Category Archives: Culture

Culture, Finance, Government

Poor People Choose To Stay Poor

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Poor people make poor choices. I suspect most of their poor choices are made because no one was or is there to help them make better choices. I believe that there needs to be help provided to instill common sense into their financial decision making. But as my MBA friend once said, “Common sense is not common”.

Here’s an example of what I mean.

I was watching TV and one of those “Make a low payment and own some piece of crap” commercial was on. The one that I’ll illustrate here was a woman saying “I bought a Playstation for my kids for only $15 a week!”. Let’s examine the STUPIDITY of buying from this lender to the poor.

I looked up on Amazon a Playstation 4 with some games and it’s $347.69. I also looked up the website, Flexshopper.com, that ran the TV ad.  It currently shows the SAME Playstation for $17 per week.

Now $17 dollars a week for a year is 52 payments which makes the total CASH outlay of $884!! That’s well North of double the price of the stupid toy.  If the woman just put aside that $17 every week she could buy the console in 20 weeks, just 5 months.  At the end of the year she’d have $544 extra dollars in her pocketbook.

Just for fun I did the calculations for $347.69 to figure out what interest rate a poor person is paying. It works out to annual rate of 226% !!!!

WTF?  226% is one heck of a return on investment for that predatory lender.  The best CD rate right now is 1.5%. Home loans are about 4%.  Used car loans are around 7%.  And they say used car salesmen are scum!  If we make an assumptions of 40% markup  to the cost of goods, $248.35 is the wholesale price for the $347.69 retail toy.  The actual annual rate of return is closer to 343%.  Not too bad in my book.  Can you say “Loan Shark”?  The “Easy Pay” sleazes are only one group of people that are financially RAPING the poor with predatory lending practices.

I’m a free market kind of guy and I’m not sure I would advocate legislating predatory lenders out of business.  But it does trouble me that there are people who are getting wealthy preying on the ill-informed.  I will say that Flexshopper is better than some other of these bottom feeders in that they do show in small type right below the payment amount, the total cost of the “loan”.  If someone chooses to buy from them, as Forrest Gump said, “Stupid is as stupid does”.  I looked up some other “easy payment” outfits that advertise heavily on TV, Rentacenter and Fingerhut, and it’s difficult to figure out their terms.  Rentacenter’s website makes you fill out an application before they’ll show the price which is total BS, in my opinion. Fingerhut buries the payment terms in their website.

What’s my solution?  There needs to be an educational focus on how to make wise financial decisions.  Sorry Hillary and Bernie but free college IS NOT the answer to the elimination of poverty,  There needs to be education to stop the financial enslavement of the poor.

Let’s play one more financial game.  Let’s say the young 25 year old mother took the EXTRA $544 a year and put it into an Individual Retirement Account, IRA, each year and worked until she was 70.  If the rate of return was 7% she would end up with $166,329 in her account.   If she didn’t buy the Playstation at all and put the full $884 per year into the IRA, she’d end up with over $270,000!!!  All of that money, well over a QUARTER MILLION DOLLAR$, can be hers for NOT making JUST ONE stupid purchase per year!

Why is there no outcry from EITHER PROGRESSIVES OR CONSERVATIVES to end this ENSLAVEMENT in poverty?

Business, Culture, Philosophy

Backup Plans

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When I was working in the corporate world I led a new product development team.  During the course of developing a product for an “unnamed” customer we had a new Program Manager (PM) named Gary, assigned to our team.  I had known Gary, from a previous life when I was working as a software consultant many years ago.

I brought Gary up to speed as to where we were and what the plan of execution was. After giving the lay of the land to PM-Gary he asked me a question that almost every PM asks, “What’s your backup plan?”.

“Backup plans are for losers”, is what I told him.

I almost laughed at the shocked look on his face. I doubt anyone ever said that to him before.  I will tell you that I stand behind my statement. As I explained to Gary, if I didn’t think my plan was going to succeed I wouldn’t be executing that plan. My goal was and is success and failure is not an option.  My advice is,  “Plan for success.  Don’t plan for failure”.

As I mentioned in an earlier post, how you envision your goal is how you will execute it.  If you have a backup plan, you are giving yourself an option to fail and you will most likely fail.  If you envision success, you’re on the path to success.  This is not to sound Pollyanna about progress.  Projects and plans will fail.  Course corrections (pivots as they are called) will occur.  In many cases the plan will radically alter during the course of execution.  However, no matter what happens, your mindset needs to be success.

Gary had my statement “Backup plans are for losers” written on the top of his office whiteboard.  It was still up there when I left the company.

Culture, Philosophy

Dream It. First Step To Failure

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There’s a tagline spread around by one of the presidential candidates, “If you can dream it, you should be able to build it”. This is a loser’s mentality. Why is that you ask?

One of my earlier articles was “Imagine it. Build It!”. I was very specific when I chose to say “Imagine” versus “Dream”.  There is a wide gulf between a person who can IMAGINE something  and a person who just DREAMS about it.

When you IMAGINE a goal your brain CREATES and PLANS an IDEA.  IMAGINE something and you are taking positive steps towards your goal.  A dream is the brain firing synapses without a specific purpose, direction, or end goal.  Dreaming about something can be pleasing and relaxing but it doesn’t accomplish much.

Okay, you may say this is just semantics, but words have meanings and they affect your thought process which ultimately controls your actions.  In future post I’ll explain why this is.

Ask any athlete and they will tell you they use IMAGERY and VISUALIZATION in their brain which enables them to see how they will score the point, make the play, break the record. I used to road race motorcycles many years ago. One of things that I did was called a “track walk”. I would walk the course and I would VISUALIZE and IMAGINE how I would approach a turn, how much speed I would carry through a turn, where are my braking points, where to apex the turn, how I would link up a “line” through several turns, where I would pass other riders.  I would take notes and draw pictures to allow me to create and replay a plan in my head.  During the race I already knew how I was going to run the track.  I didn’t just DREAM about taking the checked flag. The images were very specific about how I was going to accomplish my goal.  Ask a chess player if they can see what moves their opponent will make.  They imagine the board in their brains and calculate what are the most likely moves to come.  This ability to IMAGINE and execute action applies to all walks of life.

The ability to IMAGINE a product, business, or goal is also a key part of LEADERSHIP.  No matter if you are an employee, a small businessman, the CEO of a corporation, or the leader of a country, the first priority of a leader is to have an IMAGE of what to accomplish and then have the ability to convey that vision to others.  LEADERSHIP is a topic for another day.

Don’t “Dream it”.  IMAGINE IT!