Archives For August 2009

I’m behind on my book giveaways so this week I’m going to try to do a giveaway per day. Today’s giveaway is the book, Does Your Bag Have Holes? 24 Truths That Lead to Financial and Spiritual Freedom* by Cameron Taylor. This book was written for Christians so it may not interest non-Christians. The book itself is hard to define. It’s a little bit personal finance with a touch of politics and whatever else the author wanted to touch on.

I liked the book but found some of the advice a little simplistic. For example, the author talks about building wealth through real estate. He suggests buying your first house with a 15 year mortgage. Then when it’s paid off, borrowing again to buy another house to rent out, using the rent payment and the money that was used to pay the old mortgage payment to put towards the new mortgage. Then once that’s paid off, buy another rental house and so on… While the advice isn’t necessarily bad (or good), the details are slim and he left out important considerations like interest rates, housing prices, etc. Granted, that wasn’t what the book was about but I would have preferred more detail.

Another knock against the book are the illustrations, which are cheesy-looking. The author should have spent some money and hired a professional illustrator.

All that said, it’s still a good book. I agreed with most of what the author said (and he said a lot!).

If you are interested in reading the book, leave a comment below and I’ll enter you in the giveaway. The winner will be announced tomorrow morning. All I ask is that you remember my two rules regarding giveaways:

1. You must be a resident of the U.S. or Canada (I WILL NOT ship internationally).


2. You can only enter the contest ONCE.

Good luck.

*Affiliate Link

Here’s today’s Question of the Day:

What was your first job?

My first job was working for a restaurant called O.K. Corral in the town I grew up in. It was a restaurant that took over the building that was vacated by Sonic. My job was to get clean and cook. I HATED THAT JOB! HATED IT! I remember one night the assistant manager sent everyone home around 8 PM and then we got really busy and I it was just me and the assistant manager running things. I wonder how many orders I screwed up that night.

The owner was a slimeball who actually tried to burn the place down. I worked there for about 3 months I think. After that, I went to work for the grocery store in town. It was a much better job.

What was your first job?

Saw this article on MSN this morning: 6 Benefits of a Bottom-Rung Job

According the author, Paul Facella, there are six benefits to starting in a low-level job:

1. Teaches you the ropes. In my opinion, there’s nothing worse than a manager who doesn’t know what things are like down in the trenches. I realize that not all managers can do every job, but there’s nothing wrong with experiencing what employees go through on the front lines. Those who start at the bottom and work their way up, have that advantage.

2. Hones your work style.

3. Refines relationship skills. This is very important. There’s nothing like trying to balance friendship with trying to move up the ladder. Some people will be offended by your desire to move up the ladder. That said, learning how to deal with people from all positions within the company will help you go far.

4. Creates opportunities.

5. Forms networks. Depending on your position and company, you will have the opportunity to meet lots of people and have lots of networking opportunities.

6. Reinforces humility. Yes, starting at the bottom can be very humbling. I know this is tiny in comparison to losing a good job and having to start over, but when I first moved to Texas, I took a second job at IHOP as a dishwasher/bus boy. I had a pretty good position of manager trainee with the grocery chain I worked for and found it quite humbling to go work as a bus boy at a restaurant and having to take orders from other people.

One thing the author points out, which is very important, is that it matters a lot who you work for:

“…before you take just any “starter job,” you should find out if this is a goal- and growth-oriented job, as opposed to a dead-end job. In your interview, it is perfectly fine to ask such questions as: What percentage of your mid- to senior-level managers are promoted from within? What programs and policies are set up for helping high-achieving employees develop new skills? Is mobility at this company limited, or could one apply for jobs elsewhere in the company for which one is qualified?”

In other words, it’s not enough to get a low-level job, work hard, and expect to move up automatically. You have to make sure the company you work for will be interested in promoting you.

NOTE: Paul Fracella wrote the book, Everything I Know About Business I Learned at McDonald’s*

*Affiliate Link

Student Loan Sob Story

August 26, 2009

I’m only writing about this because the guy in this story left a comment on this post along with a link to his website, No wonder why this guy wants his debt forgiven and why he founded his website:

My name is Robert Applebaum. I am a 35 year old attorney from Staten Island, NY and the founder of This movement began as a proposal I wrote one morning on a Facebook Group called “Cancel Student Loan Debt to Stimulate the Economy.” This is my story:

I am a 1998 graduate of Fordham University School of Law – an education I financed through the Federal Stafford Loan program. By the time I graduated from law school, I had amassed approximately $65,000 in student loan debt.

Starting in 1999, I began working as an Assistant District Attorney in Brooklyn, N.Y. where my starting salary was $36,000 per year. With a strong desire to use my education to serve my community, I was forced to place my loans into forbearance because I simply could not afford to make student loan payments while paying rent at the same time.

Thanks to “capitalized interest” – a racket whereby interest continues to accumulate, which then gets tacked onto the principal, the amount I owed grew exponentially over time. After five years of service as an ADA, while watching my student loan debt grow at an alarming rate, I was forced to make the unfortunate decision to leave a job I loved simply because I felt that I needed to begin to pay down my student loan debt. But for that debt, I likely would have continued in public service indefinitely.

For the next five years, I made regular payments on my student loan debt, never once defaulting on my loans and I continue to make payments to this very day. Despite five years of regular payments, and because of the first five years during which my loans were in forbearance, my principal loan balance is more than $20,000 higher today than it was on the day I graduated. Unfortunately, I’m not alone.

Apparantly Mr. Applebaum has NO IDEA how interest works. You see, people and companies don’t loan money for free. The $65,000 Mr. Applebaum racked up had to come from somewhere. It was loaned to him with the stipulation that it would be paid back at some point in the future with interest. Mr. Applebaum didn’t understand this and then when he figured out he couldn’t pay back the loan, he was surprised to find out that the interest was being tacked on to his loan amount, and therefore increasing his debt.


Come on Mr. Applebaum. You’re a lawyer. You can’t figure this stuff out?

You made a mistake and it shouldn’t be up to the American taxpayer to bail you out. Instead, why don’t you look for a better job or move to a place with a lower cost of living so that you can afford to pay back your loan and pay rent?

I don’t mean to pick on Mr. Applebaum. But, publicizing his plight and asking for the Federal Government to step in and magically wipe away his debt is just too much for me to handle.

Stacey sent me a link to this piece on forgiving student loans. It’s short, so read it and tell me what you think. The main question is:

Should we forgive student loans as a way to stimulate the economy?

I say NO. Actually I say HELL NO!

Lots of college students bought cars too. Should we forgive those loans too? I’m joking of course, but how far are we supposed to take this loan forgiveness stuff? It’s silly if you ask me.


Thanks for the link, Stacey.

RELATED: Smart Spending: Should Feds Forgive Student Loan Debt?the comments are along the same lines as AFM’s readers.

Check out this graphic I found on the myFICO website:


I took the information found in that chart and made another graphic showing just how much interest a person would pay over a 30-year mortgage depending on their credit score:

FICO and Mortgage Interest

As you can see, the difference is significant. Just moving from the second highest to the highest FICO Score ranges saves you nearly $10,000 in interest over 30 years (even more if you factor in growth on the $27 per month payment difference). The difference from the lowest to the highest ranges, is nearly $100,000 in interest expense over 30 years (or nearly $200 per month)!

My advice to anyone looking to finance a purchase is to first GET A HANDLE ON YOUR FICO SCORE! The $16 spent to find out your score is an investment—especially if you have no idea what your FICO score is. The information provided to you by myFICO is easy to understand. They also show you areas that are hurting your score and things you can do to improve it.

Then take the time and effort to improve your score. Remember the two most important areas of your FICO score are:

• How timely you are with your payments, and

• How much you owe compared with your total available credit.

I would keep those in mind, along with the other items that go into calculating your credit score (found here) if a major purchase in your future.


My FICO Score is 794. What’s Your Credit Score?

The 2009 Personal Finance How-to Roundup

Bureaus Roll Out New Credit Score Formula for 2009

How Long Will It Take to Improve a FICO Score?

In the spirit of the back-to-school season, I thought I share with you Kiplinger’s list of Ten Things College Students Don’t Need. Here are the first 5 from their list (along with my thoughts in italics):

1. New Textbooks. To avoid paying unfathomable new-book prices, see whether your university offers a rental program—or rent from a Web site such as, where you can save up to 85%. Order the book for a one-time fee—for example, about $60 plus shipping for a $180 calculus book—keep it for a semester, then return it with free shipping, or you could buy it. Or, head to the used-book lot. For example, searches the Web for the best prices on used textbooks.

Textbooks are such a ripoff! It’s simply ridiculous that a textbook should cost anywhere near $100, much less several hundreds of dollars. Not only are they expensive but students get ripped off when reselling their textbooks at the end of the semester. I remember keeping my textbooks just so I wouldn’t give the campus bookstore the satisfaction of ripping me off. I still use some of those textbooks.

2. Big Meal Plan. Brain food is important, but avoid loading up your child’s meal account with enough money to feed the football team. It’s best to start with a low number of meals and see how much your student uses. Many colleges will give you the opportunity to replenish the meal plan midyear. You could also supplement your kid’s meal plan with gift cards to the local grocery (or the local pizza joint). Or you can buy gift cards at

I lived at home while going to college so this wasn’t a priority for me.

3. A High-End Laptop or Desktop Computer. An inexpensive laptop should meet your student’s computer needs. For example, you can buy an Acer Aspire One, which has a 10.1-inch screen and weighs just 2.4 pounds, for less than $300 at Best Buy, WalMart or Target. Be aware, though, that netbooks don’t have DVD drives or huge amounts of storage space, so it’ll cost extra to get plug-in external drives or memory cards.

4. Printer. Here’s what you can save by skipping this unnecessary item: about $50 for a printer, $30 for replacement ink and $9 for a pack of paper. For about $10, your child could buy a flash drive instead, save his 20-page term paper on it and print the paper in the campus computer lab, which you may already be paying for. Some schools include a technology fee in room and board costs—$100 per semester in some cases.

5. Cable TV. These days, you don’t have to foot a hefty cable bill when your child can catch the latest movies and TV shows online., and let you download current TV shows for free. The movies offered on these sites are slightly old, but you can get a Netflix DVD-rental subscription for as little as $5 a month.

DUH! They are in college! They should be studying…NOT watching TV!

The full list: 10 Things College Students Don’t Need