Posted by Ryan on June 13th, 2008 in Credit and Debt

How many times have you dealt with bill collector harassment? Even when you are completely innocent and they clearly have the wrong person, they can be completely relentless. They’re rude, insulting and many times cross the line by breaking the law.

I found a way to beat bill collector harassment and get these people off your case. The details are found in the Credit Secrets Bible.

Bill collectors at times have made my life and just about everyone I know miserable at one point or another. They call you up at work and demand that you pay them for a debt that you’re really not even sure you owe. When you start to ask questions to understand the situation, they often become violently rude and are outright vulgar. They curse, threaten, lie or do whatever scare tactics they can come up with to make you pay. And there’s never any compassion or willingness to negotiate.

If you actually do owe the debt, the amount they come up with is usually inflated and can be two or three times the amount that you actually owe. How can they get away with this?

They usually do get away with it, but you don’t have to let them. First of all, as the consumer, you are protected by law. Even if you owe the money, the collector must treat you fairly and respect your privacy. The federal Fair Debt Collection Practices Act (FDCPA) sets the national standard for collection agencies, which explains that collectors cannot be deceptive, threaten to sue in order to get your money, suggest that you will be arrested, lie about the amount of money you owe, or say they will garnish wages if they can’t.

Why are Bill Collectors Harassing Me?

When a creditor does not receive their payment for several months, they sell the bad debt to a third party company, usually at a discount. The creditor gets some money, rather than a total loss, and the third party agency has an opportunity to collect the full debt and make a profit. Many times, though, they tack on loads of fees in order to make a substantial gain on the collection.
The collector now has a high interest in receiving the payment, which they are willing to get at all costs. However, often times they simply have the wrong person. The data they received from the original lender may be wrong, or they may have found you by doing a background search. It’s also common for these bad loans to be sold and resold to collection agencies several times over, and eventually mistakes are made or accurate information gets mixed with misinformation. Regardless, they usually go after you with no mercy.

What Should I Do?

First, do not ignore them. Even if the debt is not yours, you want to understand the situation and clear up the misunderstanding. It could be a case of identity theft, which means you may have more problems on your hands that you’ll need to tackle right away.

Always be the one in control of the conversation by asking the questions. Get names of the collector contacting you, the agency, the amount you owe, who you owe it to, and ask these questions several times to make sure their story does not change. Be sure to clearly ask what the amount you owe is, and the breakdown of the fees, interest or any other payments. Legally, the collector can not charge you more than the actual amount you owe.

Keep a file of every conversation you have regarding the claim, and keep track of names, dates and times of the call. Request every conversation to be followed up in writing, and you do have the right to ask them to stop calling and to handle business only in writing. You may even demand they stop contacting you entirely, in which case they can legally contact you one more time in writing to outline their plan of action.

What if the Bill is Not Mine?

Do not be fooled or threatened into paying a bill that is not yours just to get the creditor off your back. Any payment you make is acknowledgment that you owe the debt, which could lead to more trouble for you down the road.

The first step is to file a dispute by using one of the debt collection letters in the Credit Secrets Bible. After you file a dispute, the collection agency must stop collection efforts and conduct an investigation on their claim. They are required by law to validate the debt by obtaining verification from the original creditor.

If they are unable to validate the claim, ask for written confirmation that the collector is not holding you accountable for the debt. Even after properly disputing the claim with the collector, the debt could be sold to another collector down the road, and you want to have this formal documentation on hand in case the bill collector harassment comes back.

Millionaire Money Habit: If you owe the debt, get it settled so you can work on repairing your credit, but that does not mean you have to take the abuse of bill collector harassment. Make sure you understand the law and let them know you expect them to abide by it.

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Posted by Ryan on June 11th, 2008 in Investment Planning

The editor of Money Magazine recently wrote about Why We Flunked 401k, and mentioned some frightening statistics. In 2006, the median 401k balance was only $22,000.

This number is probably fairly skewed since there are 28% of eligible employees who don’t even bother to sign up for their 401k. And according to the Money article, 401k administrators say that many make investing errors when they do participate. They miscalculate their risk, don’t align their investment strategy with their goals, and make the same mistakes that every other investor makes (see 10 Mistakes Every Investor Makes).

Naturally, during tough economic times with uncertainty in the market, people make matters worse for their retirement future. Those without a balanced portfolio are likely seeing their retirement savings take a beating, and others may have stopped investing all together.

But it is times like these when a balanced portfolio is most important. It will limit your losses and protect your investment. When there is uncertainty in the market, it is an opportune time increase your contributions and take advantage of discount stock prices. As Warren Buffett says, “be fearful when others are greedy, and greedy when others are fearful.”
It seems counter-intuitive to invest when the market is performing poorly, but it may be the opportunity in your life to get rich. It’s interesting that when stocks hit an all-time high, everyone rushes to get in the market and become an expert at picking stocks. However, all they did was buy when things were most expensive.

Getting past the head game when investing is not easy, but it is essential if you want to build wealth. If you’re not contributing to your retirement plan, or have decreased your contributions because of the current market conditions, sit down and really think about your goals.

• When do you want to retire?
• How much will you need?
• How will you get there?

Today and tomorrow’s market conditions should not affect your investment decisions. Throughout a lifetime there will be many ups and downs, and the downs give you the opportunity to accelerate your wealth.

Millionaire Money Habits: Remind yourself why you are investing, your investment strategy and your goals, and let that determine how you are contributing to your retirement plan. A $22,000 401k balance won’t get you there, so start regularly stashing away more money so you can retire early and retire well.

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Posted by Ryan on June 9th, 2008 in Investment Planning

Millionaire Money Habits newsletter subscribers received a free copy of 10 Mistakes Every Investor Makes and How to Avoid Them. Warren Buffett teaches that making money in the stock market isn’t about how much you make on an investment, it’s how much you can avoid losing. During volatile times like these, Warren Buffett’s philosophy is more important than ever before.

How long has it taken you to build your retirement account to where it is today, and how many sacrifices have you made to make those contributions? Double check that you are not making some of these common mistakes that could be draining your hard earned retirement account.

Not Investing: The annual performance of the market is highly relied upon just a few top performing days. You can’t afford to not be “in” the market and miss those days, and studies have proven that you cannot time the market.

If you haven’t started investing, it’s important to get going as soon as possible. Decades of appreciation on your portfolio will produce enormous wealth, and time is the stock investor’s best friend. Being a long-term investor is a guaranteed way to become a millionaire, as it allows you to take advantage of the greatest wealth creating formula (see The Power of Compound Interest).

Not Taking Enough Risk: Being a saver will not get you anywhere. Even high-yield savings account and other fixed-income investments cannot keep up with inflation at today’s rates. That means you’re actually losing money by playing it safe with bonds and CDs. If this is where you are keeping your money, it is certain to under-perform.
Why settle for 3% or lower in investment returns when the stock market returns around 10% over a 10-year period? If you have a long way to go before retirement, take on more risk by adding more small-cap and international investments. In the short term they are more volatile than large-cap stocks, but they can produce exceptional returns.

Ignoring Taxes and Fees: Do you know how much you are paying for your mutual fund fees? How about the cost to purchase and sell your investments? Are you giving 35% of your profits to the tax man due to short-term capital gains? After all is said and done you may have lost money even if you portfolio had a stellar performance. Minimize your fees by using Zecco’s free-stock trading platform and investing in low-cost mutual funds.

Emotional Investing: How often are your investment decisions made by thinking “what if it goes lower,” or “maybe I shouldn’t sell . . . what if it goes higher?” Always have an investment plan and know what are willing to lose. Don’t let the media and “the crowd” influences your investment decisions. In fact, you may be better off doing the opposite. The masses are almost always wrong.

Are you making some of the other biggest investment mistakes? Download 10 Mistakes Every Investor Makes and How to Avoid Them for free by subscribing to the Millionaire Money Habits Newsletter.

Millionaire Money Habit: Investing mistakes are easy to make and overlook. Double check that you are not hurting the performance of your portfolio and learn how to avoid the 10 most common investing mistakes by signing up for the newsletter.

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