Archives for December 2010

Silence. It’s just good business.

December 23, 2010
Tenant with eviction notice

How bad is our tenant? This is an interview with our prospective new tenants, a family of Gypsy bear herders

The Control Your Cash authors own an office building. In a couple of weeks, the tenant is supposed to start the 3rd and final year of the lease. It calls for a fixed annual rent increase.

The tenant was late with the rent once before. That time, the good-cop author waived the 10% late fee after listening to an excuse from the tenant’s octogenarian chief financial officer. The good-cop author stressed that this would be a one-time-only thing.

A few weeks ago, the tenant asked that the rent not go up next year. He offered nothing in return, he just hoped he’d get $6000 by asking for it. Maybe he thought he had leverage – the building’s been half-empty for some time, leading him to believe it’s a renter’s market. Perhaps, but a contract is a contract.

We refused, and December’s check never arrived. The bad-cop author left a polite and unambiguous voicemail with the boss and spoke with the CFO, who refused to give a straight answer to the complex and nuanced question, “Did you send a check?”

The tenant himself called the good-cop author a few minutes later, claiming that the bad cop threatened and disparaged the CFO (he didn’t.) The tenant added gratuitous lies, such as “the CFO thought he meant January’s rent.” The bad cop overheard this, grabbed the phone, stated his position, and the tenant started spewing profanities and, swear to God, asked if anyone would be interested in “tak(ing) it outside.”

Indisputable conclusions:

-in Western society, the standard strategy for requesting a favor involves groveling and pretending to like the person who can dispense the favor. Berating and threatening are almost never part of that strategy. Therefore,
-the tenant has no intention of sticking around past December.

Additional points: the tenant opted to communicate exclusively via text from that point, and exclusively with the good cop. In fact, one of the texts stated that the bad cop “is not to contact us anymore.” Yes, the delinquent tenant is making demands while stealing office space.

Also, the tenant stated that he’d refuse to pay the 10% late fee. He asked the good cop if she really wanted to “destroy this business relationship” and if she’d want to “lawyer up” in lieu of caving into all the tenant’s demands. These would include, apparently, refusing to pay the current month’s rent. Nowhere in his diatribe was there a word about where December’s rent check is.

In the later chapters of Control Your Cash: Making Money Make Sense (available at Amazon and Barnes & Noble), we argue that if you’re going to invest in houses and rent them out, hire a property manager and pay her 10% to assume control of your headaches. Commercial property doesn’t typically work that way, and shouldn’t, but we at least weighed the benefits of hiring a property manager while dealing with this idiot tenant.

We didn’t get mad. We sent a cold and impersonal email to an eviction company and hired them. They charge $200 to put a notice on the door telling the renter he has 10 days to pay the balance (which just got $200 larger) or get out. The renter would still be legally obligated for not only December’s rent, but the remaining year on the lease. The security deposit we initially collected covers only a small part of that.

So he started using intermediaries. We got a call from the broker who originally engineered the deal, a quasi-friend with no dog in this fight. This is the equivalent of having an argument with your significant other and placing a call to the person who introduced you. We didn’t bother calling back the broker who, to her credit, had only two things to ask the renter: What am I supposed to do about this? and Did you pay your rent?

Then yesterday, a voicemail from someone we’d never heard of. Another real estate broker, but one who talked as though she was representing the tenant in court (“Mr. Smith really wants to pay the rent, and hopes both parties can agree to a mutually beneficial solution.”)

Huh?

If the tenant’s talking to other brokers, he clearly wants out of his lease. Which we’d grant, as soon as he cuts a $70,000 check for the entire remainder of the term. His threats to “lawyer up” notwithstanding, his would be one of the weakest cases in the history of jurisprudence. And why the tenant chose an intermediary whose very identity shows his hand made no sense at all.

The point of all this is manifold for people who want to make money by selling their goods and services to others (which is the only ethical way to do it):

a. If you’re going to be in a position where people can potentially owe you thousands, you need a written contract. (We did.)

b. When previously semi-reasonable vendors/customers/clients/tenants start acting irrationally, sever the relationship before they have a chance to. At least then you’re in control. Even if this tenant had never been late with the rent, why extend the lease of someone so bellicose? Let alone give him a price break.

c. STAY EMOTIONLESS. Take feelings into account in your personal relationships, not your professional ones. If you don’t, you will stay as poor as someone who buys lottery tickets and puts them on her credit card. Crap, this idea is so profound that it should have been a chapter in the book.

We could have made forceful but non-threatening calls to the tenant. We could have shown up (tempting, given his offer of a fight). We could have done what most people in these situations do, which is engage in unproductive conversations that don’t change anything (“When are you going to pay the rent?” “What do you mean you’re not going to pay the late fee?”, et al.) As if he’s going to give worthwhile answers.

Instead, put the phone down and don’t answer his calls (or any intermediaries’.) Because unless he says “here’s a cashier’s check for the full amount”, which he won’t, there’s nothing to talk about and anything beyond that is a waste of time. Hiring a pro and having the law on your side (plus a personal guarantee, agreed to at the start of the lease) makes life a lot less hectic.

**This post is featured in 2011’s First Carnival of Money Stories**

**This popular post is also featured in the Carnival of Wealth #19**

Filed Under: Bad Examples, Estate Planning, Finance, Investments, Rental Property Tagged With: , , ,

10 Tips for Writing a Personal Finance Blog Post

December 20, 2010
Misspelled wrist tattoo

A misspelled wrist tattoo will greatly reduce the chances of your law firm making you a partner

Start by giving it an easily digestible title, preferably one that features a particular number of ways of doing something.

Then, drop in a lazy reference to Google and the number of hits it returned regarding a key phrase from your blog post. That’ll make people marvel at how many others from around the world are presumably thinking about the topic you’re writing about. Did you know that the phrase “the topic you’re writing about” returns 427,000 results?

(By the way, that’s a gigantic lie. Now, if you type in that phrase in quotes, Google’s first page will indeed attest to that many results. However, if you click through them all, hitting the “next” page on the bottom right corner and going through 10 pages of results at a time, you’ll find that the number of results Google initially estimates and the number it returns differ exponentially. This goes for almost any search term. In this case, Google really returns only 282 results, no more than 278 of which are unique.)

Now that that’s out of the way, talk down to your readers as best you can. Whatever you do, convey as little worthwhile information as possible. State the obvious, and don’t even bother to dress it up in original or unorthodox prose. We read one recent entry from a prolific cross-poster who opened a post on life insurance with the sentence “I don’t like to think of my husband dying unexpectedly.” She wasn’t going for humor, either. She was as earnest as the Pope conducting Easter Mass. You see, because her husband is someone whose company she enjoys, and whom she therefore wants to live, i.e. not die.

Use exclamation points to show readers where the funny parts are!

Shoehorn your own experiences into the post, regardless or how relevant they are. Even better, if you can find an instance or two from your personal life that somehow illustrates the bad habits you don’t want your readers to exhibit, and you’re not even self-aware enough to make the connection – well, then you’re close to striking gold. Something like this:

Now, I never gamble. Well, once in a while I go to Vegas with friends, but only for a few days at a time and we only play the slots – none of those complicated card and wheel games! Besides, it’s not like we’re there just for the purpose of wasting money. On most of those trips we go primarily to drink as much as we can, pay for bottle service at clubs and maybe buy some cigars. That’s just me and my friends, though. I certainly can’t tell you what to do. A little moderation is good, though, if you’re looking for rationalization and for a bromide from a person who clearly can’t form an independent thought and is reduced to only speaking in clichés and catchphrases.

Another critical maneuver that separates the award-winning blog post from the merely unreadable one is sloppy editing. Whatever you do ,ensure that you’re punctuasion marks conflict with standerd usage. Spell however you feel like speling, too. Youve got content to create! Your not some english professer of something. Most importantly   screw up you’re homonyms. Their to vital too get correct.

Another thing to remember when writing a personal finance blog post is to be as stilted as possible. When you write with the awkwardness of a middle school student, i.e. someone between the ages of 11 and 14, who goes to school, your writing will achieve a level of dry lifelessness that exudes from the page. Or more precisely, a level of dry lifelessness will be achieved by your writing. When the passive voice is used by you, that sentences pile on top of one another instead of flowing will be noticed by your readers, especially if you think a comma is interchangeable with a period and a run-on sentence is as easily read as a series of sentences. This type of writing is preferred by attorneys and politicians, and thus is indicative of a highly cultured brain. Speaking directly is to be discouraged.

Even if you’re going to use the active voice, never ever cut. Always leave every word in. Don’t remove anything you’ve written. Even if you conveyed an identical thought in a nearby sentence.  Don’t write conversationally, if you can help it. Using “needs” as a noun is just one way of showing that you’re far too bright to communicate in everyday parlance. Why tell people to buy the cell phone with the right tradeoff between features and price when you can tell them to get the one that best suits their communication needs? Better yet, tell them to get the one that provides the best overall phone experience. Or that specializes in phone solutions. If you can work “needs”, “experience”, “solutions” and “going (or moving) forward” into the same sentence, move to the advanced class.

Finally, elicit feedback cheaply with a series of open-ended questions that summarize your post’s content. Use boldface and italics if at all possible.

Do you think these are legitimate tips for writing an uninspired blog post? Do you have tips of your own you could share?

Filed Under: Bad Examples, Book Promotion, Making Smart Choices Tagged With: , , , ,

GUEST POST: 6 Habits Of A Frugal Shopper

December 16, 2010

Every week, we get solicitations for guest posts. 99% of them are dreadful. Some are even belligerent. None of them are from someone who’s actually been to our site.

Until now. Mr Credit Card runs Ask Mr Credit Card, and has good opinions. By which we mean he largely agrees with us, which makes sense, because our opinions are rooted in truth.  We assume he’s a Brit, given that he doesn’t punctuate “Mr.” He also writes in the third person, like us…er, like the Control Your Cash authors. Anyhow, take it away, Mr Credit Card:

Today, Mr Credit Card is going to highlight some habits of a frugal shopper. Though he reviews and recommends the best credit cards, he also believes that unless you are frugal and pay all your bills on time and carry no debt, you have no business carrying a credit card. Here are some of his tips to pay less than “full retail” prices.

Everybody loves a good deal. But we shouldn’t buy stuff just because we can get a good deal or there’s a sale going on. Instead, we should only buy things we really need. But even then, you should always find ways to pay “below retail”.

1. Ignore the “original price” I can’t stand how most stores mark down prices. The big department stores are the worst here as they will always show an original price or a Manufacturer’s Suggested Retail Price that is much, much higher than the lowest price. Often I see 3 or even 4 prices, suggesting that it’s marked down several times. Who cares? Do you know what you can do with your “suggestions”? The only price that counts is the price you pay.

(Ed. Note: Any man who’s taken part in the following useless conversation, raise your hand: Q: “Honey, how much did that cost?”  A: “I got it on sale.”)

2. Always Compare Prices Just because an item is marked down, that doesn’t mean it’s even a good deal. I found what I thought was a good deal on Amazon the other day. No other retailer I searched for had this cordless phone system at a lower price after tax and shipping. Even eBay was a bust. The next day, I found the phone system in Costco for almost half of what Amazon was selling it for. Research all your major purchases. This was the exception, as I usually find lower prices at Amazon or eBay than most retail stores, but you never really know. EBay

(Ed. Note: How do you capitalize “eBay”, assuming you do, when it starts a sentence? Curse this stupid phenomenon of brand names that start with lowercase letters and have medial capitals.)

is especially good for low-price, highly-marked up items like computer and electronic cables and accessories. I can always find a cell phone recharger for $5 that costs $20 at the dealer.

3. Always Ignore Credit Card Rewards Credit cards rewards are great, but only if you pay off your balance in full every month. Even then, you can still be tempted to spend more. One of the funnier lines in a movie I once saw was when the ditzy teenager was questioned as to whether her parents mind her spending so much on her credit card. She replies, “So what, they’re getting frequent flier miles.” That statement perfectly encapsulates the entire premise of reward cards. The idea is to get you to spend more in order to earn your reward, which is usually worth 2% or less than your purchase. If you can’t understand why this is a bad idea, you should never, ever have a reward card.

(Ed. Note: Full disclosure, your regular blogger has an American Express HiltonHHonors card. Only because it had no annual fee and I stayed in Hilton hotels a few times a month anyway. The card gives me free hotel stays without giving me incentive to change my behavior: if I don’t have enough points for a free stay at the $89 Hilton Garden Inn while the Holiday Inn Express across the street is renting rooms for $79, you can probably figure out where I’ll stay.)

4. Pinch Twenties, Not Pennies I suppose if you have unlimited time on your hands, you can make a career out of clipping coupons. In fact, there seem to be people who do just that. For the rest of us with a job and/or a life, you have to prioritize where you save money. Go for the big scores. Spend your time and effort saving on big things.

5. Make Sure You Are Not Just “Saving Money” On Something You Really Don’t Need The whole idea behind coupons is not to let you spend less, but to make you spend more. When you see a coupon for some product, ask yourself if it was something that you were going to purchase anyway. If it was, great. If not, forget it. Ask yourself if there aren’t less expensive alternatives. Perhaps you can get the same item for less on eBay or Craig’s List?

6. Always Compare Total Prices We live in a world with little price transparency. Book a rental car if you want to see how your bill quickly becomes twice the price of the rental itself. Telecommunications companies are close behind with all of their tax recovery charges. Hey, I pay taxes too! Can I subtract a “tax recovery fee” from your bill? Even a straightforward online purchase might include tax and shipping.

Filed Under: Consumer Debt, Credit Cards, Economics, Net Worth, Shopping Tagged With: , , , , ,
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