Category Archives: Money

Income Inequality in America

Business, concepts, Government, Inspiration, Money, Politics, The World

Recently there has been a lot of talk about income inequality in America.  There is some notion out there that it is ‘unfair’ for someone to make a lot of money.  The thing is that there are million of people working hard each day to get rich.  A few million people are entrepreneurs, people who take a risk and start a business, they hire people, come up with new ideas and in the mean time risk everything, and many of them fail, the best ones get up again and try again.  Many of them work for years without getting paid more than the people who work for them, some work a whole year and make nothing.  The stress about the business, the sales, the clients, and mostly about helping out the employees.  Why do they do all of this?  They do this because they have a dream, the dream to building something that will last, something they can give to their kids, and the dream of being rich.

So they work for decades and finally they are successful, they have a system that works and they are making good money, and they are now rich, making more money than any of their employees will earn in their lifetime.  These are the people that the pundits are calling the problem now, they took the risks and made the hard choices to put themselves in that position, and people look down on them for it.   It is a sad day in America where prosperity is a bad thing.

The main problem is that very few are educated now on how the economy works.  America is a great country, there still is a lot of opportunity here.  Someone can start with nothing, not even knowledge and learn in a short time how to do something useful for the economy, they can then work hard, and smart  and become successful in a short span of time.  I love to see how people come from other nations, nations where there is not much opportunity, and it is hard to get ahead, they come here and work hard, work smart and in a few years they are better off than most Americans.  And most Americans resent them for it, sad.

I think that a lot of this comes from the lack of education most Americans have about how the world really works.  Americans for the most part do not travel out side of the US.  In fact only 36% of Americans own a valid passport, and only 6% of Americans, on average, leave North America per year.  It is estimated that only 20% of Americans have ever left North America, and about a third of them did it while in the military.  Once you see how the world works, your understanding of how good things are here in America really changes.

The Philippines is a below average nation in wealth, with a per capita GDP of just about $3,000.  The average American makes more in 3 weeks than someone from the Philippines does in a year.  But they still need to spend on food and housing and many other things.  But no one there has an attitude of this being unfair, and that they should be given something for free.  That is a very American attitude.  They are thankful for what they have, they are happy for the most part, and everyone helps each other out.  If someone is in need the family and community helps them.  When they travel abroad, they come to work, because they know how they can make as much in a day here, as they do in a month there, they work hard, live simply and for that reason they usually have great success in the US and other nations.  If you earn $1000 a month there you are upper middle class.  People look at the wealthy there as something to aspire to become, not something to be taken down.

2015-08-23 10.50.40The attitude there is so much different and better than in the US.  In the US people feel entitled to free stuff, we are raising an entire generation who feel that if they don’t want to work they should have free health care, free food, free housing and free spending money just because they live here.  They feel that if they should bother working that they should make $15 per hour at least.  They have not yet seen the reality of the world.  Most Americans feel they need tons of money because they must have a $500 smart phone, with unlimited data, and they must have a nice big TV along with a big cable bill and of course, the most expensive of all they must have a car.  In almost all of the world a car is a luxury only the most wealthy have.   In most nations car ownership is under 15% of the population.  In our entitled society even the most poor among us feel that they need a car, and of course they should not pay for it.

I am a fair guy, I think that if you really can’t work that you still should be taken care of, I feel that the primary job of this should be done by charity, and that the successful among us should support such charity, but this is being done by the government, and we are forced, with threat of violence to support it, so we have become a less giving society.  I think that widows and orphans should be taken care of, given food and housing.  I think that the really disabled should be also taken care of.  In none of these cases should they be given money that they can spend on anything, but given vouchers for housing or food.  We need to redefine what a disability is, right now anyone with even a minor problem can be called disabled and get free money.  The vast majority of ‘disabled’ people could easily hold a job.  In fact many people who are getting free money from the government do hold jobs, they just work under the table, that is why the number of people working under the table or 1099 is now almost 1/3rd of the workforce, they want to work, but don’t want to mess up their free government money.  We have really gotten ourselves into a huge mess.  The problem is that about 1/3rd of the population is dependent on this system now.

We need to start to see things as they really are.  When you take money from someone who earns it without having the use of it and give it to someone who has it without earning it you are a thief.  You are teaching them both the wrong lesson, you are teaching the earner that they will be punished for doing well, most do it anyway because they still get to keep most of what they earn, but there is talk to make it more and more progressive of a tax if you earn more.  You are teaching the receiver that they can use the government to get them free stuff, that there is no need to better themselves and to work hard, that things will be handed to them.  This also puts the government in a morally wrong position, a position of being the thief, true everyone loves robin hood but he was still a thief.  This is on a much more massive scale.

I have no problem with a well run government to provide for the common defence, to build roads, and provide a good education, safe places to live and places to gather such as parks.  I even think that the wealthy enjoy such things more than others, and use such things to prosper themselves so they can pay a bit more.  I don’t think that there should be loopholes, the government should not use the tax policy to tell people what to do and what not to do.  But most of all I don’t think that they government should be taking money from one group and giving it to others as a wealth transfer.  Did you know that only 34% of our federal budget is spent to actually run the government, all the rest is used to move money around from one group to another.  Now to me that is what I call Unfair.  Some CEO who worked hard his whole life and makes a huge amount of money is ok by my, he worked hard to get there, he is likely providing much more in value than he costs or why would he be there.  But taking his money and transferring it is totally unfair.  Most people who are in favor of such transfers are usually the recipients of these transfers, or they hope to be.

I am sure that many will argue with this essay, they simply see the world differently than I do.  They usually have never owned a small business, have never traveled overseas, or they simply were raised with a different mindset.  People can rework stats and %’s to make almost any argument, all of my stats came from the most common official sources.

Let me close with a story I heard, if you have a bed to sleep in, a toilet that flushes, and a fridge to store your food you are in the richest 23% of the world population, if you have a computer or smartphone, now you are in the richest 17% and if you have a vehicle you now are in the richest 8% of the world population.  There are 6.4 billion people in the world, so 64 million people would make up the top 1%….of those 64 million people over 40 million of them live in the US.  If you live at the poverty line in the US, you are still in the top 5% of the world population.  If you live at half the poverty line in the US you are still richer than over 85% of the people on this planet.  So stop wining, and take advantage of the opportunity this nation provides, literally billions of people would do almost anything to be in your shoes.

The Opportunity Fund

Bootstrap, Business, Computers, concepts, Credit, Entrepreneurship, How To, Marketing, Money, , , , , , ,

There is so much talk on the internet in the world of personal finance (PF) about having an Emergency Fund. I agree that an Emergency Fund is important; you want to make sure that you have enough cash to take care of a stolen laptop, or your AC going out in the middle of summer. There is a lot of focus on building this up quickly; most PF writers say that this is more important than paying down debt, which I also agree. 

But my opinion, another important thing to create is what I call an Opportunity Fund.  This is a fund of special money that you keep aside for in case a really good opportunity comes up.  Opportunities come up much more than Emergencies, so this is the fund that I focused on first. I felt that this fund was critical to future success so I used many of the tactics that people like Dave Ramsey suggest when you are building your Emergency Fund.  Such tactics include Selling Something, and cutting back on expenses, especially those recurring ones that most people don’t really notice, then finding extra income opportunities.

Most PF writers suggest ways with no investment to work hard and make extra income but with an opportunity fund helping out you can supercharge this and quickly pay down debt, build all of your funds up, and if you are doing really good you may even make a business out of your fund.

So I started building my fund about 5 years ago.  We looked for people who needed to sell items quickly, to pay their bills or because they were moving, I stuck with electronics and computers because I knew the market and knew I could flip the items quickly.  Most people who are selling things are not selling to get the most money, most people sell because they need quick money, or want the item gone.  Almost every week I buy a laptop from a parent who took it away from their disobedient child as punishment for something the child did.  Most of these parents have no urge to get the most for their money, they just want the item gone.

I only use the fund to buy things that I am fairly sure I can flip quickly.  I don’t want to deplete the fund so I make sure I can turn the items over and get my original money back along with a nice profit.  Time is money so the longer I think something will take to sell the lower % of my projected sales price I need to get.  My general goal is to double my money in 30 days.

I often buy things that are on huge sales.  I built up my fund the entire summer and early fall my first year because I knew I could take advantage of Black Friday, so when November hit I made sure I sold as much as I could and made this fund as large as I could, then I spent a few days looking over the ads, and I targeted the things that had the largest amount below normal prices.  Anyone can get things for cheap online, so I made sure that I was buying at a price low enough that even if I sold online I could make a large profit.  On black Friday most people look for things for their house, they buy and hold on to these items until they are worthless, so even if you buy at the lowest price you still lose money financially. So many people focus on the TV’s and such but the real money I have found is in the smaller items, the ones that there are no limits on.  My first black Friday doing this I focused on External Hard Drives, that were selling for 40% of normal price, bought a whole cart of them. I found wireless mice for less than 30% of retail price, got over 100 of them, found 32 GB USB Drives for just $9.95 each, still a good buy today, a few years later.  I also got laser printers for $39 each, 22” Monitors for $89 each and many other good buys that most of the people just did not see. (Quick Tip, I use the site ShopLocal to find the best sales on new items.) I then listed these items on craigslist for more than I paid, also called up people I knew and asked them if they wanted any of these, I offered to come over and set up the items and show them how to use it.  I spent $3000 that y

ear, and less than 30 days later I had the $3000 back into my Opportunity fund, AND I still had about half of the stuff left!  I now do this every year, it is crazy the good deals that these places put out on small items, most of these prices are less than the cost to make the item.

CAM00449

But the real, supercharged creation of money from my Opportunity fund came from used items.  I know a lot about computers, so I offered to buy peoples headache computers off of them.  I have focused on laptops, and I have purchased over 150 laptops each year for the last 5 years in a row from private sellers.  By the time 2011 came about I was doing this so much, and needed more room and space that I opened a computer store.  By that time I had built my fund up to over $10,000 along with $10,000 or so worth of computer parts.  So I used it all to move into a store.  I was able to get a very nice store on a shoestring budget, never stopping buying and selling.  I then quickly moved into buying and selling much larger amounts of items.  I depleted my fund to build the store but worked hard and smart to build it back up.  I was putting all of the profits into building out the store, and getting extra inventory, it took a year to finally have in stock all that I wanted to have, then I started building up the fund quickly, once I had enough I quickly became free of consumer debt, for the first time in my adult life. I bought a car for my wife, bought a work truck for the business, then a new SUV for myself.  I also have build up my opportunity fund again.

SanteFe
The Santa Fe, with my truck in the background.

When a good friend of mine came to me trying to sell some items he needed sold quickly to help him with a fine he needed to pay, I was there able to help.  When others needed to borrow money, I was there to help.  When a deal comes across for 300 monitors at crazy low prices I am able to jump on it. When a computer store goes out of business I have the funds to buy all their inventory for pennies on the dollar. When a banner making company wanted to sell their plotter I bought it, now I can make vinyl letters for people, expanding my business.  When a school auction went up I bought 50 chairs and 100 tables, sold 60 tables on craigslist and more than paid for it all, now I have the rest to use and help organize the store.

I am able now, with the combination of a nice Opportunity fund, a large moving truck, a warehouse, staff, and a store to move $15,000-20,000 worth of stuff per month, with only about 40% going into what we buy stuff for, and 30% going into overhead, the other 30% goes into build up the business, giving money away, helping people and saving up to buy our building.  And yes the business has an emergency fund equal to 3 months of expenses, and so does our household.  We have just meet these goals in the last few months, this will allow us to start to really do good things and help people out.

So I have said all of this to show you how thinking different, and building up a fund to take advantage of Opportunity is so important.  Do it in the area you know about, if you are an expert on cars, then buy and flip cars, if you know about guns, there is great money in that, if you know about antiques, I know people who made fortunes in that, real estate works also if you have enough money, if you don’t have enough you can always use other people’s money.  In 2010 and 2011 I did some large deals, and my Opportunity fund was not large enough, I was not shy at all about borrowing the money, doing the deal and paying back the money.   Doing this allows you to follow your passion, to earn money by doing something that you love to do, and of course you can do it as little or as much as you like.  I am sure 80% of the people who read this would never turn it into a business, most people just aren’t wired for that. But maybe you can use this fund to get out of debt, or buy that house you wanted, or even to build one massive Emergency fund, which you can always borrow from when a really good opportunity comes along.

 

Free Credit Reporting Sites – Credit Sesame vs Credit Karma

Business, Credit, How To, Money, , , , , , ,

Keeping a good credit score is important to business success. For years now there have been places where you can view your credit scores online, but all of them charged for this service, some gave away free trials but if you did not cancel in full ASAP you would be charged a huge fee, and they made it hard to cancel.  Sites had to charge because the data cost them money, so did building the site.

Check your score for freeAlso for the longest time credit card companies would pay sites who refer them business (ie. Applications) a small commission for doing so.  Finally someone got the bright idea to make a credit score site and is paid for, not by the users, but by the advertisers, the lending  companies who the site would suggest that people use.

Two such sites popped up.  One is Credit Karma, and the other is Credit Sesame.  Both sites offer scores for free, and limited credit information and both offer advice and suggested loans or cards you may receive based upon your credit score.

But Which One is BETTER?

I have signed up with both of these sites a while ago, and I have been using both for months now, both have their pros and cons.  Here is a breakdown of the differences.

[table caption=”Credit Karma vs Credit Sesame” border=”1″]

“”,Credit Karma,Credit Sesame

Founded,March 2008,September 2012

Score Source, TransUnion, Experian National~~Equivalency Score~~this is a score that is usually~~10-15 points less than a normal FICO Score

Data Freshness, Every 5 Days~~I have noted that when they both update on the same day this is much more fresh, Once per month

Design, Clean and fresh blue design, fresh teal design with but much more pushy with the advertising and trying to upgrade you to full credit reports for extra money

Android App, Very nice app with lots of info and is clean, Not nearly as clean with much less data and more ads

Connections, Allows you to get data from some of your credit cards directly to show on the site, Does not do this.

History Feature, Shows a list of all changes from last report and keeps track of it in a feed type log~~they also show a graph of the last 12 months of scores and you can also see last 12 months of balance history of any card, Just a few months of your score only

Best Feature,The See how you compare section,Allows you to enter your financial goals and it will inform you when they find a product to fit that goal.

Worst Feature,They use TransUnion which is not as correct and is more focuses on the east coast way of doing things, You can’t actually see who your debt is with~~it is all just given names like Credit Card 1 and Auto Loan not the real names of the companies~~the information is much more limited

Advice, The Advice is mostly Q&A that is crowdsourced it has quite a few great questions with some really good answers~~There are also 5 Calculators along with 61 articles about credit and a fairly active blog, The advice they offer is all products from their sponsors that may help you go more into debt

[/table]

Conclusion

In summary I think that Credit Karma is a mature all around good tool, they offer a fairly good level of information and allow you to view each open account you have on your CBR in full with history graphs and sometimes it can link to your actual bank to get even more current data (This data does not reflect in your score).  The Advice section is robust.  There is a good focus on the amount of your available credit that you are using, which is one of the most important things you need to focus on Credit Sesame does not show this information at all.

Basically I feel that Credit Karma is a really good tool on many levels, something that can help you out. Credit Sesame on the other hand brings almost nothing to the table except more offers and a lot of advertising.  The only reason to use it is to check a different credit company to see if there are differences.

Arizona Statute of Limitations on Credit Card Debt

Arizona, Business, Government, Money, Politics, , ,

Many people have been asking me recently about Credit Card debt and the statute of limitations on it.  This the the amount of time that a bank can used the legal system and sue a customer to collect a debt.  After this time they can only ask but not use the legal system.  It is a complex issue here in Arizona because for many years it has always been Three years but recently things have changed the Arizona State Legislature created a bill, HB2412 to make it 6 years.  It passed on April 11th 2011.  But this bill was so short and so poorly written that it caused a huge amount of lawsuits and problems for the People of Arizona.

This is why…  There is a Federal law that defines all credit cards as “Open Accounts”.

Open-ended Accounts: These are revolving lines of credit with varying balances. The best example is a credit card account. Please note: a credit card is ALWAYS an open account. This is established under the Truth-in-Lending Act:
TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602
§ 1602. Definitions and rules of construction(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

And there is STILL on the books this ARS which defines all Open accounts as having a 3 years Statute of Limitations.

ARS 12-543. Oral debt; stated or open account; relief on ground of fraud or mistake; three year limitation

There shall be commenced and prosecuted within three years after the cause of action accrues, and not afterward, the following actions:

1. For debt where the indebtedness is not evidenced by a contract in writing.

2. Upon stated or open accounts other than such mutual and current accounts as concern the trade of merchandise between merchant and merchant, their factors or agents, but no item of a stated or open account shall be barred so long as any item thereof has been incurred within three years immediately prior to the bringing of an action thereon.

3. For relief on the ground of fraud or mistake, which cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.

So if you take both of those together, it would seem that it is still 3 years.  But with the bill passed in April 2011 they only edited ARS 12-548 to read…

ARS 12-548. Contract in writing for debt; six year limitation; choice of law

A. An action for debt shall be commenced and prosecuted within six years after the cause of action accrues, and not afterward, if the indebtedness is evidenced by or founded on either of the following:

1. A contract in writing that is executed in this state.

2. A credit card as defined in section 13-2101, paragraph 3, subdivision (a).

B. If there is a conflict between another jurisdiction and this state relating to the statute of limitations for a debt action as described in subsection A of this section, this section applies.

So the ARS now has conflict within it.  There is also nothing in the bill to “Grandfather” credit card debt that was already out of SOL but now is back within it.  So these questions, as most do, found their way to court and the Judges have decided to lean in the favor of the banks for the most part.  So now people who have old debt are now being made to pay, which will result in more Arizona bankruptcies, and more money leaving our state.  It would have been really nice if the above bill made things crystal clear by REMOVING the part in 12-543 about open accounts, but they did not.

IMHO I think that the limit on Credit card debt should be 3 years because if the bank can’t get their act together in 3 full years people should be free from the worry of the unknown so they can move on a rebuild this economy.

So now people can’t move on, and people are getting aggressive collectors calling them.  And our legal system is filling up with cases that were previously long dead.   This is a great example of a simple rule change that has huge unintended consequences.

As I have been getting into the ARS more and more I have noticed so many conflicts within it where two different things are said in two different ways in two different areas but they both affect the same thing and make it confusing for citizens, and a mess in a legal system.  There is nothing that can be done to these messes with out an act of the Legislature.   It is probably too late in 2012 to do anything about this but there is always 2013.

 

Paypal security

Business, How To, Money, The World, , , ,

As a business I have a credit card processing account, but if someone wants to process an order over the phone or internet I don’t use my account, I have them send it with PayPal.  I do this for many reasons.

First PayPal has built the most secure system for processing credit cards, if it is Fraud, usually the bad guy will give up once you mention PayPal so it saves a lot of time.  This has save me countless hours of dealing with scammers.

Next, I don’t want to be responsible for having the clients information, with PayPal they never need to tell me anything.

PayPal is the only safe way to take international credit cards.  With PayPal they will be much more fair about a charge back than a foreign bank will be with an American company.

Another reason that this is ok is because PayPal charges 2.9% and my normal company charges 2.8% so the cost is not much more, and well worth it.

There is a small downside to PayPal and that is that sometimes they will favor, unfairly to buyer if there is a dispute, but if you are a good company you should never have those anyway.

You likely have a PayPal account but if not you can CLICK HERE to make one and it will help support my blog also.

 

 

 

Scammers just don’t get it…

Business, How To, Internet, Money, The World, ,

Well today I received another check in the mail from what I thought was a scammer.  They did the classic over pay scam.  Basically they emailed my company, asking if we could reload windows and office on 10 laptops.  They never said where they were from but that they would send us a check and send us the broken laptops to fix.  Simply because their email was, bi.courtney97@gmail.com, not at any company I already had a red flag, this “Courtney Badgett” was using a free email account that can be created with no ID verification.  Red Flag 2 was that there was just plain text in the email most companies have a footer, at least these scammers could speak fluent English which is not really too common among scammers.  (If you ever see the word “Kindly” just run, this is a word that all the English as a second language schools teach people but real speakers almost never use.)

It started simply enough

Hi,
Are you capable of repairing laptops in bulk? Let me know.
Thanks

Of course I said yes.  “She” then sent a list of what needed to be done and asked how much.  Then after a day I received this email.

Hi,
Thanks for the information. I’ll have the laptops brought out and ready to be shipped to you, and will have my secretary prepare your check as soon as possible.
Thanks.

Not bad, I thought to myself “I will believe it when I see it.”

Then today I received the check. (Click on it to see it in high res)  The paper was simple and plain and the signature was a stamp, did not really look too secure.  Also the check that I asked for was just $750, this check was for about 3 times that amount.

 

 

 

 

 

Now, I looked up the routing number, and it really was for Chase.  I also called the company listed on the check, VertiFX Technology, but I got the run around there.  Tracked the package to find the origin, here is what I got.

Phoenix, AZ, United States 12/21/2011 12:51 P.M. Delivered
12/21/2011 10:01 A.M. Destination Scan
12/21/2011 7:17 A.M. Out For Delivery
12/21/2011 6:44 A.M. Adverse weather conditions.
12/21/2011 6:40 A.M. Arrival Scan
12/21/2011 4:17 A.M. Late airplane.
Louisville, KY, United States 12/21/2011 4:52 A.M. Departure Scan
12/21/2011 1:59 A.M. Arrival Scan
DFW Airport, TX, United States 12/20/2011 10:38 P.M. Departure Scan
12/20/2011 9:21 P.M. Arrival Scan
Fort Worth, TX, United States 12/20/2011 8:30 P.M. Departure Scan
12/20/2011 7:57 P.M. Pickup Scan
United States 12/20/2011 6:55 A.M. Order Processed: Ready for UPS

 

So the check for a California company came from Texas.  Very interesting. So I was 95% sure now that the check was a fraud.  I happen to have a Chase branch about a quarter mile from our office so I decided to go there and visit them.  Just as I suspected the account was closed recently, they would not say why but they decided that they would keep the check.  So it was all over….or was it….just an hour ago I got this email.

Hello Jason,
I just tracked the check, and it shows that it has been delivered to you today. I already got in touch with the movers today, and I need to pay them upfront for them to ship the laptops to your place, pick-up some other equipments for the office, and pick-up the laptops when you’re done, and that’s the reason for the extra cash on the check. So I need you to cash the check, deduct your repair fees,and go to a Western Union location to send the balance to the movers. Once they have it, the laptops will be delivered to your place to begin the repairs.
Send the balance to the information below:

Name:    Barry  S. Glick
Address:  6801 Otto Rd
City :       Glendale
State:      NY 11385

Deduct the sending fee from the balance and send the remaining to the information above. Get back to me as soon as possible with the Money Tracking Control Number (MTCN), and payment details (sender’s/receiver’s information) , as you have it on the receipt (I’ll appreciate it if you can scan the receipt to me).
Let me know.
Thanks.

So I replied,

I took the check to the bank and they said that it was bad.   Please just send me my amount by western union also.  That would work good.  They kept the check.

That was it.  I doubt I will hear back, but I wanted to blog about it so that Google will find these names and accounts and be able to help out others in the future.  Also I am thinking of calling Barry Glick, I bet he does not even know that he is part of a scam, I bet he is told to just go get money and keep 10% for his trouble and forward the rest, it is the way that these people keep out of trouble.  Other times they would tell the Barry guy to just use the money to buy stuff for them online, that way they get free stuff.  Lots of scams out there, so keep your eyes out.  So far they have tried it on me about 20 times, and I have not fallen for it yet.  Kind of a fun game really.

 

My planned speech on HB2677

Arizona, Business, Entrepreneurship, Government, Internet, Money, Politics, Real Estate, The World, , ,

On Wednesday the 16th I plan to go to the capital and speak about HB2677, here is what I plan to say.  If you read this and can think of something major to change please leave a comment.   This is my first time trying to change a law.  At the end I suggest a change to the bill that would actually result in the intent being accomplished, with almost no negative side effects and a few positive ones.  Here is what I plan to say.

Hello. I am Jason Dragon, I am an elected PC and State Committeeman in the Republican party. I am here to talk to you today about HB2677.

The intent of this bill is to find a way to tax people who are here illegally and use the money to build the border fence, but it fails miserably in both of these goals. I think that we do need to protect our border, and I am for building a fence but I am against this bill.

The first, and main reason that it fails is that it will tax everyone who sends money using a wire transfer service to any nation for any reason. The bill says that this is refundable, but it is only to the extent of a tax obligation. On top of the sender will need to wait up to a year so that they can file their taxes, and then they will need to keep records of these sends, and if needed will likely be required to provide these to the DOR. The majority of citizens in Arizona do not have an Arizona tax obligation due to many deductions or other credits and not enough income; all of these people will not receive a refund. In addition many other people and businesses may send money from Arizona who do not reside here, and thus will not be able to receive a tax credit.

Illegals don’t use these services. Existing state laws, designed to stop money laundering and criminal activity, already have strict ID requirements to send money using these services. They can not pass these ID requirements if they are here illegally unless they have very professionally forged documents, so the vast majority of illegal immigrants don’t send using the services this bill intends to tax. They often will hand the money a friend who can send.

As someone who has lived overseas, operated a business overseas and sends money overseas often I know that there are much easier and cheaper ways to send money than using wire transfers that this bill simply does not cover. Illegal’s and legal’s often also use these methods to send money. The most common way would be to open a bank account in the US and receive a debit card, or buy a PrePaid credit card and simply mail that card to your receiver in the foreign nation. Once they have it you simply deposit money into that account here in the US and the person in the other nation goes to an ATM and withdraws it. They also could choose to use the card at any major merchant for purchases. Because these are withdraws and not wire transfers they are not taxed. This does not even touch on the ability of people to simply mail a check or cash to a loved one overseas. Before this law even goes into effect I would bet that some smart company located in another state will offer a service where someone can send money to them and they would resend it overseas, and they only need to charge a fee slightly less than the tax charged by Arizona to get a lot of business.

The government is going to severely hamper these money transferring businesses, while other methods will prosper. The government should not be in the business of picking winners and losers.

This bill would also make our state even more business unfriendly. We would pass the burden of collecting and tracking this tax onto local businesses. We also would harm businesses that import, have overseas offices or overseas workers, taxing the money that they pay. I for one have freelance web programmers in a handful of nations in Asia, this would cost me more to pay them. I also send money every month supporting kids in Christian schools in Asia, this would cost me more to do that. I have already been contacted by missionaries who receive support from Arizona who are shocked by this bill and hope that it will not pass. I have figured that this bill would cost me about $800 per year if it passes, and the rate of 5%, as has been published in the media, would be charged.

And that leads me to the next major problem in this bill, the fact that the actual rate of the tax is not set, we should not leave ANY tax rate up to the discretion of some unelected director to decide. Where is the oversight?

Because of the complexity of international money and other existing laws this simply is not a workable bill, and it will never generate the funds needed to build a complete fence.

I don’t like to speak unless I have a solution to the problem. I have an idea of a way to amend this law to make it actually achieve the advertised goal without creating a new tax and by only targeting illegal aliens. Basically you would strike this text and replace it with text that would create a law enforcement activity, stating that during the course of law enforcement activity if someone other than a victim was discovered to be an illegal alien they would have their real and personal property confiscated. This property would then be auctioned off to generate funds to build the fence. Some protection would need to be put in there to make sure that property of a business or citizen is not swept up. You could even expand it to include people who apply for social services but are found to be here illegally. Then once the fence is built and a maintenance fund established, extra funds would go to help pay for education. Such a bill would likely be about as popular as SB1070 was. It would also function as a great deterrent to an illegal committing a crime or asking for social services in Arizona.

Thank you for your time.

My take on Arizona’s HB2677

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If you have not heard there is a house bill that was introduced that will dramatically raise the cost of sending money internationally.  It is called HB2677.  It will tax everyone who sends money internationally with the intent to build a fence between Arizona and Mexico.   The problem with this bill is that it is a large new TAX.  They are going to use it for one of the favorite causes of the tea party, to build a border fence, but let’s not get suckered into that.  The tea party is first and foremost an anti-tax group, even if they will use the money for one of our favorite causes.   It is just a bribe, and I am shocked and dismayed that the leaders of the tea party have gotten behind this new tax.

The major problem with the bill is that it taxes “Any entity” that sends money overseas.  That means that the next time there is a natural disaster in some faraway place Arizona will have their hand out, take money from the poor and hurting who are in crisis.  I have heard from some sources that they want a 5% fee on all transfers.  The typical fee right now is about $3.50 for the first $500.  This would add $25 to that fee, an outrageous amount.

Another problem is that it is easily circumvented.  People who are smart will avoid this law by setting up intermediaries.  An example would be that someone would set up an office in Nevada, and have their offices in Arizona collect the money, send it to Nevada and then it would be wired from Nevada to the receiver.  They would do this for a fee but it will be well less than 5%.  People are smart and this would really reduce the amount that is collected.

This bill is designed to build a wall between us and Mexico, so I would be FOR this bill if they restricted it to only personal remittances to Mexico.  They may even include Central American nations if they like, but adding this tax to everyone who sends to any location is way too broad.

The key to success for Arizona is to be free to do business and this bill puts a transaction tax on any money sent out of the country from Arizona. The bill does not state the rate of the tax but I know the fence will be costly so it will likely be at least a few %. Most importers have very slim margins and such an added cost will make them flee our state to go to ones that don’t have this cost.

This punishes people like me who want to do nice things and send money overseas. This bill will dramatically increase the current cost of sending money. Right now I use Wells Fargo for most sends and it only costs $3.50 no matter how much I send. Sometimes I use MoneyGram and they charge $10 for the first $500. Even a 3% tax on these transfers would take money and food out of the hands of the people I try to help.   I also send all of this money to either Asia or Europe, and that has very little to do with a fence between us and Mexico.

I would be for this if they changed it to state that it would only effect personal wire transfers going to Mexico, or even Mexico plus central and South America. But this idea of doing it for all business, charity and personal wire transfers for the entire world is a crazy dumb tax that should not be passed.  I am shocked that someone as conservative as Judy Burges would put her name on this totally unfair and punitive tax.

Jason Dragon

Peoria South Tea Party Leader

Area Coordinator, PC and SC in the Republican Party in LD9.

Business Owner, Importer and Entrepreneur.

ALERT: I just posted a follow up to this CLICK HERE!

The secrets of how to dispute things on your credit report.

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The quickest way to improve your credit is to work to remove things on your credit report that are negative.  This is not as hard as people think.  Before going forward, remember that is against the law to lie in any of the forms that you will sending to the credit reporting agencies.  But also remember that the law also says that an item in your report needs to be 100% correct for it to remain in your report; so even one small mistake in data is ground for deletion.  The problem is that the credit reporting industry make more money from someone who has poor credit, because they buy more reports, they try to fix their credit by many very expensive means and they try more often to get credit letting the credit companies to make money when they sell your reports to the companies you apply with.  They have many reasons to try to keep your report as negative as they can.

But the law is on your side.  Now here is the secret that I have seen presented at least twice at really high priced seminars presented by very successful multi-millionaires.  The law states that the info on your credit report MUST be 100% correct.  But there is a conflicting privacy law that forces them to redact most of your account information.  This turns account number 123456789 into xxxxxx789.  Because of the conflict of these two laws it has created a loophole that millionaires walk through.  It allows them to dispute that the information is not 100% correct and MUST be deleted.

They simply send a letter to the credit agency that says something like this.  “Hello my name is John Doe, and I am writing to clarify an item on my credit report.  My SSN is 111-11-1111.  You have listed an account with account number xxxxxx789.  This account number does not match the number that is on my statements from MegaBux Bank.  Because the information about this account is not accurate I ask that you remove it ASAP as the law requires.”    The credit agencies hate it when they receive a letter like this because they know that there is no way they can keep the item on your report.  The MAJOR problem with this tactic is that it totally removes the trade line, and many people have poor credit more because of a lack of trade lines than from negative information.  If you have a 6xx score and you have less than 12 trade lines, it would actually hurt you more to remove an item with a few 30 day late payment than it would to keep it on your report.   But if you are in the 7xx range and have 20 trade lines it will likely be much better to remove the trade line.  (On a side note, the reason most millionaires use this trick is not to remove negative items, they use it to remove mortgages on investment real estate, because many banks have a limit on how many mortgages you can have at one time…doing this makes them not show up on the credit report.  They still must declare them all in the application but for some reason banks look at the credit report more than the loan application and give the credit anyway.)

If you want to keep the trade line you often can change it to make it less negative by disputing minor issues with it.  What follows is a set of instructions on how to dispute your credit the way most people do it.  Start with this first, you may get 50% or more of your negative items changed to positive, which is much better than deleting them.

With this economy you need all the help you can get to fix the last few years, and I truly hope that this blog entry helped someone.  If this helps you please comment below.

Start the dispute process

You have every right to dispute inaccuracies in your credit report under the Fair Credit Reporting Act (FCRA), and the credit bureaus and your creditors are obligated to correct inaccurate information in a timely manner.

How to file a dispute

  1. Contact the creditor with the incorrect information
    • We’ve created a sample letter that you can use to start the process
    • Some creditors will correct minor errors over the phone, so we recommend that you contact the creditor first
    • Your list of creditors can be found in the Creditor Contact section of your credit report
  2. Contact the credit bureaus
    • Disputes may be sent to the credit reporting agencies online or in a letter:
    • Experian – Disputes are not accepted by telephone, but you may file a dispute online(link to Experian online form)
    • Equifax – Disputes are accepted online (link to EFX dispute page), or you use one of our sample letters and mail your dispute
    • Trans Union – Disputes are accepted online (link to TU dispute page), or use one of our sample letters and mail your dispute
    • Once the credit reporting agency receives your request, it has 30 days to investigate and provide a response to you in writing. During its investigation, the credit reporting agency will contact the institution that provided the disputed information to seek verification of its accuracy. If the disputed information cannot be verified, it must be removed from your credit report or updated per your request. Information that is verified as accurate may remain in your credit files for as long as allowed by law.
    • You may file more than one dispute at a time. You may also file disputes with more than one credit reporting agency. Each dispute will be investigated separately, but may be processed simultaneously.
  3. Follow up
    • If you have not received a response to your request after 30 days, write a letter to the credit reporting agency indicating that you have not been notified of the results.
    • We’ve created a sample letter that you can customize as necessary to explain your case. Print, sign and mail the letter to the appropriate credit reporting agency, keeping a copy for your records.
  4. Don’t give up
    • If upon receiving the results of the investigation you are still not satisfied, you may request information regarding the person or institution that supplied the information.
    • We’ve created a sample letter that you can customize to your needs and include any additional information necessary to explain your case. Print, sign and mail the letter to the appropriate address, keeping a copy for your records.
    • You may also wish to add a 100-word consumer statement to your credit file explaining the reason for the disputed information so potential creditors have the total picture.
  5. If you do not recognize information on your credit report and suspect that you may be a victim of identity theft, in addition to filing a dispute, we recommend you file an Identity Theft claim.

10 simple ways to save money in tough times, #9 Be more energy effecient

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#9 SAVE ENERGY

There are many ways to save energy and therefore money.  Some do a lot while others are more of a myth.

Time of Use plans

One of the best ways to save a lot of money is to select an energy plan for your house that fits your usage model.  When a utility makes electricity they do it in a few different ways.  Most power comes from what we call BASE power plants.  These are plants that are always on, day, night, 24/7.  Most of these are Coal and Nuclear.  This electricity is cheap and efficient.  Wind and solar energy are not really created under the control of the utility.  A utility tries to have enough base power to provide all the power that their customers need at least 80% of the time.  For the rest they turn to DEMAND power.  This is power that they can either buy or turn on as needed.  Hydroelectric is a great example.  These plants are mostly turned off during the night, but during the top of the demand time they could be at full force.  In addition power generated in cold climates can be sold to warmer clients during the summer and visa versa.

Because of the much higher cost of this DEMAND power electric companys want you to not use it, so they offer programs to encourage you to shift your usage to non peak times, and they also have programs to encourage you to use a more steady amount of power during these peak time.  So it is simple, here is in Arizona I have APS, and I use a program called Combined Advantage.  With this program I pay only 4 cents per kWh from 7pm until noon each day.  But from noon until 7pm on weekdays I pay 6 cents during the winter and 9 cents during the summer.  On top of that I have a demand fee of $13.40 per kW used during the highest 1 hour of usage during peak time.  What this means for me is that I can use almost as much power as I want from 7pm until Noon and pay almost nothing.  I just have to keep my usage down during the peak time.  I have been able to never go above 6kW during my peak hour.  By using this model I used 20% more power than last year but enjoyed bills over 30% LESS.  Last year I was on the 9pm until 9am program, but it had no Demand Charge.  I already had them look into how much it would cost if I was on the normal rate program and it would be over DOUBLE what I am paying now.   So change your plan and cut your power bill in half.

Space Heaters

Here in Arizona it does not get that cold.  We have found that it is not a good idea to heat the entire house.  When you heat with your large central heating system as much as half the heat you create escapes out of the unit itself or through the duct system.  Even if you have a very efficient Gas heater like I do it is still much cheaper to just heat the rooms you need, especially if you are on a time of use electrical plan and only use it during the off peak time.  When we stopped using the central heating system our gas bill went down by over $70 per month while our electric bill for the space heaters was only $10 more than the previous year.

Fans

Fans are another way to save money, a good ceiling fan will make you feel 5 degrees cooler than it actually is.  With a fan an 80 degree room will feel like 75 degrees and that fan costs just pennies a month to run.  Invest in ceiling fans and save money.  Another way to save is to have door and window fans to draw in the outside air during the times of day that it is cooler.

LCD Monitors

I am a computer guy so of course I need to talk about technology a bit.  An LCD monitor is much more efficient than the older CRT monitors, in fact the average 19″ CRT uses over 300W of power, while a LCD uses less than 25W, a HUGE difference.  If used 40 hours a week, at the normal power rates this adds up to about $9 per month per monitor.   With the cost of an LCD being about $120 that means that you would save about enough money in the first year to pay for the new monitor!  So why are you still reading this on an OLD CRT.

While we are talking about saving money with computers, modern computer use MUCH less power than older ones.  The NEW cpus use laptop technology to scale back power usage and use less power and less cooling.  A new computer could be faster while saving as much as $3-5 per month in electricity.  If you are like me and leave it on 24/7 that comes to more like $15-$20 per month.

Vehicle

Your car also uses power, in the form of Gas.  You can do all the normal things like Tune up your car, and keep your tires inflated and you will receive a good 20%+ boost in the amount of mile you can drive.  Of course you can also reduce unnecessary weight in your car, select routes that have fewer left turns but it turns out that one of the best things you can do is to NOT drive a steady speed.  Don’t accelerate too fast, I try to keep my RPMs under 4000 at all times.  It will use much less fuel if you accelerate for a time, then coast for a time, going back and forth, you could increase your MPG by 20% or more by doing this.

There are many more simple ways to save energy, many power companies will help you pay for an Energy Audit.  This is where an expert will come in, usually with a infrared camera, and look for cold or hot spots on your house where you leak energy.  Most energy is spent to heat of cool things so this is a real eyeopener.