I commented on Baker’s post that I was surprised that Discover waited that long to contact them.  (Perhaps they didn’t wait at all regardless.)

Businesses owe your heirs no special consideration

My grandfather died a few years ago.  It was very shortly afterwards that the agent for his homeowner’s insurance policy called my mother to inform her that the premiums would increase because it was now a vacant home.  My mother gave the agent an earful (she had grown up with him), saying that he had been a good customer for decades and that they were canning his policy before he was ground temperature.  The agent gave her a sympathetic ear, but the risk to the property does go up if no one is living there, and hence the premiums should go up.

Business relationships are just that: business.  It’s nothing personal.  And that’s just why situations like what Ms. Townley experiences leave a bad taste in people’s mouths:  there sometimes is almost no personal touch that’s expressed.

But when a customer outcome (how’s that for a business euphemism!) severs the relationship with the business, it would be unwise for the business to continue on as if nothing had happened.  In the case of my grandfather’s insurance company, they’d be taking a risk that’s not adequately compensated for the premium.  In the case of banks seeking to settle credit accounts with the heirs of deceased cardholders, they only have a short window anyway to recoup anything at all.  If they wait around until the heirs have grieved, then (a) the heirs still won’t want to pay the deceased’s credit card bills and (b) there may be no money left in the estate to pay them with anyway.  It’s the quick creditors that get their money, not the considerate ones.

It’s a matter of legacy and preparation

To be fair, I’ve been caught on the receiving end of “businesses just taking care of business” (though thankfully I haven’t had to deal full bore with a death in the family yet).  Even the act of changing your address disrupts things.  I’ve missed bills, missed deadlines, and gotten nastygrams because I didn’t update my address with everyone I did business with.  Businesses didn’t really care that I had other stuff going on when I moved.  All they cared about was their business.  And frankly, that’s how it should be.

So, I’ve gotten better at preparing for things that might disrupt payments, cause cancellation of services, or otherwise be inconvenient.  Businesses expect me to pay my bills.

Likewise, when the ultimate disruption comes (death) how I’ve prepared my estate and finances will reflect on my legacy.  If I have things in order, my heirs will indeed have time to grieve, rejoice, whatever.   If I don’t, then it will be a nightmare for them.  They might be tracking stuff down.  Or they might be getting harassing phone calls from banks about my debts.

In any case, it’s up to me whether my heirs are leaving flowers at my grave or spitting on it.  My creditors won’t care one way or the other.

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It’s clever.  I can’t say that it’s fraudulent.  It’s not as if he bought a stamp and is stamping the cards himself or anything like that.  They hand him the cards with the extra stamp, and they let him cash in his free lunch by turning in multiple incomplete cards.  He’s playing by their rules.  They just haven’t caught on yet.

They just haven’t caught on … yet

That’s the rub.  They will catch on eventually.  Someone at the shop will see what’s happening, and close the little loophole.  They may start demanding that the card be completely full: no multiple cards.  They may just get rid of the free stamp, so there’s no advantage to collecting more than one at a time.  Or something else.

He, and everyone else, won’t be able to do that anymore.

But you know what?  That’s all right!  Kudos to you if you find a loophole and enjoy a little reward for it.  This is the free market in action, and it’s the best way in the world to wring out inefficiencies, because ultimately society as a whole benefits when that happens.  Businesses should be free to offer incentives to attract more business, and consumers should be free to do their darndest to extract as much service from businesses as they can (without being illegal, immoral, or unethical).

Inefficiencies are wrung out all the time

Here are just a few that come to mind:

• Bounties for switching long distance companies.  This was in the early- to mid-1990s if I recall correctly.  There was fierce competition from long distance companies to steal customers from competitors.  The people who played this game would switch early, and switch often.  Company A would pay someone $50 to defect from Company B.  As soon as the check cleared the bank, they’d be on the phone with Company C, ready to sign up if the price was right.  Invariably the price was right, and as soon as that check cleared the bank, they’d call up Company A again!  Eventually the phone companies caught on, and they started attaching strings:  the bounty would come as a credit on their next six phone bills.
• Free dial-up Internet.  Others played the game with AOL and other ISPs far better than I did.  They’d call up to cancel after paying for a while.  The representative would offer a free month.  Awesome.  Thirty days later, they’d call up to cancel again, and get someone different on the line, who would — you guessed it! — offer them a free month just for staying on.  Eventually, they saw this happening, and kept track, I guess.
• Free airline five-star treatment, courtesy of the Mint.  Buy a whole boatload of dollar coins from the Mint, using your credit card, and get them delivered to your door, for free.  Make sure to use a card that gives you airline miles.  When the money arrives, deposit it in the bank, use it to pay off the credit card bill in full, and keep the airline miles (or cash back, or whatever).  Well, not only did the Mint not appreciate this (since the whole goal of this program was to get the coins in circulation), but some credit card companies started treating these kinds of transactions as cash advances, so interest started accruing immediately.
• Withdrawing large amounts of coinage, searching them for gems, and redepositing them in the same bank.  This is more for a coin treasure hunter (of which I know a few).  Withdraw $500 worth of half dollars.  Go through all of them searching for ones that are worth more than face value.  After picking through all of them, return the $499.50 worth that are worth exactly 50 cents apiece back to the same bank.  If you were a teller at that bank, how quickly would you get sick of that?  One of my treasure-hunting friends was ticked off when they started charging to withdraw coins like that!

In any case, here’s my story and I’m sticking to it.  Loopholes are made to be found and exploited.  Just realize that they’re not forever, and that you may the cause of your favorite loophole’s demise.

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I have thirty-two domains in my Namecheap account.  Some are for my wife’s projects but many are for mine.  I got them probably for the same reason that J. Money got his: I had some idea for a website and used the domain as a first step to committing to the idea, or a mental placeholder, or both.

I haven’t carried out all of those ideas, or even most of them.  The problem is that carrying the domains isn’t free; it costs about $10/year for each one.  Each unimplemented idea costs me $10/year, and cuts into the income for the sites that are producing.

This year, I’ll get these domains to earn their keep, or they’re going away. It gives me a twinge of guilt to renew them each year while they’re in the same state that they were when I registered them.  Someday Real Soon Now has to be This Year.

Getting a domain to pay for itself shouldn’t be that difficult.  Since my web hosting is a fixed cost, and I can still add plenty of domains to the mix, getting the domains in the black means income of only about $1 per month.

I’ll take as many websites with positive cash flow as I can but I need to get them that way first.

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J Money of Budgets Are Sexy was relieved of his Plan A.  He was fired from his ~$70k/year job with basically no notice.

The good news is that he was going to give his two weeks’ notice the next day.  How’s that for timing?

He had been planning for this day.  He made it a goal in August 2010 to save up $50k so that he could try working for himself.  He was 92% of the way there when he was fired.  I’d call that close enough.

He was ready for Plan B when it arrived.

He’s been blogging at Budgets Are Sexy for almost three years, so he had begun planning when things were probably just jolly at his day job.  He had been there a couple of years already.

In 2010, though, there was some serious writing on the wall.  In June, he got a 10% cut in salary.  In September, a whole bunch of his benefits were taken away, including his 401(k).  I asked him in the comments whether he lost what he had already put into his 401(k), and at that time he said that he hadn’t been paid all that he was owed.  When a company starts getting dodgy about your vested retirement funds, that’s a gigantic red flag.

I’ve heard other stories like this.  The writing on the wall starts with cutbacks.  The garbage is collected less often.  Salaries are frozen. Then they’re cut.  Hours may be cut.  Benefits are taken back, and accounting for work done becomes more overt.

Jobs are cut further down the line, maybe as a last resort. Why?  A lot of business knowledge walks out the door when someone is fired.  A new person would need to be trained.  That, and firing someone you’ve worked with for months, or years, is a painful experience.  People avoid this as long as they can, but sometimes there really is no other choice.

J’s a smart guy.  I don’t think the writing on the wall was lost on him.  But the fact that he was planning his escape hatch out makes the difference between depression and enthusiasm when the hatchet falls.

He’s enthusiastic about his future, partly because he has his Plan B ready to go, and almost fully funded.

I’d like to say that I’d be in the same position if I were to lose my job, but I’m not.  Are you?

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In his latest book he writes about reading effectively for maximum return on investment.  In each piece of reading, it pays to hunt for one good idea that will either make the time reading well spent, or will pay back the cost of the book, e-book, or seminar many times over.

It’s one reason I enjoy reading bloggers like John Chow.  His posts have given me more than one good idea, some of which I’m using now.  My subscription to Gary North’s site gives me several good ideas each week, and more in the forums.

You can get that one good idea just from reading an eBay auction.  I was looking to buy a crock pot lid to replace the one that currently has only a wingnut for a handle.  Looking at that auction gave me the idea of replacing the wingnut with a dresser knob.  Works great now, and it only cost us about 20 minutes of searching for a screw that would fit the knobs we had.

The power of OGI.  One Good Idea.

I’ve bought e-books costing $19 and up at various times.  (The topic of one e-book I got for $19 was how to write an e-book!  I’m using it now.)  I’ve gotten several good ideas out of that one already, but I really need just one that brings in $100 or more to make the purchase of the e-book completely worthwhile.  That’s not difficult at all to do.

I’ve bought other e-books on sale.  Just like in brick-and-mortar stores, information goes on sale, too.  The best sales don’t last long at all, but with those you can get your one good idea (or more) at a discount.  I haven’t bought anything yet that was complete junk.  They’ve all had some merit.

Search for one good idea in each piece of reading, and then apply it.

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He was a bit older than I was.  Under typical circumstances, painting house numbers on a curb isn’t an unusual job for a teenager.  But it isn’t a typical job for someone in his late forties or early fifties.

I accepted his offer, and chatted with him a bit as he worked.  He had lost his job, and was caring for a relative in the middle of all of this.  This wasn’t the first time he had gone out to drum up business.  He was used to this hustle, and it’s gotten him through a few times.

He did a good job.  It looks nice.  He offered a fair price.

I have a great deal of respect for him. Work is work, and he’s getting out there to get some.

Entrepreneurship.  Rainmaking.  Hustling.  Doing what needs to be done.  It’s what keeps the economy moving.  It’s what will get the economy out of the slump it’s in.

I’ve talked to other webmasters of money sites who don’t really consider discussion of side businesses to be part of personal finance.  I don’t agree with this.  Trying some kind of low-risk side business can ultimately mean the difference between weathering a downturn in style, or crashing and burning.  If personal finance is about income, the money from a side business is just as green as the money from a paycheck.  The guy who painted the number on my curb credits his positive outlook to the previous times he went out to sell things.  He knew that he could do what was needed because he had learned the skill.

It’s far better to make the first tries at a side business when the only cost is time, rather than make those first tries when there’s pressure to bring in money to put food on the table.  That way, if you do have to rely on it to put food on the table, it’s not as scary.  You see the lemonade within the lemons, rather than dwell on being squirted in the eye with lemon juice.

The best outcome of all this?  Not only can the side job put the food on the table, it can possibly take off and you can be better off in the long run than with the job.

And the guy who did my curb?  I expect that I’ll see him again.  He’s learned to come back for repeat business.  Paint isn’t forever.

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It speaks to my lack of self-confidence in my abilities that I did all of this for free.  In fact, it’s worse than that:  it’s been costing me each month for over a year.  A pretty hefty negative.

In talking with these folks, I was set to hand over the domain names and make a clean break once and for all.  At least it wouldn’t be costing me anymore.

We talked for a bit, and I found out that they had registered another domain name (more or less the same as the one I did) and had tried to get a website set up, but they couldn’t quite get it to do what they want.

Let me switch for a minute to an article by Lisa Barone over at OutspokenMedia.com.  I found out about her work via her Twitter account, which I found out via TweetingTooHard.com, which isn’t exactly a compliment, but there you go.  (She did manage to score a video response from the Old Spice guy, though.)

The post detailed in numerous ways how she was fed up with people valuing her expertise but placing no value on her time.  People would want to get a full marketing plan over coffee — something that her company would charge big bucks for.  She’s put her foot down and decided that, no, this is my business and I’m not giving it away anymore.

Now jump back to the folks I did the website work for.  I’ve come to realize that I know more than a thing or two about running a website, writing on it, building up links, running a newsletter, etc.  Unless there’s a really compelling reason to the contrary, I shouldn’t be giving this away for free. It certainly shouldn’t be costing me.

So, when I talk with them again, I’m going to take some advice from the great modern philosopher Strong Bad:

You gots to look insiiide yourself!  Positate the negative! When life throws pies atcha, you make yourself a tall, cool glass of piemonade!

I’m going to stick to my guns and charge what I’m worth. Of all things!  If it makes me depressed to see other people not earning what they’re worth, then I should be even more depressed not to earn what I’m worth.  If they say no, oh well, but I’m not going to lower my price to ridiculous levels just to get more work for myself.  I’m certainly done working for free.  What’s more, the fact that I enjoy doing this stuff is independent of whether I charge for it.  Isn’t getting paid for doing work you enjoy a good thing?

Are there any negatives on your balance sheet that you can positate?  Any ways that your time and your expertise can be used more effectively, more profitably, and with more respect from the people receiving it?

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Like most other things in business, a problem for one person is an opportunity for another.  All-sales-final, everything-must-go sales can bring monster deals for entrepreneurs.  I’ve been to store closings during the final days that the remaining inventory was discounted 90% or even 95%.  Brand new, in the package, selling literally for cents on the dollar, almost certainly at a loss.

When Tweeter closed in December, we bought a few items for sign displays.  We used these at a craft show my wife went to, and we paid a fraction of what they would have cost at Staples.  There was still a limited inventory of high-end electronic equipment with the price slashed 50% or more.  If I followed that market more, I know there were great deals in there.  Possibly great enough to resell on eBay, even if I didn’t really want to own the equipment.

If Circuit City closes its doors in a similar fashion, there could be some fantastic deals.  Items aren’t slashed 90% right from the start, of course, but as the store gets smaller and the shelves clear out, the deals get better on what remains.  On the last day, the selection will be thin, but the deals will be phenomenal.

To take advantage of the closing, try these:

• Find out when the last day of business is. The more time you have to look over the merchandise, the better.  The more planning you can do, the better.
• If you have a resale business like an eBay store, start scoping out the items, and see what you can sell them for.  Determine a price point that will give a good chance for profit on the item.
• If you’ve had your eye on a particular item, one that you’d want to own, don’t wait too long, especially if it’s a popular item.  A 10% or 20% discount on a high-ticket item is good for you.  You’ll want to buy when the discount isn’t so great that you’ll have competition from resellers.
• Don’t be afraid to lowball. The worst they can say is no, and the closer the final day of business gets, the less likely they are to say no.
• Ask about the business equipment. They’ll need to sell their shelving, cash registers, price guns, tape, computers, etc.
• Bring help. They probably won’t provide help lugging out truckloads of stuff.
• Borrow money to buy? Only if you’re really sure that you can afford it!  This recession will be long.  Make buying some liquidated inventory an opportunity, not a burden.

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So, when I came home, I went to Amazon.com and ordered it.  We have Amazon Prime and I had $10 in gift certificates that I earned by searching the web through SwagBucks, so it cost me all of a few bucks shipped to my door by the end of the week.

Anyway, People Are Idiots … is written in his standard “break ‘em down, shake ‘em up, point ‘em in the right direction” style that is his trademark.  He freely admits that none of the suggestions he makes in the book are new.  They’re the same old thing.  To lose weight, you have to eat less and exercise more.  To become wealthy, you have to spend less and earn more.  And so forth.

What’s different is how he goes about motivating people to take his suggestions.  It’s all about psychology.  It’s the same kind of psychology that makes Dave Ramsey brilliant, because if we all did what we knew was right, we wouldn’t be in nearly the amount of hurt we are in now.  It can be a very effective tool to get our emotions involved, either by slaying a little debt dragon, or by getting angry at the mess we’ve made with our lives.

I liked the clarity of what I read earlier tonight, and look forward to reading the rest of People Are Idiots And I Can Prove It! when it comes in.

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So if you were thinking about getting 5% off the cheapest gasoline in town, you’ll need to apply before this Friday, November 14th, 2008. Sorry about that!

The non-business TrueEarnings® Card from Costco and American Express, as far as I know, is still being offered.  That still gives you 3% off of qualifying gas.

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