‘Throw Them All Out’ – Scandal On Capitol Hill And My Visit With Author Peter Schweizer

Posted on November 22, 2011

By Rodney Anderson
One of the biggest scandals in American politics is blowing up as you read this: The inside game in Washington demonstrates, thanks to the book “Throw Them All Out,’’ that the political class enriches itself in ways we cannot, via a sort of “insider trading.’’ I visit with the author of the book, Stanford scholar Peter Schweizer, to get to the bottom of the scandal:
RODNEY: Give us the overview, here, Peter. We’re talking “legal graft’’ and “pay to play’’ and “soft corruption.’’ What is “soft corruption’’?

SCHWEIZER: “Soft corruption is basically the ability for Congress to engage in activities that are legal — but shoudn’t be. So for example, if you are a member of Congress and someone gives you $10,000 cash, that’s a bribe and one or both of you are going to jail. But if you give somebody access to IPO shares of stock, give them $100,000 worth of it in a day, that is completely legal, and my argument is that just wrong and the law needs to be changed.

RODNEY: So “insider trading’’ is illegal — unless you are a Senator or a Congressman?

SCHWEIZER: That’s exactly right. IPO shares are an example. Another is you can be sitting on a committee, you can hear from regulators, you can know from legislation that’s about to happen, you can know by a variety of means, the decisions coming down the pike that are going to affect companies. And you can trade on that information and it’s completely legal. But if you were a corporate executive trading on that information, you’d have serious problems.

RODNEY: There are so many cases in the book. People getting IPO shares. “Bundlers’’ who are involved in the Obama Administration. You trace John Kerry’s activities Politicians somehow making all the right choices on the stock market. People on Capitol Hill simultaneously making laws that influence the financial winners and losers and then winning themselves. Peter, would you find it funny that there is a North Texas Congressman who in 2008 has a personal worth of $24 million and suddenly in 2010 his financial statement shows him to be worth $49 million?

SCHWEIZER: It’s amazing when you look at the ability of Congressmen to accumulate wealth. They do outstrip the rest of us. In the last few years as the economy has teetered and tottered for everybody else, their net worth continues to rise. It’s a huge problem. Let’s face it: If they are outperforming the rest us on the stock market, which they do — they even outperformed hedge funds – and they are able to engage in land deals, whereby they buy a piece of land, secure an earmark to build a highway by it, and then turn around and sell it at twice the price, it’s little surprise they’re doing while when the rest of us are struggling.

RODNEY: Is there anybody on Capitol Hill who speaks out against this and don’t engage in this sort of financial cheating? Can’t they all be in a blind trust with their investments?

SCHWEIZER: There are some. There are some who choose not to trade stocks. But the reality is this is a non-issue for a lot of people, a go-along-to-get-along situation, just the way the business works. It goes in year after year after year. It’s legal graft so they are not breaking the law. There was something called STOCK Act, introduced before, which would make it illegal to trade on Capitol Hill. For years it had six sponsors, that was it. Since the book came out it’s now got 38 co-sponsors and it’s been introduced in the Senate for first time by Senator Scott Brown. That’s a very encouraging sign for me but only the beginning of what needs to be a very broad reform effort.

RODNEY: Peter, I’ve got an inside approach on this because I’ve been working on a bill myself in the U.S. Congress, The Medical Dept Responsibility Act. So the other night when you came on “60 Minutes,’’ it didn’t surprise me, but I know the public is outraged.

SCHWEIZER: The response has been tremendous, from the media, emails from people, and a lot of response on Capitol Hill. Some of the names I mention in the book, dozens of names, have fired back. Some of them have fired back and then suddenly joined the reform effort. We need to keep pounding away on this. The only way to get them to deal with any urgency is to make sure they can’t profit from their positions, to make sure they can’t exploit their positions.

RODNEY: Peter, I hold in my hand a document I assume you have seen. I have obtained a copy of the letter Congressman Spencer Bachus sent to your publisher, vehemently denying your charges. Others, Pelosi and the like, once they’ve come up for air, have also managed to respond. How you react to their charges against the book? Take Spencer Bachus. Is his criticism fair, or is he just trying to cover himself?

SCHWEIZER: He’s trying to cover himself. There are 40 options trades he conducted during the financial crisis of 2008. What he has challenged me on is that on four or five of those trades I have him shorting the market rather than going along on the market. In other words, betting it was going down rather than going up. I may be wrong on (those) but he’s not challenging me on the other 36 or so in which he took out positions that were highly-leveraged option trades, betting America would go down. He was making those bets when he was getting high-level briefings from the Fed chairman Ben Bernanke and Hank Paulson, the Treasury Secretary at the time.

RODNEY: Peter, the corruption is stunning. The cronyism is so disturbing. The book is incredibly important. Any bright ideas on how to solve this? Maybe along with, of course, to Throw Them All Out?

SCHWEIZER: The things I think we need to do:
No. 1, if you are on the Senate Banking Committee, you should not be trading bank stock. Period. There is too much conflict of interest. You have access to too much information. You will know more about the direction of the company than the CEO might.
The second thing is, members of Congress should not be getting access for so-called “friends-and-family’’ to IPO shares. It’s just another form of bribery.
And finally, we need to limit the ability of politicians to use their positions to sort of “shake down’’ businesses and other people. I suggest when Congress in session they should not be allowed to receive or solicit campaign contributions. Period. That would make it very difficult for them to seek favors from businesses, like IPO shares or campaign contributions or jobs for members of their family while they’re important legislation on the hill.
This needs to be about public service, not self-service. We need to limit their ability to turn politics into a business model to make money.

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Turn Out The Lights … And Avoid The Fates Of Bankrupt U.S. Cities

Posted on November 15, 2011

rodney wingman

By Rodney Anderson

There are socioeconomic truths. There are economic truths. There are American cities unplugging their street lights. There are American cities filing for bankruptcy. And then there is you … your money … and what you can do about it all.

Let’s go to Highland Park, Michigan. (No, not Highland Park, Texas; financially and geographically, the two towns aren’t even close.) In the small Michigan town, which 20 years ago boasted a population of 24,000 that is now halved, elected officials have unplugged their 1,000 streetlights.

Bulbs unscrewed. Poles tugged from the ground. Completely unplugged.

Why? Because Highland Park’s can no longer afford to provide basic services to its taxpaying citizens.

The town is $58 million in debt. Simply put, it cannot afford to pay its electric bill.

Can a small town like Highland Park, Michigan, be mismanaged by inept leaders?

Obviously. So what’s the excuse in Jefferson County, Alabama, home of Birmingham, which a few decades ago could boast of being the South’s No. 1 industrial city?

Jefferson County, Alabama, last week filed the biggest U.S. municipal bankruptcy in history because it is unable to settle on a deal for $3.1 billion in sewer bonds fell apart. The county listed debt of more than $1 billion in its Chapter 9 papers.

How does a larger city like Birmingham also find itself led by politicians who do not understand the essentials of finance?

The big-picture socioeconomics of Highland Park and Jefferson County are obvious and tragic. Those areas of the United States will become underbellies of society. They will become crime-ridden, because if you can’t pay for electricity, you eventually can’t pay for police. The same effect will take place when it comes to teachers, firemen and doctors.
Highland Park, Michigan and Jefferson County, Alabama will become ghost towns.

What does any of this have to do with you?

It’s a reminder of the importance of education – financial education. Our schools should be teaching more in their “money’’ classes than how to make out a check. “Home Economics’’ should be about economics, not about how to bake muffins. I don’t know that you personally can help Highland Park, Michigan or Jefferson County, Alabama. But you can help yourself.

Read “Credit 911.’’ (I promise you, the civic leaders of Highland Park, Michigan and Jefferson County, Alabama might be better off had they done so.) Understand my concept of a “Financial Day Off,’’ as seen here on WFAA Channel 8′s “Good Morning Texas.” Oh, and one more thing, relating to the civic leaders of our communities and our country: It’s time for all of us to get on our toes so we can put them on theirs.

I mentioned on my radio show for the last two weeks the coming controversy (or maybe “scandal’’ is a better word) regarding Washington politicians who essentially provide themselves with “inside information’’ in order to make money on the Stock Market and beyond.

This week I’ll write about that specifically, and discuss it in depth this Saturday. But for now … Educate yourself. Take a “Financial Day Off.’’ And prepare to put some of our so-called “leaders’’ on their toes.

 

 

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Five ‘Do The Do’s’ As You Refinance Your Home

Posted on November 7, 2011

By Rodney Anderson
Our prediction came true: Refinance rates are coming in lower and lower, and you are taking advantage! Refinance activity is higher than it was a year ago. Loan pricing inquiries jumped 14 percent from the week before. The Rodney Anderson offices are buzzing with activity as we help consumers find the best ways to save money, and really, to make money by refinancing.
Time is of the essence in this process, and we’d to help you handle that valuable asset – YOUR TIME – by getting you to “do the do’s’’ when it comes preparing yourself, intellectually, emotionally and financially – for your refinance application.
Here are Five Do The Do’s as you prepare to make the call at 1-800 EXPRESS:
1 DO assume your home’s value has dropped
Why does this represent a problem of sorts? Homeowners especially can be over-optimistic (even delusional) about home values. A recent study concluded that homeowners consistently overestimate the value of their property by 5 to 10 percent. If you bought at the height of the market, you are most likely to make this error.
There is a connection between you and your neighborhood. Look around you, at other sales, at foreclosures. Call 1-800 EXPRESS and we’ll help you find the true value of your home.
2 DO understand that your current lender isn’t your only lender
Not doing our homework is now the National Pastime (although baseball in North Texas has been a pretty fun National Pastime this fall!). You are not obligated in any way to limit yourself to refinancing with the present server on your account. In many cases, that server has no person who has an actual understanding or your loan or an actual understanding of your circumstances, your neighborhood, your finances, your home.
Beware of lenders who don’t return phone calls. Beware of lenders who want to “make it easy’’ and will therefore charge you more. There is a way to find a lender who is on your side in this process, and that begins with understanding that the bank that is your server doesn’t have to be your lender.
3 DO make your mortgage payments on time
I see it so often: A loan company sends you a postcard urging you to “miss two payments’’ and save thousands!
The truth is, if you goof up the timing of this supposed “break from paying,’’ it can mean big trouble for you. I urge you to make your payment on time each month until your refinance has closed. If you overpay your old lender, you aren’t “out’’ anything; the money will be returned to you.
4 DO get the credit cards paid off
Most lenders will pull a “no-score report’’ or a “soft pull’’ which does not show credit scores, but does show updated balances, payments made, and/or new accounts that have been recently opened.
If you are not paid up, or if you are out there opening up new cards, this report can kill a refinancing effort.
It may not seem fair, but it is reality: If you are in the middle of a refinancing, and you swing down to Home Depot and are persuaded to “save 10 dollars!’’ by opening up a new card, that 10 dollars could cost you thousands because it shows up as a blemish on your report.
I advise against this sort of “saving’’ in general, but let me make this clear: During this period, absolutely do not apply for new credit.
5 DO get your income – self-employment income and otherwise – straight
We all have a friend who always comes back from Vegas claiming to have “won” thousands. And he did win, say, on Saturday night … as long as nobody counts all he lost on Friday and Sunday.
When you are a business owner, you can tend to do the same thing. People sometimes count the revenue (their winning hands) while disregarding their expenses. They count their gross as their income. But no matter what you list on your refinance application, the lender is going to end up looking at the bottom line of your tax return. Understand how lenders evaluate your income. Be realistic and truthful …
And Do the Do’s.

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Forget Your Political Leanings And Play Obama’s HARP

Posted on November 1, 2011

By Rodney Anderson

Are you a Democrat? A Republican? A conservative? A liberal? Deeply involved or terribly disgruntled? This would be a great time to put aside our personal views and to consider a greater good for homeowners who don’t have equity in their houses but might be able to refinance nevertheless.
The Obama administration is revamping a program that’s designed to let more homeowners refinance their mortgages even if they don’t have any equity. This isn’t a new program … it’s an attempt to juice up an existing federal initiative called the Home Affordable Refinance Program, or “HARP.’’

And while of course it’s not a “silver bullet” solution to all of our problems, it’s a wholly positive move when it comes to housing and finances.

The Obama administration in 2009 rolled out HARP to refinance borrowers whose loans were backed by Fannie Mae and Freddie Mac and who were current on their payments. The idea is simple: If you were making your payments on time but didn’t have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance.

Initially, HARP was limited to borrowers who owed between 80% and 105% on the value of their homes. In mid-2009, the program was expanded and opened to borrowers who owed up to 125% of the value of their homes.

The lower rates have been available but have largely gone unused; fewer than 900,000 homeowners have refinanced under HARP over the past two-and-a-half years, and just 72,000 of those borrowers have loan-to-value ratios between 105% and 125%.

So here comes the revamping of a good program: Borrowers will soon be able to refinance no matter how far underwater they are.

We know this will be impactful in places like California and Florida, but it is applicable right here in Texas, too.

Of course, there are some guidelines here. Anyone who has already refinanced under HARP won’t be able to refinance again. You must be a homeowner with good credit and a history of making on-time payments. And most importantly, this works only if your loan is a Fannie or a Freddie. Most people don’t know if their loan is Fannie or Freddie or FHA or VA … and for the purposes of this program, that’s OK. It’s worth the quick phone call to a lender for consumers to find out that information.

I believe that this program will streamline the refinance process for those who are qualified, in part because it will eliminate the need in many cases for borrowers to obtain appraisals or to provide extensive income documentation. Instead, borrowers will have to show that they’re current on their mortgage, that they have a job or another source of regular income, and that they meet the other eligibility criteria for HARP.

These changes are scheduled to take effect around Nov. 15, and some banks have said that they could begin taking applications under the new program by as soon as Dec. 1. The HARP program will also be extended through 2013, beyond its current expiration date of June 2012, in order to encourage lenders to invest more resources into staffing up the program.

I’m excited about what this program can do for America; The Federal Housing Finance Agency estimates that another 800,000 to 1 million borrowers could refinance through HARP. And political affiliations aside, I’m excited about what it can do for you.

 

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When Is A ’4′ Not A ’4′? A Too-Good-To-Be-True Lesson

Posted on October 24, 2011

By Rodney Anderson

Does a four-percent mortgage rate sound too good to be true? Unless you are the right sort of borrower and unless you find the right sort of lender … it is. The inside scoop on when four percent isn’t four percent:

This much is beyond dispute: Interest rates in recent months have dipped to 50- and 60-year lows. Qualified homebuyers and refinance-minded homeowners are wise to call 1-800 EXPRESS right now to explore how you can take advantage of those rates.

This is also a fact: The average rate for a 30-year mortgage dropped below four percent earlier this month for the first time – all the way down to 3.94 percent, Freddie Mac reports.

However, at the same time, LendingTree reports that the average rate offered to borrowers by its network of lenders was about 4.32 percent.

So how does 3.94 become 4.32?

The fact is, only about nine percent of LendingTree borrowers got loans below four percent. About a third got loans between 4.5 percent and five percent. That’s still attractive, of course; but if you have a $200,000 mortgage, that half-point is worth about $700 a year in payments. So it’s a half-point that shouldn’t be ignored.

How to truly get the best rate? Make sure you qualify; the billboards that scream “Four Percent’’ don’t allow that rate for everybody. The lowest rates go to the buyers with flawless credit. (And those who put down greater amounts as down payments.) Also know that the points you pay factors into the rate you get. If you pay more in points to get the lower rate, it may not quite be the deal you thought it was.

And then know this: Everything isn’t quite as advertised.

Some of those ads screaming about low rates are designed to get customers in the door. The possibility of getting that low rate can draw in an avalanche of homeowners looking to refinance. And when the rush comes in, the lender can raise rates. In fact, some lenders are unable to handle the volume of calls they get … and they automatically raise their rates because they aren’t equipped or aren’t experienced enough to handle the volume. In our office, we hear some horror stories about how long it takes for some mortgage people to get a deal closed, or even to return a phone call.

The Rodney Anderson staff is ready to help now, to guide you so you can be certain that you are getting the right rate and the best rate and the most efficient service. I invite you to call 1-800 EXPRESS so we can offer you the very finest in rates, experience and service.

It’s good. It’s true.

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How Do So-Rich Athletes End Up So Broke?

Posted on October 21, 2011

By Rodney Anderson
At this moment, the world of pro sports is giving us so much enjoyment (go, Rangers!) and so much foolishness (c’mon, NBA!) Before our attention turns fully back to the World Series … According to a presentation made by the NBA players union to its own members a few years ago, 60 percent of NBA athletes are broke within five years of their post-basketball lives. This is newsworthy right now because of the NBA lockout … but it’s instructive for all of us as we try to handle our money wisely.
With guidance from an article on MintLife – and with my own personal experience dealing with professional athletes and their finances – we see the guys making the same mistakes over and over again. For instance:

*The ‘Keeping Up With The Joneses’ Mindset: You don’t have to be a millionaire to make this mistake; many of us do this despite much more modest incomes. This isn’t just about whether Scottie Pippen (who eventually filed for bankruptcy) needed his own corporate jet; this is also about whether you need the fancy gym membership or the custom wheels on your car or yet another pair of shoes. For most of us, being “glamorous’’ doesn’t pay off.
 *The Notion That Investments Must Be ‘Fun’ Or ‘Sexy’: In so many cases, athletes want to invest in something “cool.’’ They want their names on a restaurant, for instance. There is nothing sexy about a smart, conservative savings plan. But for most of us, that is the best option. And if we educate our young people as to the benefits of investing that way, they will have a lifetime of savings. An IRA that is opened in a person’s early 20’s might just look pretty “sexy’’ to him some 40 years later.
 *The Use Of Buddies For Advice: How many of us have given financial advice, legal advice, mortgage advise, to a friend or family member … even if we weren’t quite qualified to do so? Athletes frequently make this mistake, opting to lean on an old coach or some pal from the neighborhood to oversee their financial decisions. Especially true in their cases because they can afford the finest guidance: Seek out the finest guidance. For the rest of us? The Rodney Anderson office fields thousands of phone calls every month from families who need financial advice as it relates to home loans, insurance, refinancing and the like. I’ve got 27 years of experience and I am one phone call away at 1-800-EXPRESS.
 *The General Lack of Preparedness: OK, a pro athlete sometimes gets his first massive contract in his teens. He’s short on education and short on preparation and maybe those qualify as his excuses. But most American parents demand that their kids get A’s and B’s in school and yet despite our age and experience and educations, we don’t get A’s and B’s with our own finances. What’s our excuse?
MintLife lists an assortment of athletes who have gone bankrupt … A sampling:
*Lenny Dykstra, Baseball … Under $60 Million … among the alleged issues: Gambling.
*Mark Brunell, NFL … $60 million to $80 Million
*Kenny Anderson, NBA … $60 million to $80 Million
*Derrick Coleman, NBA … $80 Million to 100 Million … Spent most of his money improving Detroit neighborhoods and then came the decline in the real-estate marke there.
*Mike Tyson, Boxing … Over $100 Million
*Scott Pippen, NBA … Over $100 Million
*Antoine Walker, the ex-Dallas Mavericks player … Over $100 Million … Just signed to play in the D-League for the Idaho Stampede for $25,000 a year.

As one of those gossip magazines you see at the supermarket checkout stands likes to say, “The Stars Are Just Like Us! And they are in the sense that too often they fail to spend within their means, they fail to educate themselves about their money, and they fail to seek sound advice. When it comes to their homes, and to yours – the largest purchase most of us will ever make – please seek that sound advice and call us at 1-800 EXPRESS. Because in this area, you don’t want to be “just like them.’’

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How You Can Find Yourself Despite ‘The Lost Decade’

Posted on October 17, 2011

By Rodney Anderson

There is little sense in bemoaning the fact that home prices have dropped in the last few years – dropped so drastically that the Wall Street Journal is calling it “The Lost Decade.’’ There is, however, sense in learning from our recent history … and then working, as a homeowner, to benefit from it.

My Quick Six on the subject of The Lost Decade in home ownership:

1 The headline in the Wall Street Journal reads, “Home forecast calls for pain.’’ And it goes on to say that the “pain’’ might continue until 2015.

The lead paragraph from the story: “Economists, builders and mortgage analysts are predicting the weakened U.S. economy will depress housing prices for years, restraining consumer spending, pushing more homeowners into foreclosure and clouding prospects for a sustained recovery.’’

That is ugly in almost every way you look at it. Almost.

2 More hard numbers (and then I promise you, we’ll get a little bit rosier here): On a national basis, home prices are expected to drop 2.5 percent this year, and expected to rise just 1.1 percent annually through 2015. As it stands, prices have already fallen 31.6 percent from their 2005 peak.

As the No. 1 mortgage originator in the United States, I can speak to 2005 – which was definitely a “boom time’’ for housing. Additionally, I can speak to a potential recovery. And, most importantly, I can speak to what you as a consumer can do about it now.

3 The Journal suggests that consumer spending will see shrinkage. Consumer spending is, of course, the largest single driver of the U.S. economy. A certain level of frugality is understandable and it even shows wisdom: If you don’t have equity in your home, you aren’t motivated to be a spender.

As much as we all want dollars circulating, I am also such an advocate of increasing our financial education that I would encourage some level of frugality for those without equity in their homes.
 

4 Stat: One in five Americans with a mortgage owes more than their home is worth. This is a trend that should wake us up in regard to what our house represents. It’s no longer an “investment’’ as it once was … as I will explain in a moment.

Oh, how much equity is gone? The Journal says the number is $7 trillion. That’s $7 trillion of homeowners’ equity having been lost in the bust.

5 And … stat: Homeowners’ equity as a share of home values has fallen to 38.6 percent from where it was in 2005, at 59.7 percent.

6 So, how do we take all the hard, ugly statistics and make them work for us?

Know that in the last few months, interest rates are at 50- and 60-year lows. There has been a slight jump in recent days – all the more reason to lock in now, because once they are at 50-year lows, there’s really no reason to lose monthly money while you wait on the possibility of another drop.

And know this: For qualified buyers with fairly long-term plans, owning a home remains central to the security and well-being of a family. However, your home does not represent “security’’ in the form of an “investment’’ that figures to grow greatly. “The Lost Decade’’ has erased that reality, and you should erase that mindset. Home ownership is about “security’’ now because it represents a lifestyle, a choice as a place to seek comfort and to raise a family.

That’s the part of home ownership that will never be “lost.’’

 

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‘Doctor In The House’ Supports ‘Common Sense’ Medical Debt Responsibility Act Of 2011

Posted on October 6, 2011

By Rodney Anderson
As a successful family doctor and now as a United States Congressman serving his fifth term, Dr. Michael C. Burgess (R-TX26) has made a lifetime full of heroic decisions. Dr. Burgess is also uniquely qualified to make a decision regarding the Medical Debt Responsibility Act of 2011.
“I support the bill,’’ says Dr. Burgess, a co-sponsor of my bill that would clear paid medical debt off a citizen’s credit report in 45 days rather than seven years, thus allowing a qualified American access to credit. Previously, “I did not realize a demerit lingers (for years). … This makes a lot of sense, and it is common sense.’’
Dr. Burgess left his Denton-based practice shortly after being inspired by the tragedy of Sept. 11, 2001.
“It made me question my place in the world,’’ Dr. Burgess tells me. “I’m a doctor, probably helping people. … but at the same time, am I really changing anything? So 9/11 had a very profound effect on me.’’
Several months later, Dr. Burgess was sent by his constituents to Washington. Dr. Burgess, who served as an advisor in John McCain’s 2008 Presidential bid, is the author of the fine book “Doctor In The House,’’ in which he offers “Prescriptions’’ to solve our health-care woes. (See Dr. Burgess’ op-ed piece in the Washington Times this week to understand what a powerful and important voice he offers.)
And just as he has a solution to that problem due to his front-row seat in medicine and politics, I have the same. That’s why we’re so proud to have him as a co-sponsor on The Medical Debt Responsibility Act, a bipartisan bill that costs taxpayers nothing yet can fuel a resurgence in healthy credit, housing and jobs.
According to my research, 40 percent of consumers have at least one medical collection. The average person has been subjected to 4.8 medical collections. That average person has owed about $456. We know that the way people pay their medical bills, with all the complications and the mistakes – 20 percent of all claims include an error — is not reflective of the way people normal pay their bills. Most of us pay our bills every month in a timely, organized fashion. But medical debt collection is not timely and not organized.   And FICO discriminates against those who fight through the red tape to eventually pay their bill but continue to suffer years of consequence. American citizens shouldn’t have to pay the price for the disorganization. And with the support of people like Dr. Burgess and other thought leaders – and with the support of people like you — The Medical Debt Responsibility Act will pass.
Because of his medical background, Dr. Burgess has been a strong advocate for health care legislation aimed at reducing health care costs, improving choices, reforming liability laws to put the needs of patients first, and ensuring there are enough doctors in the public and private sector to care for America’s patients and veterans. He’s an important voice in our government and your support of this work is critical. Click here to find your Texas representatives, to tell us your medical debt story and to sign a petition of support. Please contact your elected officials in Washington and let them know that you agree with Dr. Burgess and with me and support The Medical Debt Responsibility Act.
“This makes a lot of sense,’’ Dr. Burgess says, “and it is common sense.’’

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The 5 Steps You Must Take Before Taking On A Business Partner

Posted on October 3, 2011

rodney wingmanBy Rodney Anderson

Are you ready to go into business for yourself? Are you ready to take on a business partner? You might just be … but only AFTER you follow my Five Steps To ‘Marrying’ A Business Partner:

1 Review their credit report

Your credit score is your financial DNA. If your partner has a poor credit score, you may be about to shoulder an unfair load. Are there bad habits here? Is there a bad history here? When it is time for your business to borrow money – a virtual inevitability – bad credit on the part of your partner might mean you don’t get the loan … or it might mean you have to take on the loan yourself. You deserve to know what you are getting into in this department.

2 Review public records for tax liens or judgments

These can be serious issues with long-term consequences … on the verge of being consequential to you. His or her tax liens might just become YOUR tax liens. Your partner should be ready to discuss your findings, just as you should be ready to discuss your own issues.

3 Have any co-signed debts disclosed

Co-signing for someone else seems like a lovely and generous gesture … until the bills don’t get paid. Assuming some other person is going to keep your credit clean is a huge and dangerous assumption. I generally urge you to avoid such involvement … and I strongly urge you to research your new partner’s history here. If he/she is on the hook for a co-signing, in another business or with a family member or whatever, you may be getting hooked in, too.

4 Elect a CFO

This is a first-step-level decision. Who is organized? Who has the time to commit? Who has the experience in this area? It’s a tough job; which partner has a necessarily tough attitude?

5 If your partner is divorced, check that decree line-by-line

Is this over-the-top? Not if you view your investment as important, substantial and worth keeping! Does your partner’s divorce give the ex-spouse any rights or power that could damage you and your investment? When you marry your business partner, you need to be fully aware of his previous partnerships and how they might affect you, your credit and your business.

There is a great deal of satisfaction in owning your own business, in being self-employed, and in building a business with a trusted partner. But the numbers show that 80 percent of new businesses fail in their first year of existence, and I know that following these Five Steps can help keep you out of that 80 percent.

As I address in even greater detail in my book Credit 911, your business partnership is, in so many ways, just like a marriage. Both partners need to know what they are getting into, and need to know that “love doesn’t conquer all’’ – unless along with that “love’’ there is full financial disclosure by all involved.

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Do You Have To Be A Jerk To Get Ahead?

Posted on September 28, 2011

By Rodney Anderson

A new study is out that, if you remove all the fancy talk, essentially says, “Jerks Make More Money Than Nice Guys.’’

Is this true?

Let me handle the fancy talk first: Men who are scientifically classified by a personality test as “highly disagreeable” tend to make roughly 18 percent more annually (an average of $9,700 more a year!) than men who scored as “most agreeable,’’ according to a paper in the Journal of Personality and Social Psychology.

The research combined the results of four long-term studies that sampled a total of 10,000 workers – so a pretty deep cross-section. Each study measured levels of “agreeableness,” from “most agreeable’’ (men who, for instance, value their relationships) to “disagreeable’’ (more aggressive types who seem largely interested in themselves).

And the findings: Not only are highly disagreeable guys paid more, according to the study, but also their “aggression’’ at work causes them to be viewed more positively. And then they get that raise.

Now to my personal findings, having been in the corporate workplace for 27 years, having dealt with executives and talent in the media world, having dealt with politicians in Washington on a one-to-one level:

There are cases when “the aggressor wins.’’ There are cases when the squeaky wheel gets the grease.

But are aggressors and squeaky wheels necessarily “jerks’’?

What’s that old saying about eliminating all doubt that you are a fool by opening your mouth? Just being assertive and vocal and squeaky isn’t enough to get ahead. “Getting noticed,’’ frankly, is a factor. But the Rodney Anderson staff conducts itself in a way that is modeled after something one of my mentors told me many years ago.

“Don’t worry so much about how much money you make,’’ my friend Mary once told me. “Concern yourself with how many people you help. And the rewards will take care of themselves.’’

I truly believe in that philosophy and it has served me and my clients well for 27 years. There might be some financial rewards in being a jerk. But there are greater rewards inconducting business and conducting friendships in another way.

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