Just for Asking

How would you like to make $500 easy dollars for your family in less than one hour…just for asking?

A while back one of my life-long buddies mentioned that she regularly calls some of the companies with whom she does business and asks for discounts. The other day, I decided to see if I could do the same thing with some of the companies who lighten my checkbook every month.

I called up our cable company and told them there have been a lot of attractive ads for satellite TV lately. I politely asked the lady if there was anything they could do to help me cut my cable costs - otherwise I would have to consider one of those satellite deals. She opened up my file and then put me on hold. A moment later she returned and apologized because she could only cut the bill by $9 per month for six months. She said they usually do better than that. I learned three things. 1) I will save $54 in the next six months; 2) I will be calling again as soon as my discount period expires; 3) I really will consider switching to satellite TV.

After I hung up, I called the satellite TV company that provides a signal to our mountain home. Once again, I mentioned the competition and asked for an adjustment to my bill. The lady reviewed my package and we discovered they had a new offer. I had to give up some sports packages (Who cares?) and a handful of secondary stations to get a permanent discount of $39 per month. We do not go to the mountains to watch TV so the deal made sense. The total savings the first year is $468.

At that point, I would have called my cell phone company, but I already have a great deal with them, so I could not make any progress there. My internet service is wrapped into my cable bill and we already talked about that. But, I still had work to do.

While I was inspired, I called one of my credit card companies and asked them to lower my interest rate. They dropped the percentage two percent. It was nearly automatic. It was not really beneficial because I pay off my account in full every month, so I never pay them any interest anyway. However, it still proves a point…you can get a lot of perks from your business associates if you just ask.

Then I called my other credit card company and asked them to raise my credit limit...even though I do not need the additional credit. I did that because of what is called a “Utilization Rate”. Essentially, you raise your credit score when you have more unused credit. They doubled my available credit…just for asking.

Insurance is another area where a person can usually get better rates. Insurance companies have been known to give low entry-rates then they raise premiums upon renewal. It is a good idea to regularly shop for the best rates. In my case, I have good rates for life insurance and hazard insurance for my home and rental properties, but my health insurance company has raised my premiums by quite a bit for two consecutive years. I am shopping as we speak. I am also ready to shop for better auto insurance rates. I expect to make improvements in both regards.

The point here is that it is easy to get lazy or complacent, but a small amount of effort can pay big dividends…just for asking.

My thanks to Pat W. for kicking me in the rear-end.

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Gambling

One of the chapters in my new book is about the way adults waste money. Here is a section from one of the chapters.

Many years ago I recognized that gambling can be a lot of fun but I realized right away it is “nearly” impossible to beat the odds in the long run. We all have heard the idea that they don’t build those fancy casinos by losing to the common folks. Still, I knew that if I studied the industry I could at least reduce my losses to a minimum and even win from time to time. I checked out all the library books on the subject and soaked up the information better than Sponge Bob Square Pants would absorb a bathroom accident. Eventually, I became a very good amateur gambler.

I could expand on many of the lessons I have learned, but the most important one is this: There are only a few ways you can beat the odds and here are the ones I know about.

• The best one is to buy your own casino and be on the other side of the table.
• Become a card counter at 21. There are rare occasions when the deck will favor the player. In essence, you bet small amounts while you study the remaining cards in the deck. Then, when the deck finally has a sufficiently disproportionate number of face cards, you increase your bet substantially. There was a mathematics professor at MIT named Ed Thorp who developed and proved this theory in the 60’s. But, the casino bosses caught on and made some adjustments which make it a lot harder to duplicate his success.
• Become a highly skilled poker player. In the long run all players get essentially the same cards, but a few players (below 20% of them) grow their purses consistently while weaker players serve as their prey. But regardless how good you become, there are odds working against you in poker games too. The house takes a piece of every pot, known as rake, and most players tip the dealer with each winning hand. All this overhead makes it very difficult to overcome the daunting odds so the biggest winner is still the house.
• Get incredibly lucky. I know one lady who hit a Vegas slot machine for just under one-million dollars. Her payout is $47,000/year for 20 years. The problem was that she did not really understand how lucky she was. Millions of dollars have to be lost by other players in order to build the jackpot to that amount. In the meantime the machine had to cover all of the other smaller payouts along the way and earn a profit for the casino. Considering she was playing a quarter machine, and it only keeps about one cent per quarter, that is an astronomical number of losses. The first year, after she received her annual check, she tried to duplicate the feat, but she soon lost all of the money. The same thing happened the next year and the next. After that I lost touch with her, but I suspect she may eventually give all of the winnings back.
• Money management. The trick here is to observe streaks and bet a lot more when you are in winning streaks and a minimum when you are losing. The problem is the dice or cards have no way of knowing they are falling in any particular sequence and they have no obligation to continue in the pattern. Therefore, any new roll of the dice or set of cards has the exact same odds as any other. Your streak is just as likely to end as it is to continue. Still, anybody who has gambled a fair amount can tell you there are those occasions when the cards are especially cold or hot. If the gambler is astute enough to take advantage of the trends he can exaggerate his winnings and subdue his losses. This technique can be very successful in spurts, but it too is mostly a matter of luck and doomed to failure in the long run.
• Cheat. We have all heard stories about somebody who bought off an athlete, a coach or referee in a sporting event. Or, I guess someone could put doggie downers in the food of a lighting-fast greyhound and sway the outcome of a race. People have been known to shave the dice, so that one number is more likely to come up. Black jack dealers have been known to form partnerships with other cheaters and skim money. Others put invisible ink on the back of cards, and so on. This all sounds fascinating, but…I “bet” I don’t have to finish this sentence for you.

Everybody else is a net loser. The more you play the more you lose. The best you can hope for is an occasional good session and a lot of fun for your entertainment dollar. So dump the gambling bug unless you can accept those facts.

The lottery is your very worst gambling value. If you listen to the radio ads in Colorado and other places you will frequently hear this phrase: “Prizes equal 50% of sales.” Put another way, the house (the State) keeps 50% of all the prize money. The ruthless casinos give you much better odds than that. If giving up half the money is not bad enough, the “lucky” winner gets screwed even worse because the Feds and the State take another big chunk of the winnings in the form of income taxes; potentially over 40%. Good God, even the Mafia wouldn’t charge you that much. Still the state preys on the many lottery addicts who buy tickets week after week. Sadly, many of the people who live in this dream world are the ones who can least-afford it.

As far as I am concerned, there is nothing wrong with an occasional visit to Las Vegas or playing poker with friends a couple of nights a year. However, when the topic is wasting money, compulsive gambling is as bad as any other addiction. The hard-core gambler cannot get enough action, win or lose. In the worst cases, these people are known to lose everything they own and to destroy loving relationships. I have known three such addicts personally; two of them went broke and the third person could not get through the day without betting on all sorts of things. Obviously, anybody who has problems like these people needs to consult with qualified counselors before all is lost.

To close out this topic, let’s see if we can agree on something: Occasional small losses (let’s say $50 or so, a few times per year) can be a reasonable price to pay for entertainment at the gaming tables, and going to Vegas or Atlantic City can really be a lot of fun. It is okay to occasionally earmark a reasonable amount of money for this entertainment, but more than once per year, or losing regularly or losing large amounts, or buying any lottery tickets are among the worst things on which we waste our money.

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About Credit Cards, Debit Cards

If you are thinking of getting your first credit card, be sure you know the difference between a debit card and a credit card. A debit card is nothing more than plastic checks. It serves little purpose other than eliminating the need to carry larger amounts of cash around. It does not help your credit rating.

Therefore, a credit card is better than debit card.

Remember these fundamental philosophies:

• Credit can be a best friend or a worst enemy;
• Credit cards are not for incurring or accumulating debt: They are for emergencies, convenience and record keeping only;
• You should use your credit cards to pay for the things you already buy anyway, like gasoline, insurance, and groceries;
• Do not charge things unless you can pay your statement “On Time and In Full” when the bill comes due;
• I suggest you get an account with no annual fee, even if the interest rate is higher.
• The interest rate is not overly relevant if you pay the card in-full every month and thereby avoid paying any interest
• If you are thinking about getting a new credit card, I suggest you check out www.creditcards.com

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