I'd like to talk about Debt

I was watching a commercial for one of those debt consolidation services, and I began to think, "This service shouldn't even have to exist," The amount of unnecessary debt out there sickens me. I understand taking out a loan to pay for a house, or car, but when people go into debt on their credit cards, well that's just sickening.

Based on what I hear from these commercials, 6 out of 10 Americans are in some sort of debt. There are somewhere around 40 million Americans under the age of 19 (US Census 2000) so if our population is around 300 million, that means 260 million Americans are of legal age to own a credit card and take out a loan. 260,000,000 x 0.6 = 156,000,000 Americans in debt...approximately. If you ask me, this is 100% unacceptable. If you can't afford the new shoes that are $80...DON'T BUY THEM! I know this could weaken our consumer economy, but we can survive it.

What is the point of owning someone money? So you can owe them more money? With the rates on credit cards rising to near extortion levels, why would you want to owe someone money. If you have a 12% credit card (college student cards can rise to near 30%) then using the rule of 72, in 6 years, your debt will double. That sounds like a long time, but so many people are simply sitting on their debt, and allowing this to happen. It's a record boom for the Credit Card industries, the only loan industry that's hurting right now is the Home Mortgage industry (and it is hurting BAD)

American Express made $3.7 Billion last year. Some of that profit comes from charges retailers incur when you make a purchase with your AmEx, but a lot of that is probably finance charges and fees. MasterCard made $3.3 Billion last year for many of the same reasons. Discover is sitting pretty at $561 Million for...you guessed it, the same reason. Do you realize that when you don't pay a credit card in full, you are simply giving up your money for a frivolous purchase?

Now, let's set some things straight, I don't dislike credit cards, I think they're great; they can give you an advance when you don't have your cash yet, and the rewards can be great. The issue people run in to is simply paying the minimum each month. The credit card companies would like you to do no more than simply pay the minimum each month; that is their optimal customer. Why? Because you will rack up finance charges like crazy. For the rewards alone, credit cards are worth it, airline miles, cash back on Discover, hotel rewards, but in order to get these rewards, you will have a higher APY, which means higher finance charges, which means it costs more to buy things than it should. I pay EVERY credit card I have in full every month, and I have NEVER had to pay more than anything is worth.

This takes a little more work than simply buying on a whim and worrying about it later, but it saves a lot of money too. I spend around $400 a month on my credit cards probably. If I simply paid the minimums, that would be $325 a month that gets charged. With an Average Daily balance, and an APR of 12,%, that comes out to 325(1+.033)^30 = 358.76 for the first month. After the second month, with another $325 of purchases, it comes out to $754.80. I am now paying $904.80 total on only $800 worth of stuff. Do you see how much difference paying off your cards in full makes?

The ultimate idea to take away from this is: If you don't have the money to spend...DON'T SPEND IT. Our country spends more money than it makes, which means someone has 6 out of 10 of us by the balls. Don't overspend. Don't go into debt, and don't overindulge. It's simple common sense.

I didn't even get into our national debt, which is ultimately a good thing, just not at it's current levels. I'll talk about that at a later date.

As always, comments are greatly appreciated. If you're reading this on the imported facebook note, you can see my full blog at www.dormroombiz.com


I have my auction still up on e-Bay, if you are interested at all, view the auction.

You can view the image by going here. If you mention that you went there from my blog, get $2.00 off shipping!!!

Again, just click here to see the item.

If those links didn't work, copy the following URL into your address bar and hit enter.
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=290200159125

Products online now!!!

I've now got some products online. Admittedly this is not a huge product line, but it's a start, and hopefully it will motivate me to start doing more to get stuff online.

I put my 5 photo holder online, on e-Bay, but online nonetheless.

You can see it here! 5 Photo holder

I would really appreciate anyone who would look at it. This really is a great product, and I use multiple copies of this product, I think it is absolutely great! I can hang tons of photos on the wall without having to buy frames or stick the photos directly on the wall like I did last year.

I have developed a website that I hope to have up and running by the end of the month.

Well, that's enough of that.

I'm really sorry I haven't been posting lately. I have decided that from now on, this blog will be more dedicated to business in general, instead of just business in dorm rooms. I think this is a better, broader topic, and brings me out of my myopic focus. I simply didn't have much to post blogs about, since I haven't been developing my business lately. I hope this will change.

I've purchased a few books and gotten some from Christmas that I hope will be really great. I have

• The Book of the Five Rings by Miyamoto Musashi
• The Book of Family Traditions by Yagyu Munenori
• The Art of War by Sun Tzu
• The World is Flat by Thomas Friedman
• The Art of Seduction by Robert Greene

These are all meant to help with business, The first 3 are more about battle, and business at a higher level. The world is flat is the new bible in business it seems. Every class talks about this book sometimes. The Art of Seduction is supposed to help with sales, however, I don't think I'll read this in public, that could look kind of embarrassing. I'll go ahead and stay in my room when I read that one.

I got thinking about the role of these books. I have read a few books based on business in the past couple years, and they really are much better than any classes I've taken (with the exception of my International and Comparative Dimensions of Business class). Why do people choose not to read these books. There is a definite edge in the business world based on knowledge. When someone knows more about the business world and can react faster, there is undoubtedly an edge, and I don't think anyone would doubt that.

"It's not what you know, it's who you know!"

That could not possibly be true, it is important to have connections, but unless you're just going to work a nothing job for a relative, your connections can only get you in the door. Please don't get me wrong, connections in business are important, because you DO need to get in the door, but that's as far as they will go. Without the ability to impress an interviewer, and the knowledge to excel at your particular job, you will not last long. Just remember, you do need to know something about business, and economics, and psychology, and how to work with people, and many other things. Your dad's a CEO? Well you better know something about that business to get a job with him, because if you don't, a good CEO will fire you without hesitation.

I get so sick of people relying only on their connections in business for jobs. No one cares if you know more executives than they do, you can only get an interview with your connections, so go to class, stop wasting your opportunities in life. If you're in school studying business, YOU'VE DONE SOMETHING RIGHT! Don't let the seat in your class go to waste. That fact goes for everyone really.

Anyway, that's enough of a rant.

I watched the Detroit Auto show today, quick review: My award for coolest car goes to the Audi R8 (look it up)