Insider Trading

15 Nov 2011 at 00:00

pfblogger

Investing

No Comments

Wouldn’t it be nice to have secret, non-public information and to make stock trades on that information? Profiting where no one else could possibly profit, except by chance? Unfortunately, such tactics are called “Insider Trading” and are illegal. You may remember some rather names like Raj Rajaratnam, Michael Milken, Dennis Levine, Martin Siegel, and Ivan Boesky. And then, of course, there are the celebrity insiders like Martha Stewart, who receive more coverage because of their name than the act itself, and yet draw attention to what it is.

Why is Insider Trading illegal? In its fundamental understanding, Insider Trading laws protect the common investor, who is forced to invest on public knowledge only. If we didn’t forbid people from investing on non-public knowledge, we would soon have private groups of extremely wealthy individuals running the market. There would be no opportunity or potential for smaller investors to gain headway, unless they, themselves, got some valuable insider information. In essence, the laws keep a level playing field, which helps keep the free market free from an unofficial rule by the most powerful players. The irony of things being free is that they require some measure of regulation in order to be that. And that regulation comes in the form of the Insider Trading laws. However, for the laws to be their most effective, they need to apply to everyone. If any particular group is allowed to engage in such activities while others are not, then the system is flawed.

 

You might see where all of this is going. In fact, there is a group of people who are free to trade on insider information legally. Who belongs to this mystical group of people with clandestine powers? Your elected representatives in the Congress.

 

Why is this important to you? For those of us with only normal means of trading, we’re effectively getting screwed by the people we put into office. By electing them, we’re giving them a free pass to play unrestricted ball in the market, making trades and investments, and, ultimately, profits that we could never hope to make.

Even worse, such information compromises the fundamental impartiality that we expect of our representatives. Granted, few people actually see our elected officials as unbiased, given all that big corporations have done to try and continuously win their favor. But, for the most part, the shady dealings seemed confined to illegal actions which could be prosecuted when found out. When politicians are able to gain inside information, either directly by the company, or while working over legislation that affects various companies, then their ability to impartially judge a piece of legislation in how it’s good (or bad) for the citizens as a whole becomes compromised.

Nothing good comes from this, except for the legislators themselves, but there’s no incentive for them to change things that help them, unless their constituents call them out on it. Whether you want free markets to actually cater to opportunity for the individual, or you just want to feel like your representatives are unbiased (or both) the only person who can effect change in this sort of system are the people who support it, either the people paying into it (not likely) or a massive outcry from the public that is supposed to be represented by it.

Expecting Black Friday

11 Nov 2011 at 00:00

pfblogger

Budget, Frugality

No Comments

Black FridayBlack Friday has been a growing tradition for some time in the United States of America. Only in the last decade has it established itself as the busiest shopping day in the year, but it has been headed toward that point for some time and is firmly established in the commercial culture of modern society. What can be hell for retailers (and retail employees) is a big day for the frugal and budget-minded. While holidays like Christmas (or any of the other seasonally similar events such as Hanukah) are somewhat against a budget-minded philosophy, they allow for a generosity that even the most frugal can appreciate and celebrate in. And, even if you’re not terribly into the whole commercial-driven gift-giving atmosphere, the discounts offered on Black Friday can still be useful for your own personal shopping needs. It’s a good, cheap way to upgrade any number of luxury items you have been looking for, without making a huge impact in your wallet.

One thing to note about this year in comparison to previous years is that retailers are pushing back the clock on when “Black Friday” begins. In tradition with the marginalization of the wonderful Thanksgiving holiday, in which advertisements, Christmas music and many other holiday related things are being pushed just after Halloween (and even before it to some extent), it seems that Black Friday is also encroaching on the turkey territory, with major retailers opening their doors as early as 10pm on Thanksgiving day. The importance of this is that, if you’re eyeing anything in particular, you may not have until the “wee” hours of Friday morning to get it. It might be gone before midnight. This might throw a wrench in the plans of some, while others might look forward to it, excited at the chance to grab deals late on Thanksgiving rather than having to wake up early and head out groggy. Regardless of whether or not you’re excited though, the fact remains that you might have to do that shopping on Thanksgiving if what you want is a potentially hot item?

What’s potentially hot?

 

Clothing

According to a CNN Money article, various fashionable items of clothing will be offered some fairly impressive discounts this year, and are expected to fly off the shelves. So if you’re planning to buy something along these lines (or many somethings) then you might want to be in the lines waiting on Thanksgiving night, otherwise, that article of clothing you’re looking for might be gone.

 

Electronics

Electronics are always big sellers on Black Friday. Since electronics are notoriously expensive, people are rabid over good deals offered on them, and this year is not likely to be any different. There are some notable best sellers like the iPad which probably won’t see any discounts, and rivals like the Kindle fire will probably be in a similar vein. However, that doesn’t mean there won’t be discounts on similar items, including tablets, but also Laptops and Desktop PCs. Expect sales for these items to be ravenous as well, if you want something, you may have to head out Thanksgiving night to get it. Prepare to contend with crowds.

 

Flat Screens TV

While still an electronic, technically, large, flat-screen TVs bear a significant mention of their own. Sales of flat screen TVs have dwindled quite a bit in recent years, this year especially. This drop in sales is not directly linked to our current economic state (if it was, then sales would actually be up this year in comparison to last year) but, rather, due to the fact that most Americans have made the transition from their old sets to the newer, shinier flat screens. Expect a big push from retailers to sell their new 3D HD TVs, and also to sell their smaller flat screen models (though still quite large), as replacements to bedroom television sets and the like. Whether or not sales on this particular item will be big are questionable, but, if you truly do want a new flat screen, then it’s probably best to head out early in order to contend with the crowds for one.

Black Friday

It’s easy to be critical of the consumerism of our modern society, but, like it or not, there’s still some major opportunities to save, so, if you’re willing to deal with less-than-ideal hours and frustrating crowds, look to this Black Friday for the potential savings you could get on things you’ve wanted but held out on.Black Friday

Planning Meals

09 Nov 2011 at 00:00

pfblogger

Budget, Frugality, Savings

No Comments

Turkey leg with a dollar signEating is a necessary part of survival, and so it’s not a place in one’s budget that should be skimped on. Obviously, things like snacks can be cut down on, frivolous food expenses can be cut down as well. Eating out can be nice, especially if you follow the tips in one of my previous blogs, but it can also be an unneeded expense, and it’s best to keep it down to a minimum. However, even after you cut down the excess, trim the fat as it were, you can still be left with a hefty budget expense that you look to every so often, wondering “how can I cut that down?”.

 

Planned Meals

Are you the type that gets home and then decides what you want to eat? Some are a bit better though, they plan what they’re going to have in the morning, or the day before. On occasion, there’s individuals who might plan a couple days in advance. However, all of these methods, while valuable in their own right, won’t help you save very much money. When’s the best time to plan out your meals then? When you shop. That’s right. Whenever you shop, you should be planning out your meals. Whether that means planning a whole week or even a whole month in advance. If you can figure out exactly how much you need of everything, then you can buy precisely the right portions and cut down on the excess waste of over buying. Furthermore, with a stricter list of what you need, you’re less likely to buy something because it “might” be useful in a dinner. You’ll know exactly what you need in advance.

 

Multiple Uses

Using new food for everything every day can be one of the best ways to tax your budget. In many ways, you’re almost paying for the restaurant experience, without getting the chef. One of the reasons you go out is for the fresh, premium quality ingredients; Though it helps that you don’t have to cook. In any case, one of the best ways to save yourself money (and time) is to plan meals which use the leftovers of a previous meal as part of the new meal.

Leftovers are almost sort of a dirty word in modern society, for whatever reason. Consumerism has taught us to reuse little, despite pushes for recycling and conservation. If you were to simply reheat what you made before though, then leftovers could certainly get old after awhile. Reheating leftovers straight hits two problems in particular: A) Most people don’t want to eat the same meal two days in a row, B) Most people don’t like the reheated incarnation of a meal as much as the original. How do you solve this dilemma and still use leftovers? Create new meals!

There’s nothing that says you can’t use your leftovers as part of a new dish. Whether you add the previous day’s leftovers to a casserole, stir fry, or even get a bit more creative with it, you can spice them up and make them just as interesting as the day before in a whole new light. And the best part? Having the leftovers saves a bunch of prep work. In most good meals you’ll have to spend time getting food ready to be cooked. However, since leftovers are already prepared and cooked, they can generally be tossed into a dish right away, which means less time and effort for you. If you do it right, the leftovers won’t taste like “leftovers” either. Win-win.

 

See the Savings

By just planning your meals when you shop, and effectively working leftovers into your planning, you can finally nudge down that food budget, all while not having to eat less or eat less well. You can still enjoy great, healthy, delicious meals without paying for it day in and day out. You can also follow the source link at the bottom of the article in order to find more tips on saving money on your food budget.

 

Source: How to Feed a Family for $15 a Day (Yahoo Finance)

Jobs Report

07 Nov 2011 at 19:38

pfblogger

Jobs

No Comments

The jobs report from this Friday isn’t grim, at least, initially it doesn’t look grim. Though, ultimately, it might be far less positive than it’s being spun. That’s the emphasis of today’s blog. There are competing views on our recovery. Most recognize that if we’re getting anywhere, it isn’t anywhere quickly. However, while the majority seem to feel that we are recovering, albeit at a much slower rate than usual, there are some experts who feel that what we’re going through is not a recovery, but a small bump in a much further decline still waiting to happen. It’s difficult to know who’s right and who’s wrong, but, either way, one thing is certain: jobs aren’t being created.

 

Getting Better or Worse?

Officially speaking, unemployment fell from 9.1% to 9%. It wasn’t a terribly notable improvement, save for the fact that it’s an improvement. The most notable feature of the improvement is that the terribly “double dip” scenarios posed by economic experts revolves around unemployment tipping past the 9.1% mark. If we continue to go down, then the future seems more positive. Unfortunately, jobs have been fairly unstable recently, and unemployment could erupt again. Thankfully, the holiday season is approaching, and, generally speaking, that means more jobs. While many of the jobs will be lost after the holidays, some will, hopefully linger, and the temporary boost in the economy could be the jump-start that’s needed to get the recovery truly going. All of that is idealistically optimistic though. In truth, the previous holiday seasons haven’t provided that spark, and there’s no reason to believe that this one will. However, it may help us prevent further losses, which can help until a real solution is put into place.

Unofficially speaking, our employment numbers might not be as cheery as they look. Other numbers, which include important figures, like those who are unemployed, but no longer feel like they can find work (and thus are not looking) and those who are working part-time but would rather be working full-time jobs. With these numbers included, we’re looking at an unemployment of more around 16.5%. This rate is shockingly high, and, if it was truly that high, we’d have already double dipped into the recession again. So, clearly, while this shocking number is important, it’s not necessarily the vital one that economists need to include in their assessments. If they needed to, they would have.

So, it’s unclear on whether or not we’re in a really good position with jobs. On the one hand, they’ve certainly improved in the past month, but, unfortunately, the job rate is actually much higher than we’d been led to believer, which means the situation is worse than we feared.

 

What to Do

If you’re looking for a job, keep looking. You may not find what you’re looking for, but you may be able to pick up temp work in the mean time, just to help a little. If you already have a job, likely a part-time one, then it’s possible that you could pick up another job, for a short time. Even if the chances for permanent solutions from these factors are slim, they will remain useful in helping to offset some costs with some extra cash, and may even free up some of that money to be used on other things.

 

Whether or not the economy is getting better won’t be detailed by one job’s report. And whether or not the job’s report is strictly accurate is somewhat irrelevant: people know that it’s difficult to find jobs, and if they let their representatives know, then there’s a burden on them to do what they can to cover their self-stated mandate to ensure that there are enough jobs in this country.

Debit Card Fees: Banks are Back Pedaling, What Does It Mean?

04 Nov 2011 at 14:27

pfblogger

Frugality, Savings

No Comments

Banks are a for-profit corporation, just like a grocery store, or a restaurant, or a cable company. Their purpose is to make profit and to grow so that they can expand. Traditionally, as I explained in a previous blog, they accomplished this goal by taking in investments. People would place their money in the bank for safe keeping, and the bank would use that money in order to give out loans to worthy customers, who, during the term of their loan’s repayment would pay interest which generates a net profit for the bank. Handle enough of this cash and loans and you end up with a very profitable business. However, banks, over the years, have advanced with the technology and offered more advanced services. These services needed to be paid for, so fees were implemented. However, where a fee is involved, a corporation will often look to it as another way to make profit, because the sole purpose of a corporation is to maximize profits.

With the recent debit card and credit card change, banks were making less profit off of the use of their cards. That’s an important point to keep in mind as well. Banks were making less profit, but were still allowed to charge enough money to both cover the costs associated with debit card use and even a bit of profit after the fact. They were still able to make a profit off of the exchange, just less of a profit. Why is that fact important? Because it indicates that the motivation for banks to try and implement debit card fees to replace lost profits was not a move out of desperation just to stay afloat, but, rather, a move motivated by the fundamental machinations of corporations: a drive to maximize profits. That motivation is not, in and of itself, inherently wrong. Its the profits of corporations which move society forward and provide the potential for anyone to make more money. And, whether or not one would feel that it was a bad decision would be irrelevant to the point of today’s blog, I bring it up only because it will help make another point.

 

The banks that were exploring debit card fees have announced that, at this time, they will not be pursuing them. It seems like a victory for the common person. Big corporations heeding the outcry against their actions and causing them to take a step back. In that, people should certainly take a measure of pride. What’s important about this move is that it lacks controversy. The government didn’t have to step in and enact further laws prohibiting banks from doing something, it was something which was done by the banks in reaction to what they saw from their consumers, it’s how capitalism and free markets are supposed to be run. So, while some people might still take issue with a particular point, in general, there’s little issue to be had here. It’s akin to an employer mentioning to their employees that they’re about to lay some of them off. The majority of the employees threaten to quit if their co-workers are laid off, the employer backs down. No laws are broken and the best interests of those involved are preserved without having to involve a third party.

However, if your employer threatened to lay off employees and backed off only because of the out cry, would you trust them like you had before? Neither should we be willing to get short-sighted about the intentions of the banks either. Their goal is to maximize profit and if they can’t do it with debit card fees, it doesn’t mean they can’t increase their revenue through other avenues. Banks can use existing fees, or even implement other fees in new areas, and there’s a good chance that they will be discrete about it going forward, to minimize the outcry. What does it mean? It means that consumers can’t allow themselves to get complacent, they have to monitor what their banks are charging them in order to make sure that they aren’t getting fleeced elsewhere. The stand against debit card fees was admirable, but if consumers truly want to save money and keep what they earn in their pockets, then they need to be active consumers, striving always to investigate where their money is going.

The Startup Problem

02 Nov 2011 at 01:13

pfblogger

Jobs

No Comments

A recent article brought to light a particular problem facing the current economy which a lot of people have seemed to miss. A number of economists have mentioned how the health of small businesses is vital to the American system. This fact isn’t entirely true though, and the point that everyone is missing could be a fatal flaw in our recovery.

The American Dream, as its fundamental, root level, is about achieving what you set out to accomplish. The specifics of that dream, as it’s presented, have often changed over the years. But all of the representations of the dream have been the material consequences of achievement. In a previous blog I talked about the “house, job, and family” dream which has been the root of what Americans have been striving for for roughly the past half a century.

Underneath the superficial examples of the American Dream are the very real principles of ingenuity and start-up potential that the country is driven on. Great American success stories are derived from companies like McDonalds, Walmart, Google, and even recent contenders like Facebook. Individuals with a concept or an idea manage to market it, build it, and create a brand off of it. It’s not small businesses that have driven the markets of America, and, consequently, the emerging global economy, it’s the start-up businesses, which have often begun as small, but emerged as large entities which create the most jobs.

What the American economy has seen, recently, is a lack of successful start-ups which were the reason that the economy boomed in the first place. When America was the only viable contender in entrepreneurship it held a monopoly of sorts which encouraged people to take risks, to begin new businesses and build upon ideas. But, with the rest of the world catching up, America no longer holds that monopoly and a competition to have the most fertile grounds for start-up has emerged, and America is trailing behind.

It’s not a quick bleeding wound. It’s not a catastrophic event. The collapse from the housing bubble had only a part to play, in reality it exposed the underlying fragility of our economy. While new start-ups have continued, the rate at which they have begun and subsequently shown success has slowed drastically over the past several years, the recent financial crisis hampering them. But if, as is suspected, the growth of startups has slowly been decaying over time, then he financial collapse could have been the kick through the rusty floor, which was just waiting to break.

There’s some out there that suggest that small businesses and startups may not be all that they’re lifted up to be as solutions to the current economic woes of the United States of America and the world. They point to evidence which shows that the majority of jobs are not in small business, but, instead, in large businesses. The critics point to the number of jobs lost by failed startups, which suggests that they could be harmful instead of helpful to the economy.

The one thing that those critiques fail to look at is that even though small businesses only comprise a small portion of the jobs created, startups aren’t exclusive to small businesses. A truly successful startup becomes a large business, and large businesses hire a lot of employees. Most businesses don’t start out huge, they don’t just form from breaking off of larger corporations, most companies were begun by someone with a dream, motivation, and access to resources. Not everyone is cut out to be an entrepreneur, but, one of the keys to a successful recovery is entrepreneurship. A successful recovery may depend on our ability to shape our market once more on the creation of new businesses, seizing opportunity as it arises and capitalizing on it.

Debit or Credit?

28 Oct 2011 at 00:30

pfblogger

Credit, Debt, Savings

No Comments

This is a topic I’ve talked about before, but it has increased relevance in light of the recent changes that a lot of banks are considering making (or are already in the plans of making) to their debit card systems. The changes could result in yet another shift in how consumers spend their money. Either way, the banks hope that they win out, the question is, which method is better for you, as a consumer?

 

Reward Programs

Many debit cards were coming with reward programs similar to a lot of popular credit cards. Even though you weren’t borrowing money, banks were making money when you were using debit cards for purchases, by charging vendors a percentage for their use. In order to encourage consumers to use debit cards, rewards programs were offered and you could gain points for spending your own money simply by using debit instead of paying cash.

However, at this point, debit cards are seeing a loss of reward programs across the board. Even if your specific bank isn’t tacking on a fee for the use of your card, there’s a good chance they’re reducing or cutting the rewards program for your debit card, and yet credit cards are still keeping and enhancing them. So, in general, if you’re looking to have your spending reward you and pay you back, then credit cards have the major advantage.

 

Convenience

As far as stores are concerned, debit cards and credit cards carry roughly the same convenience. You don’t have to worry about carrying cash, if you lose your wallet you can have your accounts frozen, and you don’t have to worry about change among other things. Most places that accept one will also accept the other, and, if they have minimums, they generally have minimums for both. Though, on occasion, some places will accept debit at a lower (or non-existent) minimum than credit. Minimums are one of the few ways that debit and credit cards can be inconvenient, since you don’t want to fork over $10 or more just to buy something simple. For those instances, most people carry small amounts of cash.

Debit cards will come with a bit of a guaranteed cost if you’re with a bank that’s beginning to charge for their use. Most credit cards operate under a model where they only make profit if you don’t pay off your balance before the month is over. However, if you have a platinum card, or its equivalent, you’re often charged a yearly fee which generally totals more than what most banks are planning to charge for their debit cards. On the flip side, such cards generally offer privileges that debit cards don’t come equipped with.

Credit cards are safer online. In fact, even if your debit card can be used like a credit card online, it’s better to not use it. In the end, the advantage here is split. Debit cards carry less risk (when not used online), and are more generally accepted, but credit cards offer valuable power and privilege.

 

Cost

As I mentioned when talking about convenience, credit cards only cost something if you don’t pay them off right away, assuming you don’t have a high-class rewards card. Debit cards are generally free to you, unless your bank is one of the banks which is considering adopting a fee. Even still, a credit card is only cheaper if you pay your dues on time, though, if you’re using it just as you would a debit card, that shouldn’t be an issue. The advantage here depends on your fiscal responsibility. If you can be responsible: advantage credit card. If you can’t: advantage debit card.

 

Ultimately, whether or not debit cards or credit cards hold the advantage going forward are up to you. How do you tend to spend your money? Do you like to be rewarded for your spending? Can you restrain your spending to what you can afford at a given moment? You know best what you’re capable of, so the decision of whether or not to use credit or debit is up to you. Each one presents the opportunity to be the most cost effective depending on how you use it.

Volunteer Work

27 Oct 2011 at 02:15

pfblogger

Jobs

No Comments

Many people are still looking for jobs, still going through the grind of finding and applying to and waiting to hear from employers. People are sometimes lying, sometimes cheating and otherwise manipulating the system. The race for jobs has become extremely competitive, such that everyone is looking for an edge, looking for a way to not be one of the 9% unemployed. As such, it’s important to distinguish yourself and showcasing your volunteer work provides an opportunity to separate yourself from the rest of the pool.

 

Your Resume

Your resume is your own self-portrait to employers. It can be an eloquent, succinct piece which says everything it needs to in as little words as possible, or it can be a bloated, sloppy, disaster that causes potential employers to look the other way and consider other opportunities, in spite of your qualifications. Even if your resume is written well, if there’s nothing distinctive about it, then it reads just like every other book you can buy for a dime. It’s nothing special, nothing new. So, how do you make that special distinction? How do you cause your resume to read different from all the others? And, more importantly, how do you do it without lying or fudging the information?

Education, Experience, and Skills. Those are the credentials of a typical resume. They all have specific formats, information that is required. For instance, for your education you put the institution name, the year you graduated, and what sort of degree you graduated with. People will also usually give up their GPAs as another way to give an edge. Experience usually lists the names of employers, range of employment and details of the duties. In these areas one can often distinguish themselves, but even exceptional details about work experience and education are becoming more and more common these days.

 

Volunteer Work

Volunteer work doesn’t just mean for charity, though charities are certainly worthy organizations to put up on a resume when applicable. With unemployment so high, a lot of qualified individuals have taken work for free, volunteering at organizations in order to get experience and/or get a foot in the door with the industry. Many people already list these experiences, it’s why they participate in the work for free. However, not everyone mentions that their work was volunteered. Why include that particular detail?

  • Work is done for compensation, if money isn’t a reward then the motivation must be intrinsic
  • Intrinsic motivation is much more valuable than extrinsic motivation
  • Employers will hire intrinsic motivation

 

This isn’t an all-inclusive detail. However, in many cases, it might be valuable to reveal your passion for your field and give potential employers a chance to see your motivation. Employers want employees with passion. There’s plenty of employees who are qualified. Plenty of employees with experience. But there’s not always a whole lot of employees who are passionate. You won’t want to mention your volunteer work in every circumstance. Not every employer is going to take kindly to every volunteer position. The point is not necessarily to gab about how amazing you are, and how generous you can be. Instead, shrewdly choosing volunteer work which highlights potential on-the-job skills. The volunteering is just the icing on the cake. The real substance is in the things that you accomplish, the skills that you learn, and how the work has made you a more qualified candidate, you can just reveal that it was volunteer work as you detail how it reflects your passion or your determination, whichever fits.

 

It’s not always easy applying, and it’s certainly not always easy coming up with a resume which feels like it captures everything that you are. While resumes do a pretty good job of summing up experience, they can do more. Adding your volunteer work can be a valuable asset which shows your passion, your good nature, and your willingness to suffer through sacrifice to meet your goals. Nothing distinguishes a candidate more than those attributes. Before you write off your volunteer work as “Experience”, you might want to consider adding a new section to your resume: “Volunteerism”.

Piggybacking

26 Oct 2011 at 00:02

pfblogger

Credit, Debt

No Comments

It’s not easy to get a great credit score. It’s not difficult either, it just takes a lot of time, consistent payments, and plenty of credit. However, if you make a mistake your good credit can dissolve, leaving your hard work in tatters and making it difficult to do things like rent an apartment or hike up interest rates on new and preexisting debt.

An option is possible for those with declining credit scores. Termed “piggybacking”, some credit repair companies will attach someone with a poor credit score to the credit accounts of someone that they have a legitimate credit connection with: spouse, parents, or children. The term for these people are “legitimate authorized users”. By attaching one’s self to a legitimate authorized user, someone with poor credit can “piggyback” on their good credit and use it.

 

FICO 08

The rampant abuse of the “legitimate authorized users” extension of credit led FICO to implement a new scoring model which eliminated the possibility of authorized users. Initial public reaction was volatile. The legal uses of legitimate authorized users include stay-at-home spouses and others who might be dependent on the legitimate authorized user. In these cases, such individuals aren’t capable of generating income or accumulating credit scores. The only way for these individuals to use credit is to attach themselves to legitimate authorized users. With the FICO 08 implementation, they wouldn’t be able to.

As a result of the public resistance, FICO stopped pushing its FICO 08, instead, they developed a new system which didn’t completely deny the use of legitimate authorized users, but, according to FICO, better vetted out the abuses in the system. Despite this, FICO 08 was implemented in thousands of lenders systems. Bad news for legitimate and illegitimate piggybackers alike.

 

Worth It?

Some might be wondering if it’s worth it to go with a credit repairing agency that utilizes piggybacking in order to accomplish its goals. Even though it’s not strictly legitimate, it’s not exactly illegal either. As a result, more and more people are inquiring about the methods used by credit repair companies and their legality. Responding back, some credit repair agencies have confirmed that they can still pull off the “piggybacking” scheme to help out individuals with damaged credit.

The response of many lenders seems to be to adopt the FICO 08 system and exclude all ability to piggyback: legitimate or illegitimate. It’s not a universally adopted system, likely due to its controversial nature. As a result, not every lender has instituted the program, which means that whether or not the piggybacking works is all up to whether or not someone’s lender is using FICO 08. If they are, then piggybacking won’t work. If they don’t, then it’s possible to get away with it.

So the question is: is it worth it? Ultimately, there’s nothing stopping an individual from rebuilding their credit the old-fashioned way. Unless, of course, they fall under the legitimate reasons for needing to “piggyback” on another’s credit. In that case, you may need to do some research on your lending institutions to see what programs they offer that will allow you to help use your credit for those that are dependent on your financially. It’s probably not best to term it piggybacking officially, but if you have legitimate needs you can still find legitimate means.

Getting a Deal

25 Oct 2011 at 00:12

pfblogger

Budget, Frugality, Savings

No Comments

Sal was browsing the web, currently hovering over the Google page and reading through the results. His friend Emil had tipped him off to a new way of buying cars without the hassle of banging his head against a wall, that wall being a dealer trying to make as much bank as they could to wring out the maximum benefits of commission. It was a painful experience, one where he could feel the other man’s condescension like saliva from a dog’s mouth.

There was an undeniable stench to dealerships. Amidst all the odor of “new car” smell, faux-leather interiors, plastic paneling, and the stale scent of bad coffee was a feeling so strong that it invaded the nostrils. One could literally smell the fake atmosphere of pleasantness. The facade of warmth couldn’t even breach skin deep. Nowhere was more shallow than a car dealership. But their “smell” didn’t change the fact that he had to buy a car when he needed one.

It wasn’t an easy decision to make though. It was hard trusting another guy to do your business. Sal might not have been the savviest of hagglers, but he knew he could generally drop the price a bit below asking. How could he trust that the car brokers weren’t pulling the wool over his eyes? He wasn’t going to know what asking prices were on all of the cars he was vetting. What if they could get lower, but didn’t? Pocketing the difference for themselves.

Emil had swatted down most of Sal’s fears when he voiced them, but the stubborn anxiety wouldn’t go away. Even when Emil explained to Sal examples of methods that some of the companies used in order to solidify their legitimacy. For example, many of the companies offered price guarantees, offering to pay back the difference if Sal was able to find a lower price for the same vehicle within a certain amount of time.

Other companies charged flat rates, charging up front for their services. Everything was transparent. Sal would be able to see how much he was paying for the car, which he could compare against its reported value, and see how much he was paying the broker to book the deal for him. It took a little bit more leg work, but it was worth it for the credibility, and he didn’t have to go through the hassle of haggling. But, even with that assurance, Sal still felt unsure. Unwilling to put his full trust in an industry that was made to do something he felt he should be doing himself.

If Sal needed to buy an orange, it didn’t make sense to pay a guy in order to buy the orange for the best price possible, because, in the end, you’re not paying for the best price: you’re paying the discount and the price you paid in order to get that discount. Ergo, you’re not getting the full discount. It seemed odd to pay for such a thing, but, at the same time, Sal was certain he never truly got the best price, was it worth paying money to ensure that he got the best price possible? Would he still be saving money that way? That was the question that needed to be answered.

If he could save enough money by going to one of these brokers, then it would be worth the expense, even if it wasn’t the very cheapest he could possibly get a car, since he’d never be able to get a car for that price anyways. That was the goal, in the end, saving money. Sometimes you had to spend money to save money. Sometimes you had to let go of your pride. Even if his gut told him it wasn’t right, he had to use his mind and look at the evidence presented to him. It was time to buy a car.

← Older Entries