GUEST POST: Max Cash Providing Clean Title Loans in a Dirty Economy

Today’s guest post is from Jack Nolan. It’s a thinly veiled infomercial for car title loans.

Car title loans? Seriously? What happened to you guys? Control My Cash, my ass.

Hold on a minute.

Yes, getting yourself in a position where you’d even consider a car title loan means something went very wrong along the way. HOWEVER…

You’ve got to start somewhere. The Control Your Cash authors love to take long multi-day hikes with staggering elevation changes. If an aspiring hiker wanted to join us, we’d encourage her to come along. If she were 50 pounds overweight and had just quit smoking, we’d explain that she wasn’t quite ready yet, and needed to start off slowly before doing the Grand Canyon rim-to-rim.

How’s that for a cumbersome analogy? The point is, of course we largely discourage people from borrowing money at any rate larger than what they can loan any of their own money out at. And if you’re borrowing from a car title lender at 75%, you’re probably not going to find an investment that pays 76% that you can put that borrowed money in.

But if your credit’s shot, a car title loan might be the least bad option if you’ve got payments you absolutely have to make. Better to be indebted to a car title company for a couple of weeks and pay a lot of interest than to get foreclosed on. Think of the car title loan as the 1-mile urban stroll, and the American Express Blue Cash card as the ascent of Half Dome. If you’ve already damaged yourself, whether financially or physically, you’re going to have to endure some unpleasantness before getting to the good stuff. But the unpleasantness should at least be as constructive and helpful as possible. So take it away Jack:

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The recession has forced many people to seek alternate forms of loans when a cash emergency or financial crisis strikes.  Before the economy took a turn for the worse and banks were bailed out by the government who instilled strict lending regulations, regular folks could walk into a bank and secure a cash loan with no trouble at all as long as their credit was in pretty decent standing.  Now it’s nearly impossible for someone to get a loan from a bank even if they have perfect credit and means to afford a loan.

Max Cash Title Loans lets people who need a title loan have companies compete for their business.  The company helps borrowers across the country find the lowest interest rates possible, forcing other title loan lenders to become more transparent about their policies and compete against other title loan lenders for the borrower’s business.  Loans are now more widely available and shady title loan companies are dwindling, but you still have to know what you’re getting into when seeking out a short term loan.

When banks started turning down loan applicants at the dawn of the recession and a global financial panic started to sink in, the floodgates opened for all sorts of lending companies to provide a needed service to the masses.  Soon the term “predatory lending” became popular, with payday loan companies and car title loan companies leading the way in chasing people down a rabbit hole of inescapable debt.  Such lenders acted just like the banks whom they were trying to supplant, placing their customers into an endless cycle of debt with no manageable options to eventually pay off their loans.

A payday loan company lends small amounts of cash to borrowers, which they’re expected to pay back by their next payday.  A typical payday loan usually goes like this:

-A person who needs quick cash to avoid an embarrassing or life-changing crisis can’t find a loan because of bad credit or financial history.
-The payday loan store will lend a few hundred dollars at 400%, which doesn’t seem that enormous considering the loan term is no more than 2 weeks.
-The customer routinely takes out subsequent payday loans to afford the original loan because of the high interest, eventually spending hundreds or thousands of dollars on a modest initial loan.

People who use payday loans often have no assets worth using as collateral.  Payday loans are fast and easy to get with just a pay stub and ID, which makes them attractive to desperate borrowers.  Employees are trained to encourage customers to borrow more than they can afford, and often insist the customer take out more and more loans each time they return to make their payment on the old loan.

Car title loans are harder to get approved for.  A title loan requires a customer to have a clean car title on a vehicle that is rather new and is worth something, though some companies offer title loans on virtually any vehicle.  The more the car is worth, the more a person can borrow.  Loans are typically worth $2,000 to $4,000.

Here’s what a typical car title loan would go like:

-The same customer who needs quick cash can’t get a loan from a bank, but has a car free of liens and worth a decent amount.
-The customer uses the car as collateral.
-The title loan company lends a few thousand dollars with a loan ranging from 90% – 400%.

Unlike payday loans, car title loans have a deadline – either when the loan is paid off, or when the company repossesses the car. Still, many car title loan companies lend to anyone who walks in the door.

This opened up an opportunity for Max Cash Title Loans to let borrowers have reputable, trustworthy title lenders compete for their business. Max Cash will deny a customer if the vehicle doesn’t qualify, or if the customer doesn’t have the means to pay back the loan.  Max Cash also refuses to do business with title loan companies who charge obscene interest rates.

Car title loans aren’t for everyone, and it’s easy to fall into a slippery slope of debt if they’re not managed properly.  Never borrow more than you can afford, and read and understand all the terms and conditions of your title loan or other bad credit loan before signing.  If you feel uncertain, ask the loan agent.  A reputable company will help explain all the details involved in getting a title loan.  If your loan agent is hiding something or rushing through jargon like a prepared speech, run.

Car title loans should be a last resort. Max Cash Title Loans helps ideal loan applicants connect with reputable lenders who work for the borrower, and never the other way around.

**This article is featured in The Yakezie Carnival: Goals Edition**

Sometimes, an education is the worst thing you can have.

Professors Snider and Cooper were right. Be chrool (sic) to your scuel (sic).

DISCLAIMER: (And we disclaim things so infrequently, you know this is big.) This post references and links to a story that originally appeared in the Las Vegas Review-Journal, a paper that treats even hints of copyright violation the way Genghis Khan treated Central Asia. The R-J and reporter Richard Lake provided much of the raw material for this post, as did the unfortunate MySpace page of the post’s protagonist.

Time for a painfully simple exercise. We’re going to give you a series of words – concepts, really. Then say whether each is good, or bad. Look at each one irrespective of anything else. Here’s an example:

Clean air – good or bad?

Don’t overthink it. It’s not “clean air, but what about all the manufacturing jobs that will be lost if the parts of particulate matter per million rises a tiny fraction?” It’s simply, “clean air”.

Understand? Answered it? Then let’s go.

Puppies – good or bad?
Ending terrorism – good or bad?
Education – good or bad?

Slow down there, Ace.

After years of real-world examples, there’s no getting around it – all levels of government spend far too much taxpayer money to put people in classrooms where they’ll neither do anything productive nor develop the capacity for doing anything productive.

(People are going to misinterpret this post, and they’re going to start by misinterpreting that line. We’re not saying elementary schools shouldn’t teach basic math and grammar. We’re saying college is more often than not a waste of time.)

In the last century, college/university has gone from a place where you learn a profession, to a mandatory rite of passage for kids with good grades who come from white-collar families, to a mandatory rite of passage for everyone, to a necessity no less fundamental than food and water.

That’s wrong on several fronts. Amassing debt before entering the real world isn’t necessarily bad, but the debt has to have a purpose. Seeing as this post is about education, let’s use a SAT analogy:

Borrowing money to buy a house : borrowing money to buy lottery tickets :: borrowing money to study engineering : borrowing money to study sociology.

No matter how hard we hammer the opposite point, some commenters are still going to miss it, and lament that we’re downplaying the importance of education. Again, we’re not. But the unalloyed word “education” isn’t always an absolute good.

Meet J.T. Creedon, student government president at the College of Southern Nevada. Guess how many years he’s been going there.

No, higher.
10. That is not a typo.
He’s 28 years old.

(We can only speculate as to how many of the people who voted for him wouldn’t have voted for John McCain for president because he was “too old.”)

Education, ideally, is a financial investment for the educatee: make little money for 4 years, so you can make a lot more money for 4 decades. Sure, there are purists who don’t concern themselves with such philistine values, and who argue that the trivium and quadrivium are ends in themselves – and that education for its own sake is our very purpose here on Earth. This argument will be valid the moment classrooms build themselves and professors forgo salaries.

The economic argument occasionally carries weight among the purists, if they can use it to serve their own ends. Money becomes suddenly important to some people when the possibility of losing it presents itself.

The legislators and executive officeholders in Nevada, like those in a lot of states, spent far too much taxpayer money during the good years and now face a budget crisis. In Nevada, education makes up 28% of the state budget.

To hear the pro-“education” forces, if you want to deny unlimited funds for students, teachers and administrators; or even get the percentage down to 26 or so, that means you want children to be illiterate and innumerate.

First, tens of millions of kids already are illiterate and innumerate, with no incentive for them to read, write, add, divide and calculate square roots. Read Facebook, Twitter, MySpace (especially MySpace, where we’re pretty sure you need to be convicted of a felony to open an account) or the comments on any site other than Deadspin if you don’t believe us. Most of these kids’ parents aren’t exactly qualifying for Rhodes scholarships themselves.

Creedon is exactly the kind of person that a blanket funding policy attracts, and helps render financially impotent. Creedon had only moved to Nevada when – well, when he was an age at which most community college students are a year from graduating. Now at 28, he’s not close to done. From the Review-Journal:

(H)e’s probably going to leave for an out-of-state university.
“I really want to go to a place where it’s a little more stable for the next two years,” he says.
He’s applied to universities across the country, from New York to Texas to Washington state. He’s received one acceptance letter and waits to hear from the rest. He also applied to UNLV, but that’s just his safety net in case he doesn’t get in anywhere else.

Again, 28. An age at which:

  • Steve Jobs had already sold millions of computers, taken Apple public, and ceded operational control of it to a professional CEO;
  • George Harrison had embarked on a solo career, because the Beatles had already broken up;
  • Steven Spielberg had directed Jaws, then the biggest-grossing movie in history;
  • Theo Epstein was responsible for the day-to-day operations of the Boston Red Sox;
  • Thousands of other people were doing something productive.

But hey, Creedon’s getting an education. Given that there’s a positive correlation between duration of post-secondary study and real-world success, those eventual 12 years in the classroom will certainly make Creedon a bigger star than Jobs, Harrison, Epstein and Spielberg combined.

We don’t mean to use an outlier as indicative of an entire group. Instead we mean to show that Creedon’s no outlier. His eventual diploma, should be ever earn one, will be in history and/or political science. That puts him square in the majority of unproductive, barely employable college graduates, but 95% of students at his college never graduate (necessitating the rare bold/italics/underlining hat trick.) Our educational system doesn’t merely turn these dropouts out by the myriad, it does so for obscene prices – both in terms of taxpayer wealth confiscated and of student loans incurred.

The president of Creedon’s actual college – not merely that of the student government – has that analytical flair that academics are famous for (again, from the Review-Journal):

Already, the college had to turn away 5,300 students in the fall.
“Had we been able to accommodate those students, our enrollment would have been much higher,” (Michael) Richards says.

They should phrase Richards’ statement as a true/false question in one of the community college’s introductory math tests.

What makes J.T. Creedon reprehensible is…well, several things and they’re difficult to rank, but what struck us hardest was his insistence on taking the moral high ground of concerning himself with the nebulous well-being of others, rather than looking at the financial necrotizing fasciitis case in the mirror. He publicly advocates securing ever more funding for students such as himself – oblivious to the reality that his own example is as strong an argument as any for gargantuan financial cuts.

This world would be a far better place if people took care of their own business first. J.T. Creedon is welcome to save the world from a shortage of overlearned, underexperienced waiters and retail clerks. That he feels an obligation to do so while taxpayers continue to wean him, well into adulthood, is his problem, and ultimately society’s.
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If your kid says he wants to go to college, or even merely thinks that that’s what you’re supposed to do when you get out of high school, part of being a parent is assessment and counsel. J.T. Creedon could have spent $3000 to enroll in truck driving school a decade ago, graduated with a commercial license a month later, and at the absolute minimum made $600,000 since then.

Heck, J.B. Hunt would have paid for his schooling, requiring only a one-year apprenticeship and allowing Creedon 9 years of freedom. But truck drivers never get on TV, nor do they have the luxury of organizing protests. They’re too busy delivering the food and drink that parasites require to survive.

Creedon could have learned to deal blackjack in even less time than it takes to learn to drive a truck. He could have done so for far less money, but with similar earning potential. (Albeit without ever seeing daylight nor breathing clean air. We live in a world of tradeoffs.)

Society can’t function without physicians and pharmacists. Nor without contractors and carpenters. But it’ll do just fine without directionless leeches.

This was Part I of a two-part series on higher education and how it pertains to the financial life of either you or the 20-something in your life. Part II, which is a lot less depressing than Part II, goes live Monday.

**This article is featured in the Yakezie Carnival on Judgement Day 2011**

and

**The Carnival of Wealth #40-Memorial Day Edition**

Micro Millions

Brandi couldn't find the man of her dreams until she won the lottery

Indulge us for a few minutes before you go out and buy this week’s lottery ticket(s)?

Mega Millions and Powerball are America’s two biggest lotteries, available in 41 and 43 of the contiguous United States, respectively. And every week, tens of millions of idiots feed the beast.

Both games are for mental patients, but let’s deconstruct only Mega Millions for now.

To win the jackpot, you have to pick 5 out of 56 white balls and 1 out of a separate 46 red balls.

Regard each of the two colors separately. For white balls, you can pick any one of the 56 for your 1st ball. That leaves 55 choices for your 2nd ball, 54 for your 3rd, 53 for your 4th and 52 for your 5th.

Which would be

56 x 55 x 54 x 53 x 52

except you need to remember that every combination is counted multiple times. Say you pick balls 8, 13, 25, 33 and 50. Well, that’s the same as 25, 8, 50, 13 and 33, right? Any one of your five chosen balls can be in the 1st position, leaving four balls for the 2nd position, three for the 3rd, etc. There are 120 possible permutations, so the total number of five-ball combinations is:

56 x 55 x 54 x 53 x 52
5 x 4 x 3 x 2

Which equals…well, it doesn’t matter what it equals because we’re not done yet. We still have to multiply by the chance of you getting the red ball right, which you have a 46-to-1 shot of doing. So the chance of the numbers you pick being the numbers that come up is

56 x 55 x 54 x 53 x 52 x 46 = 175,711,536
5 x 4 x 3 x 2

That’s right, 176 million to one.

Lots of people, including most lottery players, don’t bother to distinguish among large numbers. They figure that once you get beyond 10,000 or so they’re all pretty much the same. The chance of winning Mega Millions is about the same as the chance of you choosing a U.S. resident at random, then correctly guessing her street address.

Of course, not every dollar collected goes to prizes. No lottery is or can be a zero-sum game. Each lottery corporation needs to keep some cut to cover expenses and turn a profit.

In California, that cut is about 48%.

ExxonMobil’s 2009 profit margin was 8.6%, and more than a few thousand people regard the oil and gas multinational as exactly the kind of thieving leviathan society needs to dismantle brick by brick.

This week’s estimated jackpot is “$105 million”, which is a gigantic lie. Look at this, direct from MegaMillions.com:

The ESTIMATED JACKPOT number is in 20-point font, and ALL CAPS. The Cash Option number is in 11-point font. In other words, the estimated jackpot isn’t $105 million. It’s $66 million. Wanting to believe it’s the higher number doesn’t make it so.

Do you work on commission? Even if you don’t, if your employer offered you a $40,000 bonus this week, would you be interested?

Okay, what if he then said,
“Well, the commission is really $16,900 after taxes. We could cut you a check for that much now, but if you’re willing to take $128 installments every month until 2037, and also add the taxes back in, then that totals $40,000.”

You’d cry dishonesty, and you’d be right. This is yet another example of government functionaries obfuscating the truth in a way that if you or I attempted, we’d get sued. And lose.

After taxes (which average 7¾% state and local in some jurisdictions, plus 25% federal), that jackpot shrinks to $44,452,250.

But that’s assuming that only one ticket will win. The chance of there being exactly one winner varies with the number of tickets sold, but it can never be more than 37%. In other words, there’s never a scenario in which the most likely outcome is that exactly one person wins. If you win – which as we’ve all but proven, you won’t – there’s a good chance you’re going to have to split that prize.

Say there are two winning tickets, which are thus each worth $22,226,125. For doing the near-impossible – getting all six numbers right – you’d get 6% of what you should get. The remaining 94% goes to the government. The very government that has a monopoly on these games, and also has a de facto monopoly on education – and has taken the responsibility of teaching math to the same populace it sells lottery tickets to.

As the brilliant Durango Bill points out, if you drive 1000 yards out of your way to buy a lottery ticket – 500 yards there and 500 yards back – it’s more likely that you’ll die in a car accident en route to get your ticket than you’ll win.

But hey, you can’t win if you don’t play.

**This article is featured in the Totally Money Carnival Blog Carnival #20**