Category Archives: blogs

Freedom of speech and religion in the US.

I often post long comments on a variety of subjects on other blogs.  Today one of my good friends Matthew posted a very good blog entry.  (See the photo to the right, taken on one of the few days when I had more hair them him.)  Here is his blog entry, if you could read that first it will make mine more logical. I mostly agreed with him and the subject of business came up in my answer so I will repost my reply here for all my business readers.

I once heard a quote that one who believes in freedom of speech “Will defend someone who is yelling at the top of their lungs their ideals in a public place, ideals which you would yell at the top of your lungs to oppose.”  I have thought about this often.  We live in a nation where we should have freedom of speech, and even if that speech is against what I say and think I will support that freedom.

Now it comes to appropriateness of the time and place it is a whole different mater.  I think that there is a huge difference between public and private events.  I thought it was shameful for those few democratic protestors to sneak into the republic convention and protest during the peaks of the speeches.  It was NOT their place.  I also think that if someone goes through all the trouble and expense to put on a parade (Such as a famous church does each St Patricks day.) they own that parade and they should be able to pick and choose who is allowed to be in their parade, not forced to allow a group of Homosexual rights people to basically have a protest in the middle of the parade as a court recently forced them to do.  If the Gays want to have their own parade, I have no problem with that, they can pick a different time or place.   Also if a pastor wants to say something to his church about who to vote for, he should be allowed, unlike todays laws.

On Friday I went to the state fair, there were two different church groups who rented a space there, they decided that they would try to tell people about God.  I also have no problem with this, they used their money, and they were following the rules.  Now was this the best place, I think not, will they actually do any good for the Kingdom of God, maybe they will make a few people think.  For years I have thought that relationships were the best way to win people to Christ.  You simply invite them to events, show them the community and tell them the Gospel and let them decide.  But any decision that is forced is NOT lasting or sincere, and so many Christians like to force such decisions.

If you notice in the quote you have from Thomas Jefferson he says sect.  As you know this is a difference within the same religion.  He could not imagine that our nation would be anything but Christian.  He just did not want one denomination to be favored over another.

I do totally agree that we should not force our Christian ideals on non Christians as a form of law.  There are too many laws in our nation.  We are NOT a free nation.  Anyone who leaves for a year or more and comes back will tell you that.  There are others that are less free but also others that are far more free.

You also had the point of the “Merry Christmas” greeting.  I have found that it is used far less.  The other day I went to Costco they had two isles of “Christmas” stuff, so I decided to look really closely, there was not one item that was Christian based, and not one location did it say the word Christmas.  They are a business, they can choose what to put on their shelves, but me, as a Christian can choose where I will buy my decorations, and even if they have the best price it will NOT be from them.  Two years ago I heard that Macy’s decided to make bring back Christmas and in all of their ads they stopped all of the holiday stuff that others do and actually, to the shock of the left, mentioned Christmas.  And you know what, their sales went way up and they had their best season ever.  These are all private originations, they can choose what they want to say, they will be held accountable by the general public for what they do and say though.

To me the fundamental thing is that we have LOST the conversation in this nation.  People are divided and in most ways very close minded.  The force of the debate on both sides has caused people to become callous to the point that they are stuck in what they think.  A hard attack will just cause people to put the shields up and resist, only a slow, over time conversation based on logic will ever convert most people in this climate.  (This is for every issue, religious, political and even for choice of OS.)

The Mortgage Crisis in Plain English

Hello, my name is Jason Dragon.  You may be a long time reader of my blog, or like many people you may have found this simply by doing a search, if that is the case then welcome.  I plan for this blog entry to be one of the largest in scope of any entry that I have every done.  We are going to talk about the current Mortgage Crisis.  I will talk about it in 4 areas.

  1. The Boom
  2. The Bust
  3. The Current Situation
  4. The Way Forward

If you are wondering, I do have a degree in Business and I spent a lot of time studying economics. For a short time I even sold mortgages.  I will try to keep the text as simple as I can, I want you to not get bored and to read the entire things. Some of this will be my educated opinion, but most is simply fact.

The Boom

At the start of 2000 there was a bust in the stock market, millions of people pulled out a total of billions of dollars.  When 9/11 came they did so even more.  All of these people needed a place to put the money and the new trend was to put it into Real Estate, housing prices started to rise.  By 2003 and 2004 many real estate gurus arrived on the scene, showing common people how to make money in real estate.  It was a great time.  Prices were going up each month.

To add to this information, for the first time, was easy to get and compile.  It was easy to find a good deal on a house online, you could even find out the estimated value of your house or any other by going to sites like Zillow.  It was also easy to get a loan.  Because home values were expected to keep going up you could get a house for $150,000 and get 100% funding because by the time you get close to closing it was already worth $175,000.

The housing market was a great investment, it is one of the only investments that you can get almost total leverage in. Figure this, you buy a house for $150,000.  You only put $10,000 as your down payment, you get a tenant in the house and they pay for all the expenses giving you a zero cash flow but no expenses.  Now you sit, wait a year in this market and the price of the house goes up by 10%, BUT your return was not 10%, because the price goes up on the whole value of the home, not just your down payment.  You now have $25,000 equity in the house, a return of 150%.  This is the reason that investors flocked to houses, huge returns.

For many people, the more passive kind who usually invest in bonds and such this was way too risky for them, so they decided they would simply buy mortgage backed securities.  100’s of billions of dollars flew into these.  What these were was baskets of mortgages, and you could buy shares in this basket just like a stock, they had sold and predictable returns.  If you were used to getting 2% on your money in a CD or government bond, now you could get 5% on your money by buying one of these.  It was great for pension funds and foreign banks to sock away money because it had a higher yield and was still considered very safe.

The reason it was considered so safe was because of the very low default rate in mortgages caused by a booming housing market. Most people would simply sell their house for a nice profit before they went into foreclosure.  The investment banks reduced the risk even more by bunching 1000’s of mortgages together.  They would then break them up into different levels.  If there were any defaults the investors at the lowest level would be wiped out first, and the investors at the highest levels would still receive their full returns even if 20% of the mortgages defaulted.  It was a great system.  The investment banks bought up over a 100’s of billions of dollars worth of mortgages using this process, and they charges a hefty fee for all of it, making them some of the most profitable companies in the world.

For almost 70 years there was been a set of two companies, founded by the US government to facilitate the flow and resell of mortgages, these are Freddie Mac and Fanny Mae.  Basically these were huge companies that would buy mortgages from banks.  If a bank could not resell the mortgages they would need to get deposits to cover all the mortgages that they wrote and that would be nearly imposable.  About 92% of all mortgages are resold.  Freddie and Fanny purchased over half of them.  They would buy them from the bank, the price was set by the value of the house, Credit of the home owner, zip code of the house and a few other factors.

This created a great system for the banks.  They would sit there and advertise that they can get you a great deal on a mortgage, they would help you with all the paperwork, they would send your information to underwriting, where they would basically see what was needed to make your loan sell for the highest price to Freddie/Fanny.  They had some rules such as the first mortgage could only be 80% of the value of the house, or else the homeowner would need to buy PMI (Private Mortgage Insurance).  The bank would then take your entire mortgage packet and find out how much they could get.  On a $200,000 loan at 6% there is someone making $12,000 in interest every year.   The buyer of the mortgage would pay a premium for the loan, but they wanted to make sure they would get their money back.  So what the banks did was to get the home owner to sign a pre-payment penalty clause.  Basically this was a clause saying that the bank would get 2 years worth of interest from the customer, that the customer would still have to pay 2 years of interest even if they sold or refinance the house before 2 years was up.  So on that $200,000 mortgage at 6% interest the holder of the mortgage was guaranteed $24,000 in interest payments.  Because this $200,000 mortgage was really worth $224,000 for the first 2 years they would offer to buy it for $215,000 from the bank.  The bank where you got your mortgage made $15,000, paying some of that out as a commission to your mortgage broker.  They also usually would agree to service the loan, meaning they would send out statements and collect the money on behalf of those who owned the mortgage.  If a loan had a longer pre-payment penalty the bank would get more money, if they sold it for a higher interest rate they would also get more money.  The more income they could show for the client the more they would sell the loan for.  The interest of the bank and mortgage broker was to get as much from the client as they could so that the resell value would be as high as possible.  A few banks even started to lie about some of the details to drive up the price.

Mortgages were sold almost instantly.  This allowed banks to generate mortgages as fast as they could.  It was a great deal, get someone to come in and fill out some paperwork, show that paperwork to the mortgage buyer, get the buyer to agree to fund the deal and then you close on the whole deal and walk away with huge profits.  Do this a few times a day and a little office with a handful of people can make millions per year.  And that is exactly what happened. The banks had every incentive to get you into a mortgage, and they would do whatever was needed to do so.  It was easy to get a loan, even if you had no money to put into the deal, they simply would do a 20% second mortgages, or even if you really had no income, you could just do a stated income loan.  People were buying houses who could not pay for them.  Their main plan to pay as little as they could each month, and refinance when that 2 years was up and they would have a ton of money due to the value of the house going up.  It was a great system that worked for millions of people.

All of this easy money was causing housing prices to sky rocket.   I live in Phoenix Arizona and between 2003 and 2006 prices for most of the city doubled, people were bidding against each other in attempts to get houses, simply because the house was a good investment.

Where was this money coming from?  Well as I said much of it came from people who got out of the stock market, and needed a new place to keep their money, a large chunk came from foreign companies.  Remember we are buying at least 700 billion dollars more of stuff each year than we export.  So many nations, China, India, Saudi Arabia have billions of dollars that they need to invest somewhere.  They want us to keep buying to they make it easy for Americans to buy things on credit, then we buy more and they sell more.  It is a great spiral that put America in huge debt while at the same time sending millions of jobs all over the world.  The is the greatest transfer of wealth in the history of the world, but more on this in another blog.

The Bust

In mid to late 2006 the prices started to get very high, and there were signs of problems.  Some of these no money down investors who bought on stated income loans started to not pay their mortgages and the prices were not going up fast enough to still leave the buyer of the loan with a profit.  The buyers of these loans started to change their guidelines on who they would give money to, they started to make it harder.  This was a sign to many investors to start to sell, and the number of houses for sale started to go up.

Some of the hottest housing markets were Southern Ca, Phoenix Az, Vegas Nv , Atlanta Ga, and Miami, Fl.  These markets saw some of the largest gains, they were all nice warm places to live and people have been moving here for decades.  But they also had something else in common, they were all major places where Illegal immigrants would flock.  In late 2006 and early 2007 there was a huge national debate about Illegal Immigration,  and many of those here illegally owned houses but decided to simply leave, they dumped their houses, many others just borrowed as much as they could and walked away.  And the prices in these markets started to fall.

Once prices started to fall it changed all the numbers for the banks and the buyers of the mortgages.  If you get that same loan for $200,000 the buyers have more risk now, they don’t have a security of the house itself because the value will likely be less than $200,000 if the customer defaults.  So they said that they would only take the best and most qualified borrowers.  No more stated income loans, no more loans to people with sub-prime credit.  Suddenly most Americans could not qualify to buy a house.   All of these people were pushed out of the market, demand for houses plummeted, and when demand goes down price is soon to follow.

To make matters worse some of the Sub-Prime loans started to default.  Many were from investors who were upside down on the loan, they borrowed in a corporate name so there was no ill effects to them to simply walk away and give the house to the bank.  So thousands of them did just that, it was smart for them to do so.  The people who used the system the most were mostly the smartest and best at it, and when things started to go down they were the first to get out.

Most of these banks only put a 1-3% budget in for losses and some are getting much higher losses than that.  These foreclosed houses had to be sold so the banks simply dumped them on the market.  But banks are not in the business of selling houses, and they do a very poor job of selling houses.  They are risk adverse so they only want buyers who they feel will actually close the deal.  For the most part they sell the house as-is.  They do nothing to make the house look good and nothing to try to sell it.  For most buyers, buying a REO (Real Estate Owned)(Bank Owned) house is not appealing.  People with good credit who can buy a nice house want that house to be ready, and come with a warranty.  So these houses sat on the market for a while and the only choice for the banks was to keep slashing prices.  This was the main cause for housing prices to plummet.  This caused even more people to realize that they are upside down on their house and more of them simply walked away.  From the middle of 2007 until now this process has been happening, and it keeps getting worse.

These banks then saw their stock start to melt down.  Imagine a company that has 250 billion in mortgages but they owe 200 billion in debt on those mortgages, lets call them Mega Bank.  It was great for them in the boom time, they borrow money at 3% and loan it out at 7%, making 4% on 200 billion dollars, or 8 billion per year.  They had every inventive to do this as much as they could.  This company would have a value of 50 billion dollars or so in book value, the stock market almost always prices your stock well above book value so the Market Cap (The total value of all stock of the company) may be 100 billion or so.  With earnings of 10 billion or so it would be at a Price to Earnings ratio of 10, something that wall street loves to buy.   This company would be a star.  Now what happens if there is a ton of risk in the mortgages that the company owns, the company figures out that 5% of their loans are defaulting, but for one loan that is a total loss it wipes out the profits from 10 other loans.  So their accountants do figure out on average how much are all of the loans that they company owns worth.  If that number is lower than what they currently value the loans at they restate the value of these loans and do a write down of these impaired assets.  If you have 250 billion of loans on the books your accountants may feel that they are only worth 200 billion.  50 billions dollars, on paper, just disappeared.  Some companies bought insurance for such a thing to happen, the largest company that sold such insurance was AIG, they have as much as 300 billion dollars of insurance losses out there that may be paid.   So if you are Mega Bank the value of your company just went down by 50 billion dollars, but in reality all the rest of your assets you owe so your stock crashes, your market cap is no longer 100 billion but maybe more like 10 billion, or even 1 billion.  Investors on the stock market don’t know what to do, all they know is that they can’t value your stock.

The Current Situation

At the start of 2008 there were 5 major investment banks in the US, and three banks acting as mortgage clearing houses.  These were the banks that were selling mortgages to investors.  The investment banks took most of their profits by keeping some of the most high risk and high profit mortgages for themselves.   4 of the 5 investment banks saw huge losses, and all three mortgage clearing houses saw major losses.  1 of them went out of business, Indy Mac, they simply took so many losses that they could not pay depositors any longer.  Freddie Mac and Fanny Mae lost almost all of their stock value and had to be propped up by the government to stay alive.

Of the 5 investment banks Bear Sterns was the first to fall, they went from a 100 billion dollar company one week to being bought out by JP Morgan Chase for only 1.1billion the next.  The next to fall was Lehman Brothers.  They lost billions in sub-prime mortgages.  Their book value was negative.  They has a lot of really good assets though and tried to sell to a bank in Korea, but it did not work and in September of 2008 their stock went almost to zero.  They declared bankruptcy On Sept 13th, and are being sold in pieces to different companies, stock holders will probably get nothing.  On the same day the third Investment, Merrill Lynch was purchased by Bank of America for $50 billion.  Bank of America stock fell 15% that day because investors thought that they had over paid.   That only left two Investment banks,  Goldman Sachs and Morgan Stanley.  On September 22nd 2008 these two bank, under new government requirements converted to traditional banks.

None of this was helped by the hedge funds, these are basically large pools of money that often bet that something will fail.  These hedge funds helped drive the price down of many of the companies I wrote about today.  But many hedge funds also lost money on the mess.

The government has decided that for the most part they are going to bail out many of these companies, they are also considering a new govenment agency that will, for a short while, buy up this bad debt for pennies of the dollar, allowing the banks to write off these losses and move on.

During this whole time it has gotten harder and harder to get a loan, basically unless you put 30% down, have perfect credit and tons of income you are not getting a loan.  The government put in a program to help some home buyers which helped out a bit.

Even with all of this going on our economy is still fairly sound.  Employment levels have only gone down a bit, and many other parts of our economy are still stable.

The Way Forward

I have always been a free market guy, I think that the system works best when there is freedom to be successful and freedom to fail.  The government is really taking the failure and greed of these companies and helping them out.  They are doing this to save the normal people and the economy as a whole and to fix our broken mortgage system.  The government, and our President have seen how large this problem is and that they only way to fix it is a huge government bail out, and I AGREE with them.  The bail out will put stability into the system, it will prop up all the banks, and it will resolve the credit crisis allowing money to start flowing again.  They are looking at up to 1.5 TRILLION dollars in loans, and buy outs.

I think that we need to do this, if we don’t our economy is sunk, but this is NOT a progam that I think will cost the taxpayer any money, in fact I think it will make our government the highest profits that we have ever made.  Think of it this way, they are not just giving money away, they are going to be buying mortgages at the low of the market, the current talk is to buy them for 50-60 cents on the dollar.  If they do that they will set a low in the market, these mortgages are still backed by the actual real estate and the economy will turn around.  So one of three things will happen to each of these mortgages.  They will either get forclosed on and the government will sell off the house, most houses are still valued at over 60% of the value of the mortgage so they will still make a bit of money.  Option two is that later on they may sell back the mortgage for a profit, maybe 70-80 cents on the dollar.  The last thing that will happen to some of these loans is that the home owner may sell or refinance the house, and the government will get 100% of the value of the house, basically doubling their money.  I think that if the government does this that they will make at least a 20% profit on the money.  They are talking about buying 700 billion in mortgages, making them about $150 billion.

For AIG they are giving them a 2 year loan for $75 billion.  In the termns of the loan the government gets a 11.25% return each year AND they get stock options where they can buy 80% of the company at a very low price.  The company was worth over $200 billion last year.  If it goes back up to even 100 billion the government will make almost 80 billion from their stock options, and still make about $17 billion from the interest on the loan.  This bail out could make the government almost 100 billion dollars.  The owners of AIG see how much they will loose if the Government loans them the money so they are still looking for other lenders to help them out.

Almost everything that they are doing is set up in such a way, this whole bail out system as a whole, will probably cost out government nothing and make us at least half a TRILLION dollars in the next 2-3 years.  This could wipe out our deficit and radically change our government balance sheet.   It is not enought to totally wipe out our deficit but it will reduce it a lot.  If the economy really picks up so will taxes and the government has a good chance of being in the positive.  Of course this positive change will not happen until 2009 and if a democrat wins as president will probably say that it was them that made this change and that they are the reason that the government is suddenly so profitable, but we know the truth.

On a side note the President does very little to effect the economy.  Most of what is done is done by congress or the treasury department.  Also anything that the president does do takes 2-3 years before it really goes into effect.  Such as the losses in 2000 were not caused by Bush, he just took office.  All I know is that I would never vote for someone who thinks that raising taxes in a time like this is a good idea.

Thanks for reading, if you liked this blog entry, please leave a comment, I read all of them, and also please subscribe, you will then get all the nice future entries that I make.  Thanks.

I am a total political junkie.

Wow I have found myself watching a huge amount of political stuff in the last two weeks.  These conventions were very interesting.  The tone of the whole race has really changed, people are now back to saying whatever they can to attack the person they don’t like.

I find it quite sad that people would disrupt an event that they have no place being at just to get some air time.  I find it sad that people attack other people for something unimportant just because they oppose them on a totally unrelated issue.  There are a few people who are not doing this but for the most part they are doing everything they can to bash the opposite party.  At least the candidates themselves seem, for the most part, to only been bashing on the issues.

It is OK to say you don’t agree with someone, and lay out point by point why you don’t agree with them.  You can argue with them as much as you can.  But what is not OK is bringing up non related issues, and bashing them on that.

Because of this I have had much less time for blogging recently.   I have not spent a lot of time blogging about politics, for three main reasons.  First this is a business blog, I do think that politics has a lot to do with business but the things I have been focusing on don’t.  Second, and most important, there are MANY people blogging about this, and most of them spend more time and energy on this issue than I would like to.  I like to collect info more than just give opinions.  Third, I hate it when people are so biased that they attack me for saying what I would say, it is OK to attack my views, but on other blogs when I post a comment that makes sense, they just write things that are simply evil because I don’t support their views.

Awesome Free Swag on the Internet

Swag is the cool stuff you get for free when you go to conventions.  (Stuff We All Get) You also see it for many different businesses.  This article says that Swag is there to promote their products, and reward loyal customer, not to make a profit.  This is something that most businesses simply DON’T UNDERSTAND.   In the world of the internet it is rare, most companies simply can not afford to send out free stuff to the world with no return.

And some that do only send free e-swag, the digital stuff cause it costs them almost nothing.  By far the BEST e-swag I ever seen is called America’s Army.  It is a top quality video game, but instead of being sold it is given away for free to promote the US Army.  For the rest of this entry I will only focus on REAL stuff that gets sent to you.

5LBS of FREE CANDY by Southwest Candy – This one is great, I asked for it on monday, got the candy on tuesday via FedEx.  It is really good stuff, I really love the Jelly Belly ones.  They sell candy wholesale, really cheaply.  I will order from them if I ever have a bulk candy need, maybe Oct 31.  Here is a video of a girl getting her free candy.

FREE GREETING CARDS by Send Out Card – This is a great program where you can go online and customize quality greeting cards and then they are sent by postal mail directly to anyone you like.  You get the first three for FREE and after that the prices are cheap.

FREE MAPS – Here is a list of a ton of places where you can get free maps.  Really cool if you plan to travel.  If you would rather have an entire Atlas then click here.

FREE GUY STUFF – Here is a list of 9 things you can send away for.  I sent away for a few of them, the old spice body wash was the only one I received, it was enough for about 2 uses, so I am saving it for my next trip.

FREE LOCAL STUFF – You may or may not know, but Craigslist has a huge section of free stuff.  I have used it a few times when I rather just not pay.  Just look under the for sale section for the word free.  Search in your local area to get your local stuff.

TOTALLY FREE STUFF – This is a huge website with tons of links to free stuff.  Most of these will call you and such, but that is ok.  Go there now to get the full list.

Time is more important than money.

Today I read a blog that very clearly states the delegation thing I was talking about the other day.  Sure you could do everything yourself to save a bit of money in the short run but in the long run that type of thinking will cost you your potential.  This is what AJC said on the 7million7years blog today.

Trading time for money is exactly the wrong way of looking at it: time is a finite resource; money is an infinite resource, why trade the finite one for the infinite one?

In other words, they keep printing money, but nobody is giving away more time.

So, every time that I can find an opportunity to ‘buy’ time with my money that’s exactly what I will do.

It’s why I give my shirts to the drycleaners; my mowing to the landscapers; and my property management to the experts. It’s why I outsource practically everything to do with my investments, too – except picking the investments themselves, or managing any issues to do with risk.

If I didn’t outsource my property management, I would eventually stop buying real-estate because every property that I bought would add to my workload, and who wants to do anything that makes you have to work harder?

So, I may lower my return on each property somewhat, but I reinvest the ’saved time’ into purchasing more investments … the whole shebang is much greater than the parts.

If you want to be a successful business own the employee mindset and the frugal mindset will hold you back.  It has for me, I see it now that this was one of my biggest mistakes, that is why I talk about it so much.

Why do Europeans love Obama so much?

I have noticed over and over again on the web, and talking with my friends in Europe that Europeans really love Obama, in fact if they could vote it would be a landslide election.  Of course all the info they get is from the media, so what is the European media telling people about him.  You can do a Google search and see long lists of glowing articles about him.  In the last two elections here in the US in 2000 and 2004 all of Europe thought that the democrats would win by a landslide and in both cases they were shocked and dismayed.

Maybe it is because Obama wants America to be like Europe in many ways.  He wants higher gas prices, wants to ban new drilling, and limit the importation of oil.  He wants to pay for universal health care, just like Europe.  He want to raise taxes to the point that you are working for the government.  Obama wants a weaker military, just like most of Europe.

Maybe it is true that he has become a celebrity.  Everyone knows how Europe loves those.

Europeans are blogging how they would love to be Americans, just to vote in this election.

But we here in America don’t want the be like Europe, with little economic growth, with a growing stronghold of atheism, with a weaker family structure than even the United States.

If you are in Europe, please tell me your view of Obama, I really would like to know if/why you support him.

July, A record month for this blog and why

This month has really been a great month for this blog, it looks like Jason Dragon is getting some critical mass. July of 08 had over 2.3 times the unique visitors as the second best month, May of 08. Blogs are suppose to go up but this is a lot faster than normal. July 30 was the best day ever passing July 24 by 6 hits.

The stats say that this is due to a few things. First I started a Computer Entry section which is simply a page that has a list of all the blogs that I wrote on the subject of computer, but this page is very popular, it is on the top 5 of my pages every month. In that section I wrote an article about Laptop computers, and from the day I wrote it it has always been in the top 2 of all the pages. It now is by far the most popular article that I have ever written. But there is an article I just wrote yesterday, about StoresOnline, that had the LARGEST first day viewing of anything I ever wrote, it had more views than my entire blog was getting last month. The subject is something that many people are asking about online.

I also did a few things differently, I blogged a bit more with 14 entries, my previous record was 12. I also added my blog to StumbleUpon, I did not put the links from my blog so I really only got a few hits from that. But the MAIN area where I got more hits was by finding great blogs that had content that was much like mine and if I found a place where I could push the conversation forward, almost half of my new visitors came from that. I also was added to the Planet section of PF Buzz along with many of the top Finance blogs. I also was able to get more hits by adding more tags to my articles, I have about 20% of the hits coming from this. I also added myself to twitter finally, I have been trying it out before I publicize it but you can check it out if you like. I also rewrote my personal webpage at JasonDragon.com.

My best blogging moment of the month was due to a fairly unpopular buy very important blog I wrote, about why our country is in trouble economically. I linked to the Perot Charts site and the right hand guy, Mike Poss, of Ross Perot noticed the link and came to my blog, read it and took the time to email me about it. I always liked Ross Perot so it made me feel good to get this note.

In other blogging news I am still in the race for the 7m7y contest. This is a contest that could be described as mentorship by a really great and successful guy. He is going to mentor only 7 people and he is willing to do it for 7 years. He will help them all become multimillionaires. He will document the process and write a book on it. In two weeks or so the final 7 will be selected, I really hope I am one.

Thank you to all my readers, and all the people that subscribe to this blog, if it was not for you I would not be doing this, and this process has really taught me a lot.

Thanks, Jason Dragon

The StoresOnline meeting, what I thought

I always am trying to learn about business. Today I attended an event that I received an invitation for. It is for a company called StoresOnline or StoresOnline.com. It is a company that sends our huge amounts of direct mail with invitations to an event about how to make money on the internet. They promise free dinner and a free (128MB) MP3 player to everyone who shows up and stays for the whole event.

Well let me tell you what it is all about, and what you should expect if you ever go to one. First off they seemed professional and they really has their act together. While we waited for it to start they were showing a slideshow with facts about the internet and how big of an opportunity it is. It started on time then they spent about 30 minutes telling people about the internet, and how powerful it was. They then offered a website you could build yourself, selecting from about 40 templates, inserting your text and photos, and setting up your shopping cart with the items you want to sell. It was almost like the one that I currently use, PrecisionWeb, but they made everything through the website, no FTP, no domain name, no email or any of that (At least they did not mention this). For this service they charge a set-up fee of $199 (That if you bought before you left the room and thought about it would be reduced to $50.). Then they charged a hosting fee of $24.95 per month. I pay only $19.95 a month for my service and I get MUCH MORE than they offer.

Now here is where it starts to get really bad. They took some polls. First off most of the people there were over the age of 65. Next of the 200+ people there only 7 of the people in the room currently had a website of any kind. (That includes MySpace or blogs or anything) Next at least 2/3rds of the people I talked to there did not even own a computer. Now at the end of the meeting they handed everyone a order form/contract. If you sign it says they will bill your credit card the monthly fee until you cancel in writing. For me it was crazy. But I was surprised when I looked around almost half of the people there were signing up, handing over their credit card info and their money. One guy who signed up for his own web site did NOT even have a computer, and only used one a few times in his life.

The people who run StoresOnline know that almost all of these people will NEVER make even one sale. Whenever they talked about their success rate they always said “Very active clients” or something to that extent. Should you really be selling this service to people who you know with 98% certanty that they will never do anything with it, is that really ethical?

Now I would say that everything they said was very honest (They were careful about this), and they did disclose a lot of things about but they did not mention and success rates or anything that would make people think twice about this. Many times the pointed out how much that they were disclosing, even though the most important things were not. It was very polished.

Now they started talking about the fact that if you have a web site but nothing links to it, and no one knows about it, it will never be successful, which is very true. They now said that they have the fix for this, and they will show you how you will found with ease and how you can make a ton of money using their secret tricks to get listed first in every search engine. They then showed some examples of their clients, like the one who is FIRST on google with the keywords “inland empire thomas guide”. OK anyone that knows about SEO is laughing right now, I know. It was hard for me not to. If you search for “thomas guide” they are middle on the second page, not too bad. They listed 10 different methods that they will teach you to drive traffic to your site, such exciting things as, “Permission Email”, “Newsletters”, and “Affiliate Programs”, and they promised to teach you all the secrets of these. What was missing from the list is anything that is Web 2.0, such as blogging or and community like linked in or myspace. Everything they were showing was right from 2001.

Next they pushed an event in two weeks where they would be talking more in depth about internet marketing. You would need to buy the plan today in order to go to this event. And then they dropped the bomb, at this event in two weeks they will offer a package that will give you access to these secrets and the other things that you need to get people to go to your site it will ONLY cost $3,600, but they will make a special offer at the event, but you have to go to hear about it. They then talked a bit about dropshipping and how it is the KEY to success, then they told the only lie of the night about how people can go to your site, order something and some of the money is “Wired” to your paypal account while the rest of the money is sent to your dropshipper and it all happens while you sleep with nothing from you. I talked to them later and they said that it really is not possible to do this but they just wanted to make it simple to understand for the people there, and I found that acceptable. They talked a lot about dropshipping and that they had a special secret list of dropshippers. I do not know for sure but I would bet you that this is NOT included in the $3,600 that it is an extra charge. They also talked about 1 on 1 consulting and how important it is, this may or may not cost more.

So here is what I what I think about it all. If someone is clueless about what is out there, and they are really motivated to build a business and need someone to hold their hand they could be successful with this system. (But how many smart motivated business people are clueless, they don’t coexist.) There is always the few successful people in any group. But for the VAST majority of these people it will keep their hopes up, BUT they will never make a penny, and many will spend thousands. I think their products seems good, I have seen others sell less for more money, but I also know if you look you can get much more for much less. Of course when people pay a lot for a little many of them get angry and upset, I just found a blog that some of these people have created, visit it HERE. Be SURE to read that site before you do business with this company.

One really annoying thing is that during the break I started talking to some other people there about computers and how I sell them. One of the StoresOnline people came up to me and was not happy, he basically asked me to sit down and stop talking to people. It was too late, I already gave them my business card.

I am really impressed with their presentation and how it all works, it was very slick, and I am sure they make a ton of money. They really controlled the room, no one could talk to each other and every time someone tried to ask a question they would stop them, one guy even got mad and yelled over them, but he was ignored. Who would of thought you could sell $100 worth of stuff for thousands and still have people lining up. They are able to send out targeted direct mail, then hold a meeting, give away free food, and free gifts and STILL make a profit. I need to figure out how to do this with one of my businesses. Maybe get business owners in a room and talk to them for 90 minutes on how to get the most out of computer technology, then sell them computers, and show them send out cards. At least I would only talk to people who I knew could use the product, not just any dumb person with a credit card like these guys do.

A great source for motivation, PF Buzz.

The world of blogs is huge.  There are over a million active bloggers, and millions more who do it every now and then.  Tens of millions of people read blogs every day.  Of course you know this, you are reading this blog right now.  But what it new that I want to tell you about it a site called PF Buzz.  The PF stands for personal finance.  It is a group of about 50 blogs all about how to make more money and save the money that you make.  Almost anything you want to know about this subject you can find in one of these blogs.

Now I do not agree with all the other viewpoints, many are designed to show you as an employee how to save the money you make, but as I have said before earning more money is a much better focus than saving money. I am a business person not an employee. It is still great to know what other people are thinking.

The biggest value of this site is the awesome blogs on personal motivation, and there are many of them.  They tell you how to think correctly, how to be organized and how to set goals and generally how to be successful.  This is the important stuff that if you read every day will put you in the right mindset for success.  I have PF Buzz on my Firefox Bookmarks toolbar so it is always there, only a click away.  If you want to be successful I suggest you do the same.