February 6th, 2012 (in the 1st segment of the 2nd hour) Dave read an article by CNNMoney.com about a bill by Congress that being reviewed that will ban welfare recipients from being able to use their welfare cards at strip clubs, liqueur stores, and on cruise ships.

The bill would force states to “develop policies” to keep this from happening

I’m a very skeptical person. How will this be enforced? We can develop and require all the policies we want but enforcing them is where money meets the madness.

What Dave ranted about

Elizabeth Lower-Basch, senior policy analyst at CLASP stated “…many low-income Americans live in areas where banks are scarce, making it hard for them to find an ATM, she said..” She is under the impression that the only ATMs are in one of those three locations.

As a bonus, he talked about a study that talks about cheating on taxes

An article from MSN Money shows almost twice as many people today compared to 2010 believe it is alright to cheat a little bit on their tax returns. Here is a link http://money.msn.com/tax-tips/post.aspx?post=4fd8cd80-7efa-424e-b80b-dac073e609c9

The company that got served!

Asset Acceptance, LLC settle charges that it used deceptive collection practices when it tried to collect DEBTS THAT WERE NOT OWED, even some that were known to be past the statute of limitations. Here is the article Dave read: http://www.reuters.com/article/2012/01/30/us-debt-assetacceptance-idUSTRE80T1DK20120130

The Federal Fair Debt Collection Practices Act

The FDCPA was put into place by the Federal Trade Commission in 1978. Essentially it was designed to protect consumers from what I would call “very bad manners” by collectors and their tactics to get debtors to make a payment. I’m all for that! The problem is it is very difficult to enforce, like trying to stomp on all the ants before they get away. The collectors break the rules, change their names, and open up down the block under a different name (sometimes in the same place under a new name). In this case, it worked.

How can you prove unfair treatment by a collector?

Here is a short list of things you can do to protect yourself and possibly prove you have been treated unfairly:

• Keep track of all calls with date, time, person you speak with, and the topics of conversation
• Let the calls go to voicemail
• Record the conversation with an audio recording device

There are a number of items on the market to record calls without having to wait for the answering machine to pick up. As long as you let the caller know you are recording the call (for training purposes, of course) then record the conversation. Have the caller note the date, time, and their name on the call before getting into the topic. This information can come in very handy in a court of law.

He’s got the money

Anton has $10,000 saved and wants to get a little piece of the pie when the stock goes on sale (probably the middle of 2012). Everyone is on Facebook so this should be a solid investment, right?

Investing in a single stock

Well, Dave tells us what most people wouldn’t. The problem with FBK (I’m just guessing at what the stock symbol will be, but it sounds good doesn’t it) is that everyone is expecting it to be a good stock, so the initial offering will be in high demand, which will make the price go up. The hype will cause the first few days/weeks/months to be volatile. Buying single stocks is like playing the roulette wheel. You’re betting everything on one horse and it is very risky.

I want to buy some FBK

Gosh, I’m even tempted to buy FBK. But I’ll stick to my MoneyPlan and get shares through mutual funds, just like the .0000000000000001% of Google I own.

The article talks about a law suit from the State of Arizona stating BOA is hindering an investigation by negotiating settlements with underwater homeowners who have agreed to take down negative comments from their Twitter and Facebook accounts.

If you’d like to read the article about a borrower who agreed to remove and delete Facebook and Twitter statements he had made about a dispute he had with BOA, go to: http://consumerist.com/2012/01/bank-of-america-accused-of-giving-loan-modifications-to-people-who-wont-complain-about-them-on-faceb.html

“Envy is a sin, and the politics of envy being pushed by both parties right now and by the news media relentlessly are teaching you to be envious are spreading sin.”

Click on the picture to read “It’s Official: Wealth Gap Has Turned America Into A Seething Class Of Resentment”

An article written by Cynthia Cryder, an assistant professor in my hometown of St. Louis, stated that it is undisputed that the best way to tackle debt is to pay down the loan or credit card with the highest interest rate first.

Dave disagreed

On 1/10/12 (half way through the 1st hour) Dave verbally disputes this claim so it isn’t undisputed. But you didn’t need a post from me to tell you that.

I have to disagree with Dave (What!?)

The study is correct and a majority of the statements made in the article are also correct. It can be proven mathematically that paying off a higher-interest balance loan will pay down a balance faster than tackling a low-interest rate account. Example: If you have a $1,000 credit card at 3%, a $4,000 student loan at 4%, and a $15,000 car loan at 10% then paying down the car would reduce the debt faster than making only minimum payments in order to tackle the credit card first.

But this isn’t about math

The problem with this article, and what the statements made by the researchers imply, is that paying down debt has little to do with interest rate. A dozen accounts with a 0% interest rate is still debt. The problem with debt reduction plans that tell you to pay off the higher interest rate first is that you don’t get the instant gratification that you got when you put the debt on the stupid credit card in the first place. Without the “quick win” you lose motivation and quit. Then you still have the debt and a hopeless attitude.

The way humans pay off debt

Math doesn’t pay off debt, humans do. The way to pay OFF debt is to get mad, work extra, spend less, and send everything you can to debt reduction. Reduce it so much that it goes away fast! Experiencing the results of paying off a debt quickly will keep you energized and psyched to keep going, regardless of interest rate!

Make all your accounts 0%

“I wish I had 0% interest rates” you say? You can. Pay off all your debts, smallest balance to largest for the quick wins and you won’t be paying interest. Put money into savings and investments that earn you interest instead!

Those who understand (compound) interest are destined to collect it. Those who don’t are doomed to pay it.

“I was at the gym today and overheard 2 women talking about Christmas. One woman
proudly told her friend that she bought her daughter a cat for Christmas. The best part was when she said “I put it on a payment plan, it’s only $19.95 a month.”

This prompted Dave to ask listeners to jump in with the “Dumbest thing you ever
financed.” Instantly, Twitter followers sent in their responses.

Some of the best responses (including one I submitted)

• Cigarettes. I used to buy them on a credit card
• A tax bill
• RCI timeshare
• Lotto tickets
• A waterbed mattress in 1987
• I got a loan to finance my stock market trading idea
• Bar tabs. Still paying them years later
• My lasik eye surgery. I kept wondering how they would repo them if I didn’t pay
• A 1984 Macintosh computer with all the extras. Over $3,000
• A cash advance to a Nigeria Prince who really needed my help
• We financed a fitness machine in January 2003. It was a great clothes hanger
• My ex-wife and I once financed $1,000 worth of Mary Kay cosmetics for the garage
• I used a student loan to buy a new hunting rifle. Is there something wrong with that?

What was the dumbest thing you ever financed?

We’ve all done stupid things with money. It’s hard to spend every penny just right, but making a bad financial decision it isn’t the end of your chances for a taking vacations or saving for retirement. However, continuing to make poor financial decisions will.

Want to do better with your money? This blog brought to you by Steve Stewart, the only Dave Ramsey Trained Coach and Certified FPU Trainer who has been featured in a segment on the Dave Ramsey Show. Let me help you be the person you need to be: A strong provider for your family and a wise spender with the ability to give like no one else.

Dave’s thoughts on buying cars

1. Don’t buy a brand new car unless you can pay cash for it (no loans, no leases)
2. You have a net worth of more than $1,000,000
3. The total value of your cars is no more than half your annual income

Name your Hooptie

He asked listeners who bought hoopties to email or Tweet the nicknames they gave their cars. Here is a list of a couple:

• The “and am” because it was missing the “Gr” in the front
• “Betsy”, a 92 Honda Accord the listener’s wife called “The Other Woman”
• The “Silver Streak”, a primer-gray Volvo
• “Doris the Taurus”
• “The Gold Goober”
• “The Flying Blue Monkey”
• “Patches”
• “The Sweater”, a little MR2 for a driver who was 6’2″
• Dave’s daughter Denise’s car’s name? “Waldo” because she would constantly forget where she parked it and say “Where’s Waldo”

What happened next

What happened in the next segment was awesome. A couple who makes more than $300,000 a year, $500,000 in the banks, and two cars (one with a car payment) wanted Dave’s opinion on buying a new $160,000 Lamborghini. What do you think Dave’s answer was considering they have the money and a great income?

Birthday wishes

Today is my birthday. I continue to get birthday wishes from friends on Facebook along with notes like “have a happy, productive and profitable year!” (thanks Michael TechTalk Kastler) or “Eat lots of cake” (thanks Tim Spinnin’ Schoomer).

Among the well-wishers was a note from an old friend I used to work with. What did he suggest I do on my birthday? “Have a fiscally responsible birthday today. And some fun.”

Can you be fiscally responsible AND have fun

Can you do both? Can you really have fun AND be fiscally responsible? You know my answer – NO PROBLEM! It’s all in the MoneyPlan. There are actually three birthdays in our household this month, which is really tough after Christmas. But these aren’t surprises: Christmas comes every December (around the 25th I think) and our birthdays are always ushered in after the unused campaign goes stale from New Year’s Eve. It’s predictable, just like your money!

What I bought myself for my birthday

So today I’m going to do something fiscally responsible AND fun for myself. It isn’t a smart money-move and will only cause me to spend more time on my “hobby”. And I can do so without feeling like I’m spending money we don’t have or are wasting money because the money I am spending was already in the budget.

Today I own the domain “DaveRamseyFan.com”. It used to be a free site hosted by WordPress (DaveRamseyFan.wordpress.com) but today it is mine!

What this means for me and you

Most of my time has been spent posting blogs updates and podcasts at MoneyPlanSOS.com, but I will have to start posting more info, events, and Dave Ramsey rants to make this selfish, extravagant purchase worthwhile.

I hope you like it and will be looking forward to hearing your comments. God bless you all!

Dave read an article from Consumerist.com, an online magazine website, with the title “Study: Rick People Are Unfeeling Robots Devoid Of Compassion” (aired in the 1st hour on 1/2/12). The study was conducted on 300 college students from various income levels by psychologist Jennifer Stellar.

Dave was, shall we say, less forgiving to the survey methodology behind the study. Let us mimic the article by making a couple of assumptions about the 300 subjects used in this study:

What college students know about being rich

I am making the assumption that they do know something about being rich considering they have access to food, shelter, and clean water that is far more superior than a majority of the world’s population.

What college students know about Unfeeling Robots

Again, I am making the assumption that they know something about this variable since quite a few of them talk to Siri, the intelligent software assistant that comes pre-installed on the new iPhone, and are attending a University.

What the study proved

This study of College students who are relatively rich and know something about unfeeling robots that were asked questions about empathy proved this to me: You have to look at everything you read or watch with a critical eye. This study was not presented with an objective eye, it was targeted to get you to read it. There was no mention of robots or androids or even cyborgs in the original article that was released on Time.com, so this was a headline designed to get our eyeballs.

The motivation for printing this article was to get clicks and grow readership. Dave reading this on-air just gave them a boost in web-traffic, so Consumerism.com got what they wanted: our eyeballs.