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Featured Article Jon Stewart vs. Jim Cramer on The Daily ShowLast week I posted a video clip of the “The Daily Show with Jon Stewart” exposing the so called experts and executives who don’t know what they are talking about or just plain lying. In the video Jon Steward blasted Jim Cramer, of “Mad Money” for telling investors that, “Bear Stearns is not in trouble…and…it’s [...] |
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Here We Go Again! I Have to Write Another Letter
Here we go again. I have posted previous articles about I have to write letters to companies that try to screw me (see Related Articles links below). Below is another example of an issue I had which caused me to write a letter to get the problem resolved.
I had an issue with a company (that will remain nameless) that promised to refund me $1,462.94 for poor service. I was happy to get the refund because on several occasions I contacted telling them of the problem. They initially stated their was no problem. I then sent data showing the problem and requested a refund. A couple days later they responded saying they found the problem as a result of my feedback and would refund me $1,462.94. I was happy with that and agreed to the offer.
However, a few days later when I contacted them and asked when will the refund be sent, the rep. told me it was changed to $727.80 by management. I was furious! I then sat down and wrote the letter below. After emailing the letter, the rep. responded within ½ hour that the $1,462.94 will be paid. Management had changed their mind again. I wonder why!
———————————————————————————————-
P. Birmingham
XXXX XXXXX XXX
XXXXXXXX, XX XXXX
XXX-XXX-XXX
February 23, 2010
Dear XXXXXX XXXXXXXX,
Please forward this letter to the person responsible for not refunding me the $1,462.94 that was agreed upon between XXXXXXX and me per your email sent to me on February 19, 2010 which stated: “Hi Patrick, I was able to get back a number from management. After looking at your documents, they are willing to refund a total of $1,462.94. Please reply to this email to confirm that amount. Thanks”. I agreed to the amount via a reply email.
I think it’s very poor customer service to inform me that a problem was found as a result of feedback from me and then to inform me days later that I will only be refunded ½ my money. This is totally unacceptable!
I have wasted a lot of time, energy and money trying to identify and fix the problem. I made several phone calls, sent several emails with data showing why I thought many of the XXXXXX I purchased were XXXXXX. At first I was told there was no problem and was given suggestions on how to XXXXXXX XXXX XXXXX which didn’t work and resulted in me spending more money for XXXXXX XXXXXX.
I was finally delighted that the problem was found as a result of my feedback, the problem would be fixed and I would be refunded $1,462.94 for XXXXXXX XXXXXX I paid for.
I am requesting the full refund of the $1,462.94 that was agreed upon. I do plan to use XXXXXXX (if things are fixed) and I’m certain I’ll spend thousands of dollars with XXXXXXXXX over the next several weeks/months/years.
If the promised refund isn’t given I will write your C.E.O. (XX. XXXX XXXXXX) and C.O.O. (Mr. XXXXXX X. XXXXXX) a letter of my dissatisfaction!
Sincerely,
_________________
P. Birmingham
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Power Your Home with The Bloom Box
Last night 60 Minutes had a very interesting news segment about potentially powering your home with The Bloom Box (from Bloom Energy), eliminating the need to purchase electricity from your local power company.
The Bloom Box creates electricity by feeding oxygen into one side of a fuel cell while fuel is fed into the other side to provide a chemical reaction. The fuel source can be solar, natural gas, bio gas from landfill waste, etc.
The Bloom Box is currently being used by companies like Google, FedEx, Wal-Mart and eBay saving them money. The corporate sized units cost $700K to $800K, however, according to K.R. Sridhar, founder of Bloom Energy, 5 to 10 years from now home units could cost about $3,000.
Bloom Energy is to release more details this Wednesday. See the 60 Minutes Below. Very interesting stuff!
Update on February 24, 2010: See Bloom Energy Press Releases:
My Lending Club Account Performance Update 2
My previous update of my Lending Club Account Performance was back in September 30, 2009. How time flies by so quickly. I promised then to do periodic updates of my account performance.
Since then I’ve deposited an additional $20,000 in my account because Lending Club was paying a 1% bonus to deposit and invest the money by the end of December 2009. That’s another cool $200 in bonus I couldn’t resist.
Since I’ve invested in Lending Club, loan payments to date total $3,041.23 with zero late payments or loan defaults. That is very good news. I hope the trend continues.
I have only invested in A, B and C borrowers which are the lowest risk borrowers; however, the return is lower than the more risky borrowers (D, E, F, and G).
I currently have 353 outstanding notes (loans to 353 individuals) ranging from $25 to $250. As the money is paid back I’ve reinvested it to other borrowers.
Since I started funding notes in August 2009, I’ve earned $669.78 in interest, but with bonuses I’ve earned a total of $1,492.20. The net annualized return estimated is currently almost 11%. See screenshot below of account summary.
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Do Your Taxes Online for Free with H&R Block
If you have a simple tax return, where you normally use the 1040EZ then you can do your taxes for free with H&R Block Online. Some people are paying at least $50 to do have someone do their returns when it’s easy to do it online.
H&R Block is also offering federal efile which also saves you the cost of paper, stamp and envelope.
If you have a simple tax return, H&R Block Onlinex Free Edition is the easy way to do your taxes and get your maximum tax refund.
Of course if the free version doesn’t fit your needs, H&R Block offers very affordable online tax software which comes with free live tax advice. To learn more visit H&RBlock.com.
When in Rome, Don’t Do What the Romans Do
I’ve been watching a lot of “American Greed” on CNBC lately, and it reminds me of someone that I know personally. For privacy purposes, I’ll call him Bob.
When I first met him, I was very impressed with him. Bob lived in a sprawling mansion in a gated community with expensive cars parked outside his home.
This week I found out he’s currently in federal custody, looking at up to 30 years in prison with a $1 million fine, as a result of his white collar crimes. He has plead guilty to bank fraud and conspiracy to commit bank, mail, and wire fraud in connection with a scheme to fraudulently obtain millions of dollars of mortgage loans from lenders.
Bob is 4 years younger than me and when I first met him I thought to myself, “Wow, this guy is doing very well. I wonder what he does for a living.” I quickly learned from Bob that he was a real-estate developer who built million dollar custom homes and he also owned a real-estate investment company.
I was interested in learning more about Bob’s business and one day he explained the process to me. Basically, his real-estate investment company helped people find homes below market values, where he would help renovate (if needed) and help to put section 8 tenants in the home, all this for a very steep fee of up to $30,000. People flew from all over the country to have Bob hold their hands to invest with him. He would wine and dine them and when they visited his mansion, they were hooked!
Bob said if I was interested in investing with him to let him know. At the time I was laid-off, so I told Bob there was no way I would be able to get a loan because I was unemployed. He told me he could help me get a loan by stating I was a consultant employed by his company. That would have been totally illegal, but at the time I didn’t think about it. However, there was no way I would invest with Bob because I would never pay his hefty fees of up to $30,000. I would do the work myself.
What Bob failed to explain to me back then, which ultimately landed him in trouble, was that he helped his client falsify mortgage applications to get loans that they probably didn’t qualify for. He also paid kickbacks to appraisers so they appraised his client’s homes for much more than they were worth so his clients could pull equity out their investment properties. He was also in bed with a local corrupt bank which went belly-up to conduct much of these transactions. The CEO/Co-Founder of the bank recently pleaded guilty to fraud and is also looking at 30 years in prison and a $1 million fine.
Another problem that caused Bob to get a lot of attention was that he didn’t take care of his customers. Once he got their money he pretty much dropped catering to them. He didn’t return phone calls, and things fell apart when transactions were not handled the way they should have been. When the real-estate market started going south, even more investors started complaining.
In following Bob’s case there are a few things I’ve realized:
- Follow the law. This is the obvious. There are no shortcuts and eventually things will catch up with you.
- Offer excellent customer service (crook or no-crook) because with the Internet people can easily ruin your reputation and get the authorities to notice you. Before the Internet had blogs and forums, it would have been difficult for all the investors to find each other to discuss their common problems.
- There is limited privacy with the Internet. I suspect Bob may have to change his name if he ever decides to look for a job in the future when he gets out of prison. Google his name and all sorts of articles with his picture appear. The Internet can be deadly!
- Nothing goes up in a straight line. Just like the Internet Bubble, the real-estate market and the economy, things eventually go down. If the real-estate market and economy was still hot, Bob would have still been in business. His clients may have complained about his poor customer service, but they may have been happy with the value of their property increasing.
- When it Rome DON’T do what the Romans do. Back when everyone was making money in real-estate, everyone looked the other way. The banks, Wall Street, mortgage brokers, real-estate lawyers, borrowers and appraisers all looked the other way. They knew most of these loans were bad but they were still processed only to get paid. We all know what happened after!
The SBA Offers Many Free Services for Businesses
If you are starting a business the U.S. Small Business Administration (SBA) can help you get a mentor, write a business plan, finance start-up, buy a business or franchise, lease equipment, protect your ideas, and a whole host of other services.
If you own a business the SBA can help you to make decisions, manage employees, market and sell, pay taxes, get insurance, forecast, finance growth, etc. The SBA can even help you to eventually sell your business, transfer ownership, liquidate assets, and file bankruptcy.
Some of the most requested items from the SBA are getting a business loan, business grant, business license, tax identification number, business certified as woman or minority owned, etc.
Many existing large companies started out with help from the SBA which include Stapes, Sun Microsystems, Apple, Jenny Craig, outback Steakhouse, Cray Research, Calloway Golf, Intel, Costco, Ben and Jerry’s, Nike, America Online and FedEx. (See video of the SBA Introduction above).
The SBA started in 1953 by the federal government as an independent agency help, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. The SBA helps Americans start, build and grow businesses via an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.
For more information visit SBA.gov.
Term Life vs. Whole Life Insurance
The main two types of life insurance are term life and whole life, however, there is also universal and variable which are variations of whole life insurance.
Term Life
The difference between term and whole life is that term insurance covers you only during the life of the policy while you pay the premiums. If you have a 30 year term life insurance policy, pay your premiums for 25 years but stop paying and then die, the policy will not pay.
There are three types of term life insurance:
Level Term allows you to pay a fixed premium up to 20 years. This is a good deal because your premium will not change if your health changes for the worst and it protects you against the effects of inflation.
Annual Renewable Term gives you the option of renewing your policy regularly, however, at increasing premium rates.
Decreasing Term steadily decreases your death benefit. This may make sense for people who have a family when they are younger and are the breadwinner. As they grow older into retirement with adult children and a nest egg, they don’t need a large death benefit.
Whole Life
Whole life insurance is designed to cover people for their entire life. Whole life charges a fixed premium each year and is typically higher than term life. The advantage sold by many insurance companies is that part of the premium resides in an account that pays interest and accumulates a cash value. The remainder of the premium covers term insurance. As the accumulation of cash grows in a whole policy the premiums can decrease and can eventually pays the premiums.
Unfortunately, whole life insurance tends to pay low interest rates to policyholders, while the insurance companies earn a much higher return because they invest the money in stocks and bonds. As an investment whole life insurance isn’t desirable to most.
Universal Life
Universal life is a form of whole life insurance that combines term insurance with a savings feature which is invested in a tax-differed account. In years when the insurer earns more on policyholders’ accumulation accounts than promised, they pass along the extra gain to policyholders. This may sound good, however, in some situations, customers can end up paying more than they expected because of overly optimistic assumptions insurance companies make about customers returns.
Variable Life
Variable life is also a form of whole life insurance that has a cash value that is invested in equity or debt securities. Policyholders can change and select different investment instruments. The insurance company guarantees a minimum death benefit amount, however, policyholders bears the risk of the securities investment.
Below is a chart comparing term, whole, universal and variable life insurance policies.
The 10 largest insurance companies are listed below:
American International Group
Berkshire Hathaway
UnitedHealth Group
WellPoint
MetLife
Allstate
Prudential Financial
St. Paul Travelers
Aetna
Hartford Financial Services
Relevant Post: Get quotes for life insurance policies
