my friends who have actually followed this advice and changed their lives.

Proverbs 3

[5] Trust in the LORD with all thine heart; and lean not unto thine own understanding.
[6] In all thy ways acknowledge him, and he shall direct thy paths.

Friday, August 14, 2009

Future World

This is a subject I have touched on in a number of posts, but I have never hit it head on. The world is changing and changing very fast. The implications effect many parts of our life including our financial future and the future of the church in America. It is my opinion that in the lifetime of our children (meaning 30 years old today and younger) neither the “normal” American employment experience nor the “normal” American church experience will be anything they can even imagine today.

There are two powerful opposing forces at work in our culture and political economy. One is centralization of power, command, and control. Since the late middle ages, power has tended to concentrate in fewer and fewer hands. This has led to the rise of the nation state, a phenomena that might be coming to an end, as globalization drives humanity towards some form of supranational government. Do I hear the warning of Saint John the Divine?

Revelations 13

[16] And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
[17] And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
[18] Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.

Satellite communications and computer networks have made this prophecy a technical possibility.

There is a second force that is tearing our world apart. The same technology that allows the micromanagement and dehumanization of the workplace is also leading to the destruction of the workplace as we know it. If not for the massive infusion of capital by the world’s central banks and treasury departments, the destruction of a number of the great concentrated centers of financial power would already be complete. The Internet and cell phone networks are rapidly making positional authority obsolete. Phyllis Tickle, an Anglican philosopher of history, notes that ants have no centralized authority, no queen ant, only the constant interaction of small self organizing entities moving towards mutually desirable goals. New authority does not come with a job title or a degree. It occurs when a number of independent agents coalesce around a center. Seth Godin describes these phenomena very well in an important little book entitled, Tribes.

As I write this blog entry, the war is being fought on a thousand fronts. Recording and movie companies are fighting a losing battle against illegal file sharing. They have even stupidly resorted to suing their own best customers. It will accomplish nothing. Almost no one under the age of 40 sees anything wrong with copying CDs or sharing mp3 files with their friends. If the big companies really want to stop file sharing, all they have to do is offer a higher quality product for so little that no one will want the illegal version. After the failure of prohibition in this country, almost no one buys moonshine when high quality brand name liquor is available at a reasonable price. When DVDs are sold at grocery store check out counters for $5.00 a copy, nobody will want to download a second rate version from the Internet. By the way, DVDs were originally intended to be just such a low cost item. Then the lawyers and accountants got greedy.

The newspapers are screaming bloody murder because they are rapidly becoming irrelevant. Who wants to pay for day old news, when it is available for free as it happens on the Internet and cable TV? Also, Montgomery County insists that I recycle newspaper, but only on Tuesdays if it is not raining, what a pain. The papers and even the pornography industry are howling they can’t compete against free and have demanded Federal bailout money (really!).

Of course you can compete against free. Jimmy Buffett gives away free music on Radio Margaritaville 24-7. He also advertizes his concerts and sells a wide variety of Jimmy Buffett stuff. He is not selling music. He is selling a dream. Millions of parrot heads have bought into that dream and in the process, Jimmy Buffett has made a fortune.

Today, this conflict is more intense in China than in any other country on earth. The Chinese government is the most repressive command and control authority that can be found in the world outside of insane rouge states like North Korea. They are censoring the Internet, free speech, religious minorities, even monitoring text messaging. What a boring job that must be. Imagine reading the text messages of a 1,000 teenagers in love every day. It isn’t working. The new capitalist elite and the traditional Chinese family corporations are weakening and corrupting the central authority. Christianity, Tibetan Buddhism, and Falun Gong continue to grow in the face of sometimes brutal persecution.

A new world is rising around us. The old world is fighting back. We can not return to 1950. The center cannot hold.

I believe this little video was played at our church some months ago. If you haven’t seen it, check it out. I wish I knew how to put live links on this blog but cut and paste does work just fine.

Friday, August 7, 2009

Where do You Give?

Where do you give? The most obviously correct answer would be, “Where the Lord tells me to give.” I hope that is true, for me and for you. However, we all have our own personalities and problems. Here is a little bit about mine. I have analyzed my giving. Clearly some patterns have emerged and those of you who know me will not be surprised to discover I like to know where my money is going and how it is being spent.

Obviously the first place I give is to my local church. If you don’t want to give to your church, you should probably find another church. This is a real problem in some denominations. I have heard from an extremely reliable source that in one major American denomination the only increase in expenditures planned at the national level is more money to prosecute lawsuits against its member congregations. Right now about the only thing holding this denomination together is property law. The national organization owns the buildings, not the individual congregations. Many in the local churches view the church hierarchy as apostate. They want to affiliate with other member churches in their tradition that can still recite the Apostles’ Creed and mean it. If they leave the denomination they will be sued and will probably loose their church property. I am an American Protestant. I would say “Wherefore Come ye out from among them, and be ye separate, saith the Lord, And touch no unclean thing,” but it isn’t that easy if you and your family have been a part of something beautiful for many years.

I am very happy with the administrative efficiency of my leadership. They might make a well intentioned investment that doesn’t turn out to be a winner, but these men would never knowingly waste one penny of the Lord’s money. I read the budget documents, understand where my money is going, and in almost every instance, I approve of what the leadership is doing with the Lord’s money.

For close to 20 years, I have supported an individual who works for a major national ministry. He is responsible for his own funding as well as the Lord’s work. I never liked that arrangement. I always thought it would be better if fund raising and the work of the ministry were separate. However, if that were the case, I would not be supporting this particular ministry. I am supporting the man, not his employer. He is one of the most mature and Godly Christians I have ever had the pleasure to meet. If anything, I am afraid he might damage his health by working too hard. I might add that this ministry is getting two for the price of one. His wife works just about as hard as he does. The Lord is getting a real bang for the buck with these two. I expect the payoff from his ministry will effect not only the current generation but generations to come and on into eternity. I also feel like the little bit that I have added over the years is important to his overall financial picture. I feel like my presence in his life has made a difference.

I support a friend I have known for over 30 years. His story is a little different. All his life he wanted to serve the Lord, but since he was not cut out to be a pastor, he was not exactly sure how to proceed. Also, like all of us, he needed to provide for his family and so he worked at jobs that paid the bills but did not satisfy the cries of his heart. When he was over 50 he suffered a heart attack. Shortly thereafter, his employer went out of business. At this crisis point in his life he decided to preach when and where anyone would listen. In fact, I think he would preach the Word of God into a hole in the ground filled with the bones of dead men, if that is what God told him to do. I encouraged him to start a ministry on a part time basis. However, my friend is not a part time kind of guy. He is an all or nothing at all kind of guy. So with no money or resources he began a preaching and teaching ministry. In the subsequent 8 or so years, his ministry has prospered up and down the I-77 corridor between Charlotte, NC and Columbia, SC. He has blessed many congregations and small groups with his knowledge and his faith. Again, I know exactly what he is doing with the Lord’s money. In fact he sends out an email prayer request to his supporters before every meeting and then reports on the results when the meeting is over. He is a man who fears the Lord; more than that he is a man who seeks after the Lord’s heart. I am confident he is not wasting the Lord’s money.

One more thought. As far as I can remember the Bible never indicates that Jesus said anything about giving to ministries. He did, however, preach often about giving to the poor and making financial restitution for economic wrongdoing. A few times in my life I felt a very clear leading from the Lord that in some particular situation, I was called to divert or increase the flow of His money from ministries to individuals. All of the above ministries are properly registered with the IRS and I claim the deductions on my taxes. However, there have been times when I believe the Lord told me to give to an individual without 501-C status. In some of these instances, time has proven that my actions helped to reap real benefits both in this world and world to come. We American Christians are not wired to think in this manner. It is dangerous. I have seen manipulative people con God’s faithful with a good story and a fake testimony. But still, I think we would do well to give the Lord’s money into worthy situations more often than is our normal practice.

Ecclesiastes Chapter 11 (NIV)
1. Cast your bread upon the waters, for after many days you will find it again.
2. Give portions to seven, yes to eight, for you do not know what disaster may come upon the land.
3. If clouds are full of water, they pour rain upon the earth. Whether a tree falls to the south or to the north, in the place where it falls, there will it lie.
4. Whoever watches the wind will not plant; whoever looks at the clouds will not reap.
5. As you do not know the path of the wind, or how the body is formed in a mother's womb, so you cannot understand the work of God, the Maker of all things.
6. Sow your seed in the morning, and at evening let not your hands be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well.

Tuesday, August 4, 2009

Car Math Update

I have been listening to talk about the "Cash for Clunkers" program. One of my coworkers noticed that new Hyundai cars were being sold for as little as $9,000. He went on to observe that trading in a clunker for $4,500 could give you a brand new car with a 100,000 mile warranty for as little as $4,500.

Perhaps you have an ancient clunker and a child looking for a new car.

Something to think about.

Saturday, August 1, 2009

Children and Money (Part II)

The following information comes from an informative pamphlet entitled “Putting Kids on the Road to Financial Independence,” published by Charles Schwab.

Jump Start the Savings Habit

Allow your children the opportunity to set down both a long term and a short term goal.

Teach them how to set aside a percentage of their allowance, gifts, or other money to achieve that goal.

Teach them how to calculate how long it will take to achieve that goal at different savings rates.

Young Kids: Decorate separate jars for each saving goal. Create a bulletin board to track progress.

Middle Schoolers: Help your child open a no fee savings account. Ask the manager for a tour of the bank and a demonstration of online banking.

Teens: For teens who work, help them set up direct deposit to put part of their paycheck into the saving account.

All Kids: As an incentive consider matching your child’s savings (25 to 50 cents on the dollar) or offer a bonus when they reach a goal.

Giving – It’s a Family Affair

Volunteer as a family

Teach children how to research and choose an organization to support

Match your children’s donations, DOLLAR FOR DOLLAR!

Make donations as a family

Smart Spending

Young Kids

Help a preschooler understand the value of money by giving a dollar for a snack. Let her pay for the snack herself, get a receipt, and keep the change. Encourage saving the change.

Turn grocery shopping into a bargain hunting game

Teach your children the basics of comparison shopping

Older Kids

Give them a budget to plan a family night out or a vacation.

Then teach them how to research an estimate expenses for transportation, lodging, meals, and activities.

Teach them how to make trade offs to stay in budget.

Be a hands-On Credit and Investing Coach

Teach your child how to balance a check book

Explain the basic use, risks, interest rates, and fees associated with the use of credit cards

Once the child has a checking account and a credit card, help them manage its use and the payment of bills.

Investment 101

This is free from me: Let your children participant in your investment activities as you discuss the purchase and sale of stocks, bonds, and other investment vehicles. Make it a family event. I once read a very good basic investment book by a very successful stock broker. Every Sunday afternoon his extended family would get together for a meal. His father, uncles, mother, and aunts would argue the relative merits of different investment strategies. As he grew older he was surprised to learn this was not normal for all families. He believes his skill with investments was born in these family arguments.

Back to Schwab

Ages 10 and up: Teach by virtual investment. Have your child select a number of different stocks and help him learn how to track their value, including “drip” reinvestment.

Teens: Open a custodial account and help your teen select and track appropriate investments

Young Adults: Once they are out on their own, continue to coach their use of money. Particularly encourage them to save for retirement.

Now just to lighten the mood a bit, let me share the best advice for any child, direct from Saturday Night Live!