Friday, March 21, 2008

Job Opportunity Scams - The Team

I've talked to a lot of people lately that are either thinking about joining or frustrated and leaving all of these scams that are out there. You know what I'm talking about: Pyramid Schemes, Multi-level Marketing, etc. The bottom line is, all of these organization make ridiculous promises to desperate people and end up wasting their time and money.

Specifically I have been hearing a lot about one particular organization, The Team.

It really frustrates me that these organizations go out there and talk about "opportunity and leadership" while at the same time not mentioning how their program actually works. What they do is they try to win you over on principle. Ironically, the team actually claims to be a Judaeo-Christian organization which helps them infiltrate community events. Their entire business model is based off of selling via personal relationships. That means convincing the lower-level people to go out there and sell to all of their friends and family (typically ruining their relationships).

Members are also encouraged to purchase numerous cds, books and other useless add-ons that they make even more money on. This is in addition to ordering through "The Team" catalog for all of their personal items.

Here are some first person accounts on how The Team is a scam:
7 Years:

So please, warn your family and friends of this empty promise, show them these websites and save them (and you) the headache!

I invite you to check out some resources on the subject:

Thursday, March 20, 2008

Funny Comic #2

I found this one amusing, how much of our book knowledge is actually put to use? I'm surprised she didn't use a graphing calculator, isn't that what we were trained to do?

Wednesday, March 19, 2008

Investing in the Stock Market

Seeing as how the stock market has been taking a hit lately, I bet a lot of you are considering picking up some stocks that have gone down. I personally do not see this as a terrible idea, but I think it is a serious decision and you should watch out for a couple of things:

Stocks go Up and Down
This is an easy thing to acknowledge when the market is pretty flat, but when it becomes more volatile people tend to panic. This is exactly what a lot of people are doing now. The thing is even if you buy stocks for cheap now, they make go down even more before they go up. Does that mean you shouldn't buy them? Well not necessarily, but you need to be patient and control your reactions.

Balance is Key
By having a diverse stock portfolio you can rest assured that even if some of them are going down, the loss is minimized because it stretches across the boards. Since most companies are not planning on going out of business, it is a safe bet that your stocks will level out EVENTUALLY

Do not "Hope and Pray"
The biggest mistake people can make is just blindly putting money into any stock. You want to do your research about a company to make sure it is in financial shape. An easy way to track general info. is through news sites like Yahoo Financial.

There are a lot of other things I could mention, but these are a good place to start. Remember to ask any questions you may have.

Monday, March 17, 2008

Starting a Business

While I was in school I started a business to earn some extra cash, it also looks good on a resume to say you were responsible enough to do it.

Starting a business is not as difficult as one may think. While there is a lot of work involved with the various aspects of marketing, cashflow, etc; actually filing the forms to start a company is pretty easy. This varies, of course, depending on the structure of the business you select. That is why to keep things simple, I'm going to talk about an LLC with only one owner (you!). Before you file your documents you really need to ask yourself a couple things:

1) What you are going to do or sell?
This can be a product or service. I have heard services fixing computers, selling on ebay, cutting hair, help writing papers/studying, etc. You could also try to sell something; maybe a unique item that you can make or a web page you can design.

2) What your name is going to be?
A good rule of thumb is to pick a name that describes what you do and what you stand for like "Friendly Computer Repair" or "Fast Hair Cuts". Of course these are simple and you could probably come up with something better, but you get the idea.

Now that you have the preliminaries done, you actually need to do it! Here is how:

1) Find the form

Once you are done with these you can head to your state's website and search for the forms section. You are going to be looking for "Articles of Organization". Do a little research about your state and make sure it is a state that is good for LLCs. Most are, but sometimes states have a history of treating various types of companies poorly.

2) Print and fill out the form and mail!
Not very complicated here, just make sure you spell everything correctly and sign! Usually there is a filing fee, so make sure you write a check!


In a few days or weeks you will be sent back the same form stamped, approved, or what have you. You have now done the basic steps required to create your company!

In the future you will have to worry about:
Tracking Financial Info for your business, Taxes, etc. Feel free to ask me about these now, but I will be posting about them more in the future.

Thursday, March 13, 2008

Paying Down Debt vs Investing

I think a very common quandary that people end up in is deciding whether they should pay down their debt or invest in their future (typically retirement accounts like 401(k)s. Although I intend to address this topic more thoroughly later I think there are some specific situations that have easier answers and I will attempt to sift through the main ones.

The Credit Card Rule: Alright, first and foremost you always want to pay your credit cards down. Having high revolving balances on credit cards is the most damaging to your credit score and usually your wallet (credit cards typically have higher interest rates).

The Private Loan Rule: Private college loans do not have nearly as many benefits in terms of taxes and interest rates as due federal loans. Because of this it makes sense to pay them down as much as possible. Ideally you don't want any debt, but private loans are generally worse than federal.

Always Plan Ahead: In general it is a good idea to at least invest some portion into an IRA, 401(k), etc. Even if it is only $50, for most people this is the easiest way to invest. Since it is pre-taxed dollars you save double time. Once your cashflow starts to really improve you may look into real estate investing or some other method where you have more direct control over your money (instead of leaving it up to the company and its management). You may even be interested in starting your own business!

Like I said, I will attempt to explain more of your options in future posts, but for now hopefully this helps you out!

Sunday, March 9, 2008

Eating Frugally

Unfortunately with all of the advertising and marketing that is thrown our way (meaning recent college grads and college students in general) it is difficult to cut down on excessive spending. Especially when one of your friends is telling you how great their new gadget or outfit is.

The same can be said when you are in need of an energy boost in the form of some sort of energy drink or other caffeinated beverage or when you do not have time to pack a lunch.

Ipod: $200, Mocha Frap: $5, Jimmy Johns: $10
Not being able to figure out why it is going to take you 3000 years to pay back your college debt... priceless.

It sounds funny, but the numbers really don't lie. If you fare on the more excessive side and eat out for all three meals you are probably spending around $5 for breakfast, $10 for lunch and $10-15 for dinner. Maybe at the same time you do get a coffee, pop or other snack totaling another $5 dollars. Your final number is about $35.... for one day! Multiply that by 30 and you are up to over $1000! If you are making $40000/yr out of college you are spending almost 40% of your income on food and snacks. Of course most people may only eat out once a day, but it still adds up:

5 X Sandwiches for lunch at a deli @ $6 = $30

1 Loaf of bread + deli meat/cheese = $10

If you really want to go the extra mile you can take the free packets of dressing from cafeterias, etc. My point is, even in this example you can save 66% and brown bag it.

Wednesday, March 5, 2008

Credit Card Offers

I just received another three credit card offers in the mail today, what a joke! Just read the fine print people, they claim a low interest rate but that "guarantee" is always subject to your credit score and history. Chances are if you have only had credit a short time you will not get that rate.

Some quick things to watch out for:

1) 0% balance transfer offers (these almost always include a fee based on the amount you are transferring

2) "Guaranteed" APR and credit limits, they are always subject to your credit score

3) Applying for too many cards (this results in a lot of inquiries that lower your credit score, it takes two years for these to go away)

4) Defaulting on cards: your interest rate will be bumped up to the highest APR that is legally allowed (usually around 24%!!!)

5) Pre-approved offers do not mean you get the card, they can still deny you. In fact, go to a website yourself and shop for a card that works for YOU. You have access to the same deals they send you in the mail that you can apply for yourself at any time, so don't feel rushed!

Want to compare cards? Try this site:

There are options on there if you have no, little, or bad credit!

Image courtesy of

Monday, March 3, 2008

Funny comic of the month

Another timeless bit about the irony of being "college educated".

Exit Loan Counseling

Although a lot of it is repetitive and not necessarily ground breaking, exit loan counseling can indeed provide some insight into your financial future after college. I found the question "Do I have to pay my student loans back?" to be a little silly, but there are at least some terms and explanations that I found useful. Hopefully I can help save you from reading every single detail. Here is what I found useful:

Repayment Options:

1)Standard repayment
2)Extended, long-term, Graduated repayment
3)Income-sensitive repayment (for Federal Stafford loans)
4)Income-contingent repayment (for Federal Direct Stafford Loans and Federal Plus loans)

Really, the names do a good job of summarizing what each type means.

Standard repayment comes down to equal monthly payments for up to 10 years (excluding periods of deferment and forbearance - more on these later). It's relative simple or "standard". This tends to be best if you can afford the payments. Typically it is ideal for people who have lower balances or people that can afford to pay higher balances. It is also ideal for minimizing the interest you will pay (it has the shortest term).

Extended/Long-term extends your repayment period so your monthly payments are less (and you have better cashflow). The problem is you will pay more in interest the more you drag the loan out. You also need to make sure your loans can be extended (guaranteed Stafford loans have to be consolidated first). This would be better if you really need the cash flow and cannot afford higher payments.

Graduated repayment is tricky because you do not have to be graduated!It just means your payments start low and increase over time. I personally do not recommend this route unless you can 100% guarantee you will be making significantly more money in the future (and I don't mean you hope you will). The problem is you can end up having large payments sneak up on you over time. This happens to a lot of mortgage owners that choose balloon payments!

Income-Sensitive Repayment is based off of your annual income. The benefit is that you will probably never have to worry about not being able to afford your loan payment. The downside is that you could potentially accrue the most interest and lose the most over time. Of course, in my opinion, why not choose this option and pay more towards your loan if you have the cash? At least it gives you the flexibility to say you cannot afford it in a month that you are strapped for funds.

Income-Contingent Repayment is for federal direct Stafford loans and is adjusted each year based on your income.

This is a great resource for answering any questions you may have, of course you can always ask me as well:


I'll get more into these later but to sum things up:

Deferment: Pospones principal and interest payments for specific periods of time when you meet the certain conditions. The conditions are typically set by the government and are usually based on financial need. This is the one you want though because the government is making payments for you. The payments are on the interest, however, not the principal (so they are saving you a minimal amount and some time).

Cancellation: Total or partial forgiveness of a loan for specific reasons. This could be like your school evaporates or closes its doors. This rarely happens.

Forbearance: A temporary suspension of payments, an extension of time for making payments, or a temporary reduction in the monthly payment amount. Most people end up getting forbearance if they get anything. Your loan companies will want to give you forbearance if it means getting payments on time. Typically they will work with you (as long as you are persistent) because it really is in both your and their best interests. You do not want to default or look like you made any late payments because it will damage your credit score.

Well hopefully that saves everyone some time, let me know if there are any questions (remember I am still learning a lot of this stuff as well!).