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

May 25, 2011

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:

——————

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**

Filed Under: Bad Examples, Capitalism, Consumer Debt, Making Smart Choices Tagged With: , , , ,

In college? Switch majors. TODAY.

May 23, 2011

 

Did she major in a) philosophy, b) drama, or c) applied mathematics?

Problem: a college’s engineering students have futuristic ideas, but no clue how to monetize them. That same college’s business students have grand capitalistic designs, but nothing to market.

You can probably figure out the solution.

We’ve said repeatedly at Control Your Cash that formal higher “education” isn’t an absolute good. And we’ll continue to put the word “education” in quotes if people are going to classify Montclair State’s “How to Watch Television” as no less worthwhile than MIT’s Atomistic Modeling and Simulation of Materials and Structures. (No dismissive quotes required for that course description.)

State legislators and impressionable parents throughout the country transfer far too much taxpayer money into the pockets of directionless adolescents looking for a place to drink, protest and sleep late while deferring productivity. The tangibly beneficial college and university courses continue to get outnumbered by dross like everything listed here.

And then there’s the Cambridge of the Mojave, the University of Nevada-Las Vegas.
Indulge us with some time for a little local content.

To most people who think about this kind of thing, UNLV is a punchline – a basketball factory, a commuter school for unambitious commuters, the kind of institution that’s emblematic of the same faux learning that we’ve spent the last few paragraphs deriding and whose only redeeming feature is its world-renowned hotel management school.

Not quite. UNLV is also home to a groundbreaking program that should revolutionize post-secondary education: a partnership between the two most crucial schools at the college, engineering and business. (UNLV doesn’t teach medicine.)

(Note: Control Your Cash co-founder Betty is also a co-founder of UNLV’s Center for Entrepreneurship, known colloquially as the “E-Center”. Betty attended Northern Arizona University for one semester, realized her fortune lay elsewhere, and sought and achieved it. With no student loans to worry about paying off. Years later, she realized that the common financial sense she implemented in her own life barely existed in academia. But rather than dismiss the typical university education as largely pointless, she committed resources to finding a way to make it meaningful.)

The UNLV engineering/business partnership began as the fusion of two separate but easily unifiable ideas. Since 2000, the curriculum requires senior engineering students to form small teams and enter a design competition. Simply put, the teams have to invent something practical. And their brainchildren have been not just feasible, but inspiring: a cane that uses sonar (for blind people), motorcycle headlights that see around corners, etc.

A few hundred yards away, business students were doing something similar: creating plans and projections for potential businesses. The last couple of years your humble bloggers have had the pleasure of serving as judges for the business students’ contest, and we’ve seen some impressive proposals. They include the group that was going to import and distribute a revolutionary weatherproofing compound from South Korea, and the “micro-farmer” team who wanted to grow vegetables on abandoned urban lots. Some of the other ideas were less marketable than they were creative, still others were quite the opposite. But the very act of conceiving and developing these ideas did and will do far more good for the world than the nearby English class looking for meaning in the short stories of Jack Kerouac.

The trouble was that none of the engineering projects ever got off the ground. (Figuratively speaking, particularly in the case of the dolly that lifts 300-pound payloads 3 feet in the air.) Meanwhile the business projects, while some of them had potential, weren’t exactly recalibrating the boundaries of human endeavor.

So the deans of the departments got together and meted out a little interdiscipline. For full credit, the engineering students had to partner with the business students (and vice versa) to develop a viable plan. For the engineers, it meant developing an appreciation for normally mundane tasks like securing warehouses, filing paperwork, and learning how to market. For the aspiring MBAs, it meant gathering the requisite technical knowledge about how moneymaking gadgets make money. (Dr. Andrew Hardin, director of the Center for Entrepreneurship, got the inspiration for this from a similar program at Washington State University.)

You need both the yin and the yang. This is just one of countless examples, but there’s a $500 Universal Corporation all-in-one remote control at Control Your Cash headquarters that contains 43 buttons and 6 screens, most of which never get used. The device is supposed to control the TV, the DVD player, the satellite radio, the AM/FM, the CD players, the iPod and probably one or two other things. Three years in we still haven’t mastered this leviathan of overengineering, because we can’t be bothered to spend the necessary couple of days decoding its indecipherable user’s manual. Seriously, we don’t need 80 equalization pre-settings (“Classical”, “Bass Reducer”, “Sports”) for the tuner. We’re not Jimmy Iovine.

A competent business management team would have simplified the remote while maintaining its primary selling feature – the ability to control every electronic component in the house. The team would have hired an erudite technical writer to translate the instructions into something a layperson will want to comprehend, and packaged the remote as something more necessity than luxury. We can only wonder what engineering breakthroughs never make it to market, for lack of marketing.

When teachers’ unions in your state complain that you need to fork over more tax money for education, ask them if and how they’re prepping kids for crucial programs like UNLV’s engineering/business partnership. And making a legitimate difference in the world, not a theoretical one.

TONIGHT, the winners of the 2011 competition do a dress rehearsal for the forthcoming tri-state competition. If you’re in the neighborhood, swing by and see how the future doesn’t merely appear.

**This article is featured in the Totally Money Carnival #21-Memorial Day Edition**

**This popular post is also featured in The Carnival of Wealth #42**

Filed Under: Education, Entrepreneurship, Making Smart Choices, Net Worth, Personal Finance Tagged With: , , , , , , ,

Everyone’s Jean Freaking Chatzky

May 18, 2011

He's a FOREIGN EXCHANGE student. (Which will make sense in a minute.)

Once a week or so, we get solicited by someone offering to write us a guest post. The offer usually comes as a template, and about 15% of them get the name of the blog wrong (“I really love your work here at    Consumerism Commentary .”) Even when they get our name right, the introductory email almost always tells us all we need to know about the submitter’s writing style (it’s abysmal.)

Last week the folks at something called Forex Traders hit us up. Their point lady was very polite and she followed through when we grilled her on our standards.

The Forex Traders post follows, verbatim. While we don’t like to bother cleaning up other people’s stilted writing (which is far more work than writing a post of our own), we do love to editorialize. So here’s the one-of-a-kind Control Your Cash treatment in a whole new written form: literary criticism (Forex’s gold in this color.) Enjoy.

“Buy-and-Hold” Investing Strategies May Be Extinct Down the Road

Almost everything’s extinct down the road. Just ask trilobites. Not sure what the author’s getting at with the headline. Clearly he thinks something will supplant buy-and-hold investing, but doesn’t think that that replacement is important enough to warrant top billing.

One never-ending “paradox” in the investment community is that, while the investment advisor on the consumer retail front is pushing a “buy-and-hold” strategy for his clients, the back-office traders for the same firm are plying their helter-skelter quantitative trading strategies for all they are worth, and that has translated into millions of dollars of profits for the investment banking community alone.

Wow, way to introduce your topic. Seriously, what are you saying? Here’s a Control Your Cash translation, for our anglophone readers:

Investment advisors encourage you to buy-and-hold. But they make money on commissions, so shouldn’t they preach the opposite?

See what we did there? We went from 66 words to 20 and crystallized your argument. Glad to help.

The back office abhors competition or even the notion of sharing these gains with the general public at large.

“General public at large.” Because “public” wouldn’t have made it clear, so we expanded it to “general public”, and apparently we still don’t think you’d understand what that means, so we went with “general public at large.”
The internet is officially too democratized.

If an investor truly wants above average returns, then he must pick and choose the hot sectors at will.

Write in the second person, you pompously verbose tool. (See? Like that.) You’re not writing to “an investor”. You’re writing to the person reading. Who will appreciate being thought of as a person and not a designation.

Prudent investing may still involve research, locating a value equation that suits your tolerance for risk, making sure that your selections are well diversified, and then pruning and fine tuning your portfolio as time goes by. What has changed is the process for achieving each of these objectives. The era of globalization is upon us.

Oh, for Christ’s sake. “The era of globalization is upon us”? Thanks for that. It’s true, you know. Computers and the internet and jet travel have made it easy to talk to people in London and Paris like they’re just down the street. Dude, the transatlantic cable was laid 150 YEARS AGO.

Sorry, can’t take this anymore. From here on in, we’re going strikethrough on the rest of this bile. Our rewrite will follow. Damn; remember what we said about editing guest posts being more work than writing originals? Maybe one day we’ll learn.

Investing cannot thrive on mere domestic issues alone. Every full-service broker can connect you with any exchange around the globe, but the safest avenue may be to utilize the plethora of Exchange-Traded Funds (“ETF”) that have sprung onto the investing scene in the past decade.

Emerging markets have been the success story over the past decade, and the best way to invest in this space is through an ETF designed for the purpose. Offerings can focus on a specific country or region, like Asia, but when you invest overseas, you must accept some currency trading risk along with the ride. As long as the U.S. Dollar weakens during your holding period, currency appreciation can actually work to your benefit.
Hedging your forex risk is not recommended for the inexperienced, but, by keeping an eye on the Dollar’s general value, you can opt in or out at the most opportune times.

The world has also gone crazy over forex trading during the past decade as well. This popularity has more to do with flexibility and the advance of technical trading platforms, but you need not jump into that market for the short term. If expectations are for a weaker Dollar, and they will continue to be as long as the Fed pursues its quantitative easing program agenda, then there are ETF’s for currency, too. In a weakening situation, the Swiss France (sic) could be a potential bet. If you want a position in the “Swissie”, the “FXF” ETF is invested in the “USD CHF” currency pair and is there for the taking.

ETF’s have the additional benefit of providing instant diversification. No more having to follow twenty-five stocks in your portfolio. Invest in sectors by choosing from a variety of ETF’s. Domestic companies, emerging markets, precious metals, and commodities can now coexist in the same portfolio. As for reviews, check the performance of the few funds that you hold, prune and fine tune as you like, and buy and sell on the exchange as with any other security. Investing in emerging markets was never so accessible.

Translated, he said:

Buy an exchange-traded fund; a mutual fund that, you guessed it, trades on a public exchange. There are ETFs that focus on particular sectors of the economy, or on particular securities (commodities, precious metals, etc.) You can buy ETFs that concentrate on a particular region of the world. That means you’ll have to pay attention to exchange rates. And that means you can hedge a weak U.S. dollar.
Which brings us to trading currencies themselves. But rather than invest directly in baht or rubles, you can buy a currency ETF. For instance, the Rydex CurrencyShares Swiss Franc Trust, which trades on NYSEArca, a division of the New York Stock Exchange.

Why would I buy that instead of just buying francs?

You shouldn’t. The only advantage to a currency ETF is that if you’ve already got a mutual fund through a place that offers currency ETFs, you can have both accounts in one place.

The end.

Addendum:

The headline, which didn’t make much sense when we read it blindly, makes even less sense now.
We’re not above shilling here at Control Your Cash (we’ve been fellating the Amazon Kindle for months now, and even the small version is a chore to wrap one’s lips around), but it’s got to be a product or service we believe in. Which currency ETFs aren’t.

And if you don’t want your clumsy, long-winded, misspelled guest post goofed on and dismembered, send it to someone else.

**This article is featured in the Carnival of Wealth #39**

Filed Under: Capitalism, Investments, Making Smart Choices, Net Worth, Newsflash Tagged With: , , , ,
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