Fraud Alerts, Hacks, and Insider Trading

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You’d have to be under a rock to not have heard of the Equifax hack that exposed the personal information of millions of customers (143 millions to be exact) that amount to essentially 1/2 of the entire U.S. population. It’s alarming and frustrating because the nature of their organization does not allow us to opt out of their business model. If a hack of that magnitude occurred at my financial institution, I would simply take my business elsewhere. But, the way our credit system works, we do not get a say as consumers. If you have a pulse and you have any credit history, at least one, if not all three credit bureaus, will have a lot of personal information about you.

If you ever looked at your credit report, you’ll see that almost everything except your medical history is included (past and current addresses, employers, account balances, payment history, phone numbers, etc.) If you think that’s alarming, I’ve got news for you that should make it worse: honestly, there is nothing you can do about those organizations having your information other than living off the grid like those crazy cult people (who may be on to something) who shun the use of credit, social security numbers, and civilization altogether.

While you can’t keep the information from getting out, you can prevent someone from using it for nefarious purposes. After thinking it over, I decided that the 7 year credit freeze was overkill and instead opted for a 90-day fraud alert. The fraud alert allows me to block any attempt at applying for credit without the potential lender first calling me on the phone to verify that I am indeed the one applying. It is free, fast and convenient to do, and best of all, you only have to contact one of the three agencies as they are required to notify the other three. The alert lasts 90 days and you can keep renewing it every 3 months. You can do it over the phone or on any of the three reporting bureaus’ website (phone numbers and links below).

See below for their contact information and good luck! If you’re concerned about your information being in the hands of criminals, just think of it that way, at least you have it better than the three Equifax executives who will probably end up in jail for insider trading. I hear prison food is terrible.

TransUnion
1-800-680-7289

Experian
1-888-397-3742

Equifax
1-888-766-0008

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Not Saving Could Cost You Your Life

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I am glued to my screen, just like every other American, watching in horror as disaster after disaster ravage the Caribbean and southern states. As I see the images unfold, I watch with sadness but also with frustration as news networks routinely interview people who refuse to refuse to evacuate.

While I understand that some are not leaving because of pride and in part because they may believe that the media is overplaying the seriousness of the storm, I’m also starting to realize that some people are not leaving because they simply cannot afford to. They don’t have the extra funds to cover hotels, gas, and food on the road. While that is not an adequate excuse given that shelters are free, it doesn’t change the fact that shelters do have capacity limits and there will always be a significant number of people who have to pay for a hotel out of pocket.

Despite the glamour of South Beach, the city of Miami which is projected to be one of the most affected parts of the state has its underclass. With Florida having a sizable senior population on fixed income, the fact that it is a red state where wages are lower and the fact that there is a large immigrant population all mean that many of those in the affected areas do not have a lot of disposable income. That usually means that people are not saving like they should be. I am certain I have said this in the past, but if I have not, let me say it now: in a capitalist society, a lack of resources can be dangerous if not downright fatal. Even when hotels are $50/night, that seemingly bargain basement price can seem like an insurmountable sum for someone who is in the red every month.

This storm was announced 2 weeks ago and some people still couldn’t make it happen. The very nature of an emergency is that it is unexpected. We can’t possibly know when every tragedy is going to happen. The best we can do is to be prepared to minimize its impact. Stay out of debt, save and have a plan that fits with the risks of your specific region. Government resources are limited and we cannot anticipate that we will always get help in a timely fashion or that assistance will come at all. Stay ready so you don’t have to get ready. Let this be your wake up call.

My thoughts and prayers are with everyone affected by our recent natural disasters, including the recent earthquake in Mexico. If you are in a position to donate, do so at your local level so most of your funds can actually do some good rather than getting eaten up by large overhead at giant corporations. If you can’t afford to donate, volunteer your time. If you’re too far, please remember people always get hurt in these tragedies and you can give blood no matter where you are in the country.

You’re on Notice

 

long-term-unemployed

It wasn’t too long ago that I talked about the importance of never getting comfortable with your level or source(s) of income. I’m a big promoter of always seeking different income streams as well as seeing how you can get raises. Your ultimate goal should be to be in control of an amount of income that covers your cost of living. That’s true financial independence. That way, if you continue to work, you are working because you want to and you can stop at any time. Most importantly, if you’re involuntarily out of work, you’re not likely to be homeless in 3 months.

I also talked about my experience using a Bank of America ATM with a remote teller (Teller Asssist), and the potential threat they pose to many retail banking jobs.

Here it is: CNN is reporting that within the next 10 years, 30% of bank jobs could be obsolete. Very alarming.

These are routine repetitive jobs that we could anticipate being replaced. They are customer service jobs that provide an experience as well as a service. Well, I used one of these machines, and I got the experience. The woman on the screen was sufficiently pleasant and helpful for me to not care that we were interacting on camera rather than in person.

Technology has done it: using machines to provide services that could only be delivered in person. If you have a lower skilled job, this should be your wake up call. Save, invest and set yourself free from the bondage of debt. Otherwise, you might find yourself with a negative net worth an no income.

Why I don’t trust people with bad hair cuts

I try not to get political. In part because people tend to be too entirely consumed by politics while most of the things that happen in Washington have little to no effect on them. Outside of tax laws, very few of us are impacted by federal politics daily, yet, man of us allow it to dominate our conversations, determine how we treat others, and influence our relationship with those with opposing views. I know enough to make an informed decision at the polls, but I am not naive enough to take my eyes of my local municipal and state officials (whose policies impact every moment of my life) to worry about D.C.

With that said, on the global stage, the short, little rolly-polly crazy pillisbury dough boy looking man in North Korea needs a straight jacket. CNN just reported that his daring missile tests, despite their continuous failures, keep getting more serious and traveling further.

That’s why I don’t trust people with bad hair cuts. Sane people simply don’t show their face in public looking like that.

kim-jong-un

Should You Pay Your Children’s Higher Education?

higher-education

I had this discussion with a co-worker a few months back when he said that he was at odds with his wife over their daughter’s tuition bill. She did not think it was a good idea for them to co-sign a loan for her. I wasn’t sure if he was asking for my opinion or just venting, but I wouldn’t be me if I didn’t put in my 2 cents. So it became of matter of to pay or not to pay.

I came up with a little test to help you figure out which way you should go. It’s as simple as answering YES or NO to the following questions:

Are you debt free? – Credit card debt, your own student loans, car note, etc.

Is your primary home paid off?  – No other bills besides taxes, utilities, association dues, etc.

Are your retirement accounts maxed out? – The IRS released the 2016 401K contribution limits here.

Do you have enough in an emergency fund? – Minimum 3 months of living expenses.

Are you adequately insured? – Health, life, personal property, car and homeowners.

If you answered YES to all of these questions, you can afford to take whatever money you have left, after meeting all your obligations and putting food on the table, to pay for your child’s high education. If you have enough to pay the entire bill, more power to you. If you’re just contributing to part of it, well your kid should be grateful nonetheless.

If you answered NO to any of these questions, you CANNOT afford to pay for your child’s school and he or she needs to figure it out. Why? Because your creditors are not going to care that it ain’t cheap for Junior to go to Stanford. They’re going to want their money and they will make your life miserable, as well as ruin your credit to collect their funds. Because it would suck for Junior to come home for thanksgiving break and find you homeless after a foreclosure. Because the older you get, the less time you have to work and save for retirement and NOW is always the right time. Because an emergency could set you back financially for years to come. Because not having appropriate insurance can put you or your survivors under extreme financial strain.

But this guy asked about student loans, not tuition. The answer is no. Don’t do it. Let me make this clear: NEVER CO-SIGN A LOAN FOR YOUR CHILD’S TUITION. If they die, you are stuck with the payments. If they default, you are stuck with the payment. If they drop out of school and default, you are stuck with the payment for a degree they didn’t even get.

I graduated college at 21 and started working 2 weeks later. I later got an MBA while continuing to work. So I have worked uninterrupted ever since undergrad, and I plan on retiring at 65, sooner if I do well on my investments. That’s 44 years of potential for full time work where I can earn enough money to pay my own bills. My parents are in their 60s and my dad is thinking about retiring within the next 2 years. Do you think it would have been fair for him to be looking down the barrel of 10 years of loan payments? Who can afford it the most? My father or myself? Even if I lose my job, I probably won’t be out of work for 30 years. My parents will be if they live 30 more years (which is not too far fetched because my grandma is 90 and my grandfather died at 94).

They have the rest of their lives to work and pay back their school loans. You have maybe another 15-20 max left of working and saving for retirement. How much blood pressure medication co-pays do you think your social security checks will cover after you’re done paying for your child’s student loans?

If you don’t believe me, maybe you’ll believe someone who already made the wrong choice on that one.