Broken Compass

admin — Sun, 21 Feb 2010 17:25:44 +0000

Dear Yeti,
i feel like i have hit a wall. It comes in what seems every aspect of my life. I’m a teetering relationship guy, i don’t know if i want a woman or a woman’s comfort. Girls seem to take me for granted yet i’ve been told i too do the same when its a more serious relationship on my part. Continuing off of what i was saying before the other aspect are the roads i want to take in my career. I’m a full time college student (business), yet I’m debating if i want to join the air force to become a jet engine mechanic. On top of that i think maybe i should just change my major to psychology, finding it to be more suitable. All that or just doing what my family has told me I’m also good at; drawing, other forms of expression. Oh believe me and more… I’ve lived by doing what i love and what i think is right but i love a lot of things and these days who knows what’s right you know? just looking for some good places for advice or advice from yourself.

Thank you,
Impatient Me

Dear Impatient Me,

As I am writing this I’m thinking how to craft my response without giving you any real answer. But I just can’t help it. The answer: get an education.

Your relationships with women are still in front of you. You’re unsure about committing to any one partner yet because the right one hasn’t come along yet. Which is probably for the best. You’ll be better off in the long run if you compile a few more crazy girlfriend stories before you hang it all up.

If you’re focused on your career, it means that you take your potential very seriously. Being in business school is probably a good place to start. By the same token, a young man is not doing his part if he’s not chasing the next great adventure. The armed forces are a great way to seek discipline and explore the world. That being said, there’s good roads and bad roads leading into both these sunsets.

Just because some crew cut con artist at the Air Force recruitment center promises he’ll make you a jet mechanic doesn’t mean you are guaranteed anything. Entering the military without a college degree is a total crapshoot. I looked into it. The Army and Navy typically promote foreign born soldiers into their mechanic programs. There could be any number of reasons for this, but as I understand it, it’s a competitive position that you may not get. You could be sewing uniforms or peeling potatoes for 3 years. Sleeping your way through business school could be even worse. You could wake up one day working in the mailroom of some corporation trying to pay back 75K in student loans.

The point I’m trying to make is, it’s not just what you do – it’s how you do it. Get out a sheet or paper and write down your strengths and weaknesses. Think long and hard about what you want to accomplish. Form a plan. Set goals. Meet goals. Be successful.

Many successful business men own their own planes to tinker around on, and I’ve never meet a member of the military with student loans. Any road could be the right road. The world’s your oyster, Impatient. Before you know it you’ll be staring down your middle years and all these decisions will have made you who you are.

A Yeti

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College Credit Crunch

admin — Sun, 04 Oct 2009 05:53:33 +0000

Dear Yeti,
I am just about to graduate from college with a degree in finance from Grand Junction Co. I grew up in my mom’s house. She was a single parent and a teacher. Paying for school was difficult. She did all she can to help me through school but I have mostly been on my own since I started school.

In the past 5 years I have amassed a huge amount of credit card debt ever since the first day of my sophomore year when I signed up for a credit card just to get a free t-shirt. Over the last few summers I went and traveled a lot and bought a few too many things. I admit was totally careless with in spending habbits. My balance keeps growing, and my interest is almost $1,500 a year. I feel now that I will never be able to pay it off, plus I want to get married to my girlfriend of two years and she has no Idea what I’ve gotten myself into. What should I do?
Sincerely,
JD

Dear JD,

A degree in finance, really? You’re crazy for going into debt this badly at such a young age. I calculate based on your annual interest (I assume that your APR is extra sucky, between 15%-20%) which puts the over/under of your debt at around $7,000.

Actually, I am being way too rough on you. This problem is really common. There are more and more predatory lenders on college campuses every day. It’s not fair for foolish college students freshly out on their own to be subjected to this temptation. These credit card companies are like wolves to a carcass. Ten years ago you could count on there being several reasonable loan options in college communities but today you really need to read the fine print.

Tell your girlfriend/soon to be fiancée before this goes on any further. You know this is the right thing to do and I don’t have to tell you this. Keep in mind she’s going to find out sooner or later. If you tell her right now she may be more understanding when all your credit checks come back denied on your first apartment and when she sees how small her engagement ring is. Oh, and the real stinger is that she will be marrying you and your debt.

There are a lot of companies right now prepared to loan any and all college students thousands of dollars to spend frivolously. It is their business to get you to borrow money that you can’t pay back immediately. They know this and you don’t. It’s called predatory lending and it should be illegal but it’s not.

It’s the irony of your finance degree that really bothers me about your situation. The solution is obvious: pay it back. Set a goal. Making that minimum payment will not do it. In how many months do you want to pay back this debt? I think between 12 and 18 months is reasonable. Do the math what do you have left in your budget after: taxes, rent, car payments, insurance, and living expenses? Something like $150 a month probably. That’s not enough to pay it back in a reasonable amount of time: translation – “night/weekend job.” Also be creative. Do you know what nickname credit card companies have for people who do pay on time? They call them “dead beats” because they loan them money and never turn a profit. This means that you are a valued customer to their business. Now look at your history with them. Your opening APR was probably something like 9% which jumped up to something like 19% after you missed your first payment. This should also be illegal but the APR is at their discretion. Try calling them up on the phone and demanding as a valued customer that they back off their APR percentage. I’ve heard of this working and it couldn’t hurt.

Someday as a financial advisor (if you are lucky enough) you’ll be in charge of millions of dollars of other people’s money. Experiences like credit card debt help develop a stronger sense of responsibility with other people’s money. Growing up lower middle class in the United States and exposure to clothing, cars, and lifestyles that are just out of your reach can put young adults in situations like this. Work hard; learn your lesson and we won’t read about you being publicly lynched like all these financial advisors in the news every month. It’s this responsibility that they might have learned if they had to endure the humility and agony of getting into Citibank for $5,000 worth of fast food, cd’s and spring break vacations. With this in your rear-view mirror you’ll have a better understanding about the value of a dollar and your clients will thank you for it.

A Yeti

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Broken Compass

College Credit Crunch