The Blog

The Money Mentor: The Mythos of Money

This is Part 9 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

I was feeling pretty bad at this point, not just from the pain in my mouth but also from the realization that I was a fool who paid a lot more interest than I ever imagined—especially since I’d never given it a single thought, much less a second thought—and, worst of all, that I saw no way out of it. In fact, I wasn’t really sure what I owed. I knew roughly what my minimum payments on all of the cards totaled each month, but I had never thought to add up the principal. Or maybe I had thought of it but didn’t want to know.

“I’ll tell you something else about credit cards,” he went on, “People spend a lot more money using credit cards than using cash. It’s crazy, because after all, our money is worthless paper. If you take a Federal Reserve Note to be exchanged, they’ll give you another Federal Reserve Note—not gold and silver, the way they used to. So it’s our trust that gives the money value, our willingness to accept it. But we’re more reluctant to part with paper money than we are to run up a tab on a credit card. Maybe the fact you get the credit card back, but not the money, makes some difference. I don’t pretend to be a psychologist, but it’s another reason why using credit cards can be so risky. Not only are you going into debt, but you’re going into debt faster than if you didn’t use the credit cards. It makes me wonder what will happen when we’re all buying stuff on the Internet, using invisible digital money. I’ll bet people spend a lot more that way than they would if they had to hand over real money.”

I knew he was right, although I couldn’t explain why paying with paper money should seem more solemn and real than paying with a credit card. I was glad that the fifth credit card had something left to draw on its credit line, but suddenly I felt afraid about the future. Maybe I’d get a new credit card with a fresh line of credit, but somehow I didn’t think so. The last application I sent in had been turned down. Even if I could get another card, I was suddenly wondering where it would all end.

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

March 30, 2016 0 Comments

The Money Mentor: The Timeline of Compound Interest

This is Part 8 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

“Do you know how long it takes to pay back two thousand dollars on a credit card if you pay the minimum each month? Assume 19.6 percent interest, although some cards offer a little less than that.”

I’m not terrible at math. In fact, music is kind of mathematical and you need a feeling for music in order to be able to dance. But I couldn’t fathom what the minimum payment would be if you owed two thousand dollars. Just guessing, I thought maybe it would take two or three years to pay it all back.

Fortunately, I couldn’t say anything.

When I didn’t answer, he triumphantly supplied, “Twenty-two years. I bet you never imagined that.”

“Uh-uh,” I had to agree.

“How much in total would you have to pay back for the two thousand plus interest?”

Twenty-five hundred, maybe even three thousand, occurred to me, but I didn’t really know.

“Four thousand nine hundred and nineteen dollars,” he proudly answered himself. “That’s two thousand nine hundred and nineteen dollars in interest for a two-thousand-dollar loan. And it’s not usury, it’s perfectly legal. Rinse. Now how can you explain why people are willing to pay so much interest? Why do people pay 15–20 percent on credit cards when they can only get 3–4 percent interest on savings deposits and no one else pays as much interest—not for car loans, mortgages, business loans, or anything else that doesn’t involve a loan shark?”

I leaned forward to rinse out my mouth, then answered with the first word that came to mind and certainly seemed to apply in my case.

“Stupidity?”

“As P. T. Barnum said, ‘There’s a sucker born every minute.’ Open wide. In fact, many people who pay interest on their credit cards think they don’t. They deny the reality of what’s going on. Or maybe they plan to pay it off, so they hope that soon they won’t be paying more interest. Or they know they pay some interest, but don’t realize how high the rates are. After all, where in our educational system are the most basic aspects of personal finance taught? Nowhere, so rather than saying people are foolish, maybe we should say we have a foolish educational system. If we don’t teach about the problems, we certainly can’t teach about the solutions to those problems.”

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

March 16, 2016 0 Comments

The Money Mentor: A Math Quiz and Compound Interest

This is Part 7 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

“If you have one thousand dollars in a savings account that pays five percent interest, how much would you earn in a year?”

Fifty dollars seemed like the right answer to me, but I couldn’t pronounce it and simply opened my eyes wide as if to shrug.

“Give up? Well, it’s a trick question. Whatever you answer, I can say you’re wrong and prove it. Open wide. For example, what if you answer ‘fifty dollars’? Most people probably would. That would be the right answer if interest were paid once a year. On the other hand, if interest were paid quarterly, the interest for the year would be more than fifty dollars, and if interest were computed daily, you’d earn even more than if it were computed quarterly. It’s because you’re earning interest on interest. That’s what compound interest is all about.

“Wider please,” his thick finger pressed my lower lip painfully against an incisor. “So what does all this mean?”

I was wondering myself, because a few pennies one way or another didn’t seem to make much difference to me.

“Compound interest can work for you or against you. I’d say that, in your case, it’s working against you.”

I would have liked to interrupt him, because I have some selfesteem issues that didn’t appear on his radar screen, but of course, I had to keep as silent as if I had taken a vow.

“How does somebody max out a credit card anyway? On not just one credit card, but four?”

I would have liked to tell him. Maybe if he understood what had happened, he wouldn’t be so smug. It had to do with being offered a lot of credit cards in my junior and senior years in college and accepting all of them. After all, I didn’t have to have income or get a parent to guarantee that payment would be made. And I honestly believed that the credit card companies had big computers that know whether or not you can handle three, seven, or twelve credit cards. They probably had a pretty good idea how much I would be earning after college—a lot better idea than I had, since I had no idea at all—and if those big companies thought it would be enough to pay them back, on top of my college loans, then what could be wrong with accepting the cards?

“It’s really simple,” he went on. “Cards get maxed out because people believe that paying the monthly minimum is enough. That’s just what the credit card companies want them to believe. But if you pay the monthly minimum, you are paying a whole lot of interest. After the first month, you’re paying interest on interest. Open wide.”

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

March 2, 2016 0 Comments

The Money Mentor: Two Secrets

This is Part 6 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

“I’m going to surprise you,” he started by saying, “and tell you a little secret. I’ve never maxed out a credit card, not one card. In fact, I hardly use credit cards. Why should I? I’ve got good credit—people are happy to accept my checks.”

I couldn’t speak at all, so of course, I didn’t answer.

“I always say that my signature on a check is as good as the Secretary of Treasury’s signature on our currency. In the old days, when gold backed our money, that phrase ‘In God We Trust’ had a lot more meaning than it does today, but that’s another story.” He chuckled, adding, “You won’t be here long enough today to hear all about that.”

Thank God, I thought, because even though my jaw felt numb, I could feel the drill whirring deep down toward the bottom of my molar. I also didn’t know what in the world he was talking about, and he sounded pompous.

“Now I’m going to make an exception to the rule about not using credit cards,” he said. “The way they’ve set things up, you’ve pretty much got to use them to make rental car reservations, buy tickets over the phone, order products off the Internet, and so on. But when I do that,” here he raised his voice for emphasis, “I immediately pay my bill in full as soon as it arrives. I never carry a balance on any credit card. If I had a choice, in fact, I would use debit cards—those are cards that you can only use if you have money in the bank—but some of the carrental companies insist on credit cards. Now, you’re probably wondering what all this means in the big picture.” He stepped back, drill in raised hand, and waited with satisfaction for my reply.

“Ah-uh,” I answered, wanting him to be quiet but feeling that the sooner he worked his way through his monologue, the sooner he would finish his dentistry and let me leave.

“Open.” He stepped forward, adding, “Wider. I’m going to tell you another secret.”

For some reason, I didn’t want to know this secret.

“It will change your life. Once you know this secret, you have only yourself to blame if you don’t find the path to prosperity. You listening?”

I couldn’t close my ears. It simply isn’t fair when one person gets to talk all the time, even if they’re giving you directions to the Fountain of Youth and El Dorado. I like to talk, too.

Taking my silence as encouragement, he continued, “The ancient world had seven wonders, but the famed banker, Baron de Rothschild, couldn’t name any of them when someone asked him to. Instead, he said that he would reveal the eighth wonder—compound interest.”

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

February 17, 2016 0 Comments

Outdoor Writers Association of America

Post 13 in my Professional Authors Associations Series. Click here to read post 1.

Outdoor Writers Association of America: owaa.org

Learn more about this organization at owaa.org

Learn more about this organization at owaa.org

OWAA represents a diverse group of professional communicators dedicated to sharing the outdoor experience. Its mission is to improve the professional skills of its members, set high ethical and communications standards, encourage public enjoyment and conservation of natural resources, and be mentors for the next generation of professional outdoor writers. Members include writers, editors, book authors, broadcasters, film and video producers, photographers, artists, and lecturers. OWAA promotes responsible outdoor reporting by providing workshops and seminars, setting professional standards, a monthly publication, annual membership directory and other publications, and an annual conference. It provides online lists of various outdoor publishers’ needs and current job listings. The national office provides information, liaison services, and assistance with business problems. OWAA sets professional standards and business guidelines and offers health insurance coverage at competitive rates.

This information has been adapted from the 4th edition of The Writer’s Legal Guide by Kay Murray and myself.

 

February 10, 2016 0 Comments

The Money Mentor: The Dentist’s Diagnosis

This is Part 5 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

After studying the X rays on the light box on his wall, Dr. Testa told me the bad news about the gold inlay and the necessity of one more visit to his office. “And I also think that you should have your wisdom teeth out. You’re not using them, and they can cause you trouble in the future. It’s best to extract them when you’re young and healthy.”

I thought of the pain and the discomfort that would follow, living on soup and baby food for a week, and it just seemed like my miseries were multiplying much too fast. Anyway, who had asked him about my wisdom teeth? But the fear of future pain vanished when Dr. Testa began squirting a little liquid out of the long needle of the hypodermic that he intended to inject near the hinge in my jaw. I’ve always been afraid of needles, I don’t know why, and I even look away if a doctor has to draw blood for a test. I wanted to jump out of the chair and run, but I had a picture in my head of Dr. Testa pouncing quick as a cat to make sure I stayed put. His first few tries with the needle must have missed the right spot because he keep thrusting like a fencer until I was ready to beg him to stop.

“Open wide,” he said, and I complied.

Now he began his monologue. My childhood dentist, the one that my mom and dad used, had always liked to talk about politics. It didn’t matter what party you belonged to, whether you were a child or an adult, a man or a woman; as soon as you couldn’t reply, you got to hear his opinions from beginning to end. Dr. Testa seemed to be that way, only worse, because he was talking about me.

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

February 3, 2016 0 Comments

Novelists, Inc.

Post 12 in my Professional Authors Associations Series. Click here to read post 1.

Novelists, Inc.: ninc.com

Learn more about Novelists, Inc. at their website, ninc.com

Learn more about Novelists, Inc. at their website, ninc.com

Novelists, Inc. is a coalition of working writers dedicated to serving the needs of multi-published writers of popular fiction and to improving the status of career novelists. NINC helps its members connect and communicate with each other and to stay informed, with a focus on “the business of the business.” It provides a popular members-only e-mail loop that is considered a go-to resource for research and the latest industry information, a monthly newsletter, a well-attended annual conference, a legal fund and advocacy, and a discount on personalized Nielsen BookScan reports, among other benefits.

This information has been adapted from the 4th edition of The Writer’s Legal Guide by Kay Murray and myself.

 

January 27, 2016 0 Comments

The Money Mentor: Where the Pain Started

This is Part 4 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

Off I went to the dentist’s office in a pricey part of town. I have to say he looked stern when he first came into the waiting room and introduced himself.

“Hi, I’m Dr. Peter Testa.”

“Iris Cassidy,” I answered, rising and taking in this tall, skinny man with his bald dome of a head and round, gold-rimmed eyeglasses.

“So you’re Tina’s roommate?”

“That’s me.”

“And did you give my receptionist four credit cards that were maxed out?”

“But the fifth wasn’t,” I tried to keep a cheerful front. If I hadn’t had to pay in advance, the embarrassment of having lost track of my drawing on the credit lines of the cards could have been put off until after the treatment at least.

“You’ve set a record for this office,” he said, shaking his head. “Well, come on in.”

I followed him into the small room with all the dental equipment and settled myself in the chair, my head on the headrest and the light in my eyes.

“We’ll start by taking some X rays. That way I should be able to do something today to relieve your pain.”

At this point I was also feeling some additional pain because I felt devalued in his eyes. I took his remark about setting a record as a criticism. I wanted to explain about the cost of the broken arm, but I had also spent money on clothes, albums, dance outfits, and even some meals. I didn’t understand how the credit lines had been used up so quickly, but I suddenly felt very bad about it. Once Dr. Testa started working, he managed to make me feel worse and worse. It’s awful to endure the pain of dental work, but when a dentist delivers a monologue—and it’s about you, and you don’t agree but you can’t say anything because your mouth is stuffed with cotton, clamps, and tubes—well, I can think of a lot of places I’d rather be.

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

January 20, 2016 0 Comments

National Association of Science Writers

Post 11 in my Professional Authors Associations Series. Click here to read post 1.

National Association of Science Writers: www.nasw.org

Visit NASW's website at www.nasw.org

Visit NASW’s website at www.nasw.org

NASW was formed to “foster the dissemination of accurate information regarding science through all media normally devoted to informing the public.” Its mission is to fight for the free flow of science news. Members include freelancers and employees of most of the major newspapers, wire services, magazines, and broadcast outlets in the country. NASW offers an array of benefits to professional science writers and practitioners in related fields: a quarterly newsletter, reports on trends, issues and controversies, news of regional events, practical advice on freelancing, teaching, public affairs, and other professional specialties, annual workshops, a jobs mailing list, educational resources and mentoring programs, the annual Science in Society awards, free website hosting, insurance plans, and travel fellowships. Applicants for regular membership must be established science writers and have two sponsoring members. Student memberships are available.

This information has been adapted from the 4th edition of The Writer’s Legal Guide by Kay Murray and myself.

January 13, 2016 0 Comments

The Money Mentor: Where the Trouble Started

This is Part 3 of the series to serialize my book The Money Mentor: A Tale of Finding Financial Freedom. Click here to start reading from Part 1. Every other week will have another segment of the story of how a 23-year-old dancer struggles with and ultimately overcomes the burdens of her crushing financial debt. Look for posts on a variety of topics in the intervening weeks.

I think my downfall must have begun before the accident. It’s hard to be certain because I was vague about finances, numbers, budgets—actually, budget was not a word in my vocabulary. So when I put on inline skates for the first time and started downhill—without any instruction; I thought that with my dancer’s footwork and coordination I wouldn’t have any problems—I soon found myself speeding out of control. There was a moment of fear and an odd exhilaration when I knew that I had lost control and would crash, yet I was still flying on winged wheels down that slope. When it was over, I was sprawled out on the pavement and lucky to have nothing worse than a broken arm.

That was my first experience of being uninsured. When I added up the medical bills, I couldn’t believe the amount. I sat down and started to cry. I had accepted a bunch of credit cards in college so I could use their credit lines for just such an emergency. Unfortunately, I had used them for a lot of other things before the emergency happened, but I had enough left on the credit lines to pay the medical bills. Having a broken arm meant that I couldn’t waitress and I had to look for new work. I found a job as a receptionist at a small advertising agency. They had a health plan but no dental coverage, so of course the next misery in my life was an unbearable pain in one of my molars that eventually required an inlay.

I didn’t have a dentist in the city, so I asked Rachel and Tina, my roommates, and Tina gave me the name of her dentist. He was old, maybe over forty, and actually taught on the faculty of a dental school as well as having his own practice.

The Money Mentor: A Tale of Finding Financial Freedom

If you don’t want to wait two weeks for the next post in this series, you can purchase The Money Mentor on Amazon.

January 6, 2016 0 Comments