During these hard times there are things that are happening around us that are like clue's as to exactly how much people are hurting in todays economy.
From 1994 to 2002 myself and my family lived on a 20+ acre farm. We were in the Arabian horse showing/breeding/sales business. Actually this was my wifes business I continued running our publishing business.
Well the town that we lived in was Lyons Wisconsin. Population at that time was about 2,500 people. But I think that was an over estimate. There was only 1 gas station, 1 corner store, 1 post office with just 1 employee, 1 school, 1 car repair shop and 1 bank.
There was only 1 minority family and that was mine. Everyone was very friendly and courteous. We all knew each other.
I was reading my newspaper the other day and I noticed that there was a bank robbery in the county of Walworth. That wasn't a big deal because the county is pretty large, then I read more and I was surprised that the bank was Lyons bank.
If I can draw this picture for you on how improbable this robbery would be from an outsider of the community. This bank is not a huge bank, you wouldn't know it was a bank unless someone told you it was a bank. Unless they've upgraded since 2002.
Everyone knows everyone in that town. And a big problem is that there are only 2 streets in the entire town and eventhough there are several small subdivisions there is still only 4 ways in and out of the town.
This is what Malcolm Gladwell coined as a Tipping Point! In his book he stated that all people can be pushed to do BAD things if giving a certain combination of circumstances.
I don't have details about the bank robber, but I would bet that they were experiencing financial problems and that they were from that neighborhood.
Thursday, November 20, 2008
Monday, November 17, 2008
Car Dealers Ripping Off Customers
Over 700 New car dealers have closed their doors nationwide. But some of them are taking advantage of their customers while they were making plans to close their doors.
These is called "Shuffling Money". This is how the scam works and surprisingly they rarely get in trouble for doing it.
Let say that you want to buy a new or used car. So you visit your local car dealer and you offer to trade your car to get another car. You owe $10,000 on your car. So you'll need them to pay your old loan off so you can get the new car.
By law after you sign the contract and take delivery of the new car the dealer has 7 days to pay off the other car you traded in.
They must also notify your previous lender that they have taken posession of the vehicle, thus releasing you from insurance claims.
That's in a perfect world!
This is whats happening now. Some dealers are having a hard time due to the current economic conditions. So they are actually getting the money from the lender that financed your new car and not immediately paying off your traded in vehicle.
Some dealers are even taking it further and selling your traded in vehicle and getting the money for that vehicle. Which is a violation of the law, because they sold your trade in without a clear title.
I've learned from several dealers that they did this during good times, but they could always make new sales to catch up and pay off the traded in vehicles.
The disturbing reality is that an individual could be held liable for both vehicles eventhough the dealer committed a crime.
From my research the dealers that have gotten away with this usually bought the trade in vehicle with one contract and sold the new vehicle on another contract. This ensures that the new lender is protected because there were no other vehicle committments tied to their contract.
HOW CAN YOU TELL IF THIS IS BEING DONE TO YOU:
1) If you call your previous lender and they say the car hasn't been paid off.
2) If you call the dealer and they keep giving you excuses about the check is in the mail.
3) If you are owed a 2nd set of keys or floor mats. (this is a tell tell sign that the dealer hasn't paid the auction dealer for the vehicle yet.)
4) If you haven't received a title for your new car yet. (My investigation has found that some dealers can lie to get a new title usually if the vehicle was titled in another state before sold at auction.)
WHAT CAN YOU DO ABOUT THIS BEFORE IT'S TOO LATE:
1) Always make sure your trade in is listed in the contract for purchasing your new car.
2) Check back with your previous lender to make sure they have been notified and that they balance is paid.
3) If you are getting the run around stop in at the dealer and make them write a letter explaining what has happened and ask them exactly when they will send the payoff check. Request that they send it next day confirmation delivery US Mail and that they make a copy of the check/cashiers check and fax or provide you a copy to pick up before they send it off. (this will establish a written paper trail if you have to go to court)
4) If they will not do #3 IMMEDIATELY contact your state automobile dealer inspector. Check your phone book or online.
You must also immediately contact the new lender of your new vehicle and inform them that you will be voiding the contract because it was never finished due to the dealers violations. NOTE: if your trade in isn't on your original contract you may run into some problems.
Immediately ask the dealer to give your trade in vehicle back. If your trade in wasn't listed in your original contract, hopefully they sold your vehicle to another person which would stack on violations of the law. Moving the bar more in your favor.
Way are the dealers not going to jail for this? Because they are incorporated business plain and simple.
Take a look at this video:
http://www.wftv.com/action9/17980827/detail.html
If you find yourself in this situation please contact me.
These is called "Shuffling Money". This is how the scam works and surprisingly they rarely get in trouble for doing it.
Let say that you want to buy a new or used car. So you visit your local car dealer and you offer to trade your car to get another car. You owe $10,000 on your car. So you'll need them to pay your old loan off so you can get the new car.
By law after you sign the contract and take delivery of the new car the dealer has 7 days to pay off the other car you traded in.
They must also notify your previous lender that they have taken posession of the vehicle, thus releasing you from insurance claims.
That's in a perfect world!
This is whats happening now. Some dealers are having a hard time due to the current economic conditions. So they are actually getting the money from the lender that financed your new car and not immediately paying off your traded in vehicle.
Some dealers are even taking it further and selling your traded in vehicle and getting the money for that vehicle. Which is a violation of the law, because they sold your trade in without a clear title.
I've learned from several dealers that they did this during good times, but they could always make new sales to catch up and pay off the traded in vehicles.
The disturbing reality is that an individual could be held liable for both vehicles eventhough the dealer committed a crime.
From my research the dealers that have gotten away with this usually bought the trade in vehicle with one contract and sold the new vehicle on another contract. This ensures that the new lender is protected because there were no other vehicle committments tied to their contract.
HOW CAN YOU TELL IF THIS IS BEING DONE TO YOU:
1) If you call your previous lender and they say the car hasn't been paid off.
2) If you call the dealer and they keep giving you excuses about the check is in the mail.
3) If you are owed a 2nd set of keys or floor mats. (this is a tell tell sign that the dealer hasn't paid the auction dealer for the vehicle yet.)
4) If you haven't received a title for your new car yet. (My investigation has found that some dealers can lie to get a new title usually if the vehicle was titled in another state before sold at auction.)
WHAT CAN YOU DO ABOUT THIS BEFORE IT'S TOO LATE:
1) Always make sure your trade in is listed in the contract for purchasing your new car.
2) Check back with your previous lender to make sure they have been notified and that they balance is paid.
3) If you are getting the run around stop in at the dealer and make them write a letter explaining what has happened and ask them exactly when they will send the payoff check. Request that they send it next day confirmation delivery US Mail and that they make a copy of the check/cashiers check and fax or provide you a copy to pick up before they send it off. (this will establish a written paper trail if you have to go to court)
4) If they will not do #3 IMMEDIATELY contact your state automobile dealer inspector. Check your phone book or online.
You must also immediately contact the new lender of your new vehicle and inform them that you will be voiding the contract because it was never finished due to the dealers violations. NOTE: if your trade in isn't on your original contract you may run into some problems.
Immediately ask the dealer to give your trade in vehicle back. If your trade in wasn't listed in your original contract, hopefully they sold your vehicle to another person which would stack on violations of the law. Moving the bar more in your favor.
Way are the dealers not going to jail for this? Because they are incorporated business plain and simple.
Take a look at this video:
http://www.wftv.com/action9/17980827/detail.html
If you find yourself in this situation please contact me.
Tuesday, November 11, 2008
Update 11-11-08
In the news...
Starbucks profits down 95%
McDonalds profits up 75%
Circuit City files for bankruptcy.
These are misrepresentations for how bad business really is.
Starbucks coffee is not that great. Almost everyone that I know that went to Starbucks wasn't for the coffee it was for the experience. I've always said that when people either find another place to meet up and sit down that has internet access. Starbucks would be finished.
They are a niche store with a bad product. Great service and great atmosphere, but that won't carry you in hard times because its a luxury.
McDonalds is taking their customers because they are offering the same product at cheaper prices and it taste better.
But McDonalds is a lawsuit waiting to happen. My major complaint with McDonalds is that their coffee is TOO HOOOOTTTTTTT!!!!!!!!
A friend of mine owns a McDonalds and he tells me that the temperature is predetermined by corporate. I told him that I purchase coffee from McDonalds and it was still hot one hour later.
Circuit City was just another electronics company without a niche. They would setup next to or near Best Buy stores hoping that they would get carryover from people price shopping at Best Buy.
Good concept, but they didn't count on Best Buy working on it Brand/Shopping Experience. Best Buy has paid close attention to the entire experience from the parking lot to your first step into their store.
Their experience is so tremendous to most that their conversion rate is very high. Most people will not shop around unless its a very high price item.
The market isn't as bad as they would like us to believe. Every business that I've been exposed to that is in trouble had a flawed business from the start.
BONUS!
I've decided to add this section because of the theory that a job is security!
I've been a small business owner since the age of 21. I just turned 40 this past August. I haven't worked for anyone else but myself since then.
Over the years I've dabbled in some network marketing companies. Some failed and one was a major success, but they ended up filing bankruptcy in 2003.
The reaccuring theme that most people would say to my wife and I when we would recruit people was that they needed a job for security. We would try to tell them that no job was secure and that the only way to ensure job security is to own your own job.
We would tell them that when you work for someone else your future is in their hands and if they needed to save money or make job cuts your job was on the chopping block.
Now that we are seeing layoffs and job cuts I really don't hear people expressing that a job was security. They just blame the economy.
This simply comes down to MINDSET! Regardless of what situation people find themselves in they can't clearly see that it isn't the economy, it isn't the job, it isn't how much money you have, its the MINDSET of the individual (you!).
I would like to recommend a website for anyone looking to get the right MINDSET for success.
http://www.incometoday.net
Starbucks profits down 95%
McDonalds profits up 75%
Circuit City files for bankruptcy.
These are misrepresentations for how bad business really is.
Starbucks coffee is not that great. Almost everyone that I know that went to Starbucks wasn't for the coffee it was for the experience. I've always said that when people either find another place to meet up and sit down that has internet access. Starbucks would be finished.
They are a niche store with a bad product. Great service and great atmosphere, but that won't carry you in hard times because its a luxury.
McDonalds is taking their customers because they are offering the same product at cheaper prices and it taste better.
But McDonalds is a lawsuit waiting to happen. My major complaint with McDonalds is that their coffee is TOO HOOOOTTTTTTT!!!!!!!!
A friend of mine owns a McDonalds and he tells me that the temperature is predetermined by corporate. I told him that I purchase coffee from McDonalds and it was still hot one hour later.
Circuit City was just another electronics company without a niche. They would setup next to or near Best Buy stores hoping that they would get carryover from people price shopping at Best Buy.
Good concept, but they didn't count on Best Buy working on it Brand/Shopping Experience. Best Buy has paid close attention to the entire experience from the parking lot to your first step into their store.
Their experience is so tremendous to most that their conversion rate is very high. Most people will not shop around unless its a very high price item.
The market isn't as bad as they would like us to believe. Every business that I've been exposed to that is in trouble had a flawed business from the start.
BONUS!
I've decided to add this section because of the theory that a job is security!
I've been a small business owner since the age of 21. I just turned 40 this past August. I haven't worked for anyone else but myself since then.
Over the years I've dabbled in some network marketing companies. Some failed and one was a major success, but they ended up filing bankruptcy in 2003.
The reaccuring theme that most people would say to my wife and I when we would recruit people was that they needed a job for security. We would try to tell them that no job was secure and that the only way to ensure job security is to own your own job.
We would tell them that when you work for someone else your future is in their hands and if they needed to save money or make job cuts your job was on the chopping block.
Now that we are seeing layoffs and job cuts I really don't hear people expressing that a job was security. They just blame the economy.
This simply comes down to MINDSET! Regardless of what situation people find themselves in they can't clearly see that it isn't the economy, it isn't the job, it isn't how much money you have, its the MINDSET of the individual (you!).
I would like to recommend a website for anyone looking to get the right MINDSET for success.
http://www.incometoday.net
Wednesday, November 05, 2008
Congratulations President Elect Barack Obama
America has shown that its the greatest country on the planet. The first person of African American desent has been elected to the highest office on the planet.
Tuesday, November 04, 2008
News Updates:
In my area a Frozen Custard shop closed up last month. They were heavy in debt about $300,000 and they ended up closing their doors.
There was another example of what I explained in my previous blog posting. They took advantage of the banking situation.
More closures and layoffs...Curcuit City closing 155 stores and laying off 7,000+ workers
WR&R Greenbay Wisconsin furniture store closes all locations after just opening them months ago.
Over 600 New and Used Car Dealers nationwide have decided to close their doors.
Mastercard losses $193.6 million dollars this quarter.
Years ago when I started working with mortgage brokers that advertised in my publication I started asking questions about the principal.
With all of the refinancing who pays the principal of the loans. Now let's examine this for a moment. When a bank makes a loan they front load the interest so they will make money immediately for lending money.
Now here's the tricky part of the equation. If you refinance the loan with new money does it actually pay off the old money or does it just add more money to the original principal amount?
Where does this new money come from?
If the bank get the new money to pay off the old money and they make their interest from the original loan they should be happy right?
To get a clear answer we need to go back about 100 years. Banks didn't make much money when they made loans. But they did make a lot of money after they let long term loans mature. Think about it they would make a home loan and wait at least 20 years before they could actually on paper make money.
So they had to figure out a way to record profits earlier and they did it two ways.
1. They went of a fee binge. overdraft, overnight overdraft fee, over, overnight overdraft fee, tyme machine fees, check cashing fees. And my favorite the counting cash fee. They charge me $2.50 to $3 to count my cash when I make large deposits.
2. They went on a lending binge. They kept extending credit. This was actually the death of most banks. They have so much money loaned out they can't make their own interest payments for the money they borrowed.
That's why I say the principal is never paid. Todays market has made that possible and that's why if you can become semi or totally debt free you will actually be able to save more money and have more money.
There was another example of what I explained in my previous blog posting. They took advantage of the banking situation.
More closures and layoffs...Curcuit City closing 155 stores and laying off 7,000+ workers
WR&R Greenbay Wisconsin furniture store closes all locations after just opening them months ago.
Over 600 New and Used Car Dealers nationwide have decided to close their doors.
Mastercard losses $193.6 million dollars this quarter.
Years ago when I started working with mortgage brokers that advertised in my publication I started asking questions about the principal.
With all of the refinancing who pays the principal of the loans. Now let's examine this for a moment. When a bank makes a loan they front load the interest so they will make money immediately for lending money.
Now here's the tricky part of the equation. If you refinance the loan with new money does it actually pay off the old money or does it just add more money to the original principal amount?
Where does this new money come from?
If the bank get the new money to pay off the old money and they make their interest from the original loan they should be happy right?
To get a clear answer we need to go back about 100 years. Banks didn't make much money when they made loans. But they did make a lot of money after they let long term loans mature. Think about it they would make a home loan and wait at least 20 years before they could actually on paper make money.
So they had to figure out a way to record profits earlier and they did it two ways.
1. They went of a fee binge. overdraft, overnight overdraft fee, over, overnight overdraft fee, tyme machine fees, check cashing fees. And my favorite the counting cash fee. They charge me $2.50 to $3 to count my cash when I make large deposits.
2. They went on a lending binge. They kept extending credit. This was actually the death of most banks. They have so much money loaned out they can't make their own interest payments for the money they borrowed.
That's why I say the principal is never paid. Todays market has made that possible and that's why if you can become semi or totally debt free you will actually be able to save more money and have more money.
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