Brian McLane

Media and Social Commentary

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DEALING WITH PEGGY – FIGHTING FOR OUR CREDIT AND OUR KIDS’ FUTURES

October 29th, 2010 · 1 Comment · Social Commentary

I was so fascinated by the recent 60 minutes report on “the 99’ers (see previous post here) that I can’t get it out of my head. It wasn’t revelatory because I’d taken to paying down my debt five years ago. However, now that I have Sofia and Nodari to worry about, the concept of security is staring me in the face again. Perhaps this is the way it should be, as a nation, to keep our finances front and center and not allow our heads to get stuck in the sand.

OMG, I’m actually watching Consuelo Mack on Public Television!

One thing that was revelatory however was the fact that while I was paying my credit cards off, my credit score went steadily up. As I started knocking off the accounts (i.e. getting them to a zero balance), I noticed that my credit score went down. Further, despite going through the motions and asking several times for letters from these banks and card companies – they refuse to provide evidence of such despite telling me “it’s in the mail.” And just for good measure, they’ll leave the account open at a zero balance though I have asked several times for it to be closed and removed from reporting.

They say they can report it as closed (gee thanks), but they have the right to report it for up to seven years.

The reporting agencies (Trans Union, Experian and Equifax), not only had data that was way out of date (like my working at a job I left six years previous – Brown Raysman), make it extremely difficult to fix these inaccuracies. And while I have vowed regardless of my credit score, to never get caught in that position again, I will be adversely affect by finishing off my debt repayment plan.

I’m not one of the guys that ran from his debt, didn’t declare bankruptcy, didn’t default on my mortgage – and I’m not judging here. Everyone has their unique circumstances. But the bottom line is I will be prevented from buying that house, or car, etc., which keeps the economy down – unless I get on the phone and get bounced around for hours by the like’s of “Peggy” – the terrific ad campaign created by the Martin Agency for – ironically, Discover Card.

I take up this fight really not even for myself at this point. I’m thinking in terms of financial and estate planning for the first time in my life and am fighting for my kids’ future. It’s not so easy to just try and pay the bills and think that everything’s going to be alright. There are a myriad of traps and frankly, there is little compassion at the institutional level to see the average Joe through.

The Fair Credit Reporting Act doesn’t seem to give consumers in my postion enough recourse to practically combat not only the reporting agencies but the credit card companies we were once indebted to. It’s like we’re being punished for leaving or saying, I don’t want to do this anymore.

Whether it was Scottrade or E-Surance, the internet boom had it’s effect on the way that people planned for their family’s economic future, and perhaps negatively so. I wondered why people became accountants or stockbrokers anymore around 2000. Well that question seems to have been answer in 2008 when there was no place to hide and the investment strategy was to liquidate.

Add to that a market period of shifting wealth from East to West, as well as all the people who got caught with their “Pants On The Ground” spending on credit rather than saving – and the die was cast. Now I personally didn’t go nuts comparatively, but still got caught with over $23,000 worth of credit card debt because I bought into excitement and promise of technology. And to be sure I’m still fascinated by the content driven, data centric universe. But the internet bubble burst long ago though Apple and Google seem to continue to grow (don’t know why Microsoft never seems to go up), but just look at all the empty buildings in silicon valley. This is in part due to the way people have become slaves to the media in almost cult-like fashion as the average person’s access to information has evolved.

But this isn’t a post on the New World Order, thought it does seem there is an intelligent design to everything I’ve discussed so far.

What the world eventually was forced to realize was that the market’s fundamentals were haywire. And people ultimately said I’m selling – I’m not doing this. And like at the beginning of commerce thousands of years ago, people actually started asking what’s this worth and saying what they were willing or not willing to pay for something.

Now, assuming we can get to the point where we invest and get dividends (and who knows do companies still offer pensions?), I would see a professional that I trust. Because ultimately, I’m buying them first and not the financial products. It’s going to have to be heavy on savings. I can’t imagine how people can still spend though life does go on, Christmas comes around, and we want to be happy. It’s just finding that right balance though so that I’m not living off social security (assuming that still exists), in a trailer park when I’m retired.

I remember when I was a kid I used to play a game called “stock market” with my friends Jeff Robinson and Lenny Linsker (both very successful btw – Harvard and Johns Hopkins). It was like a financial version of monopoly (I wonder if one can find it on ebay). So even when I was growing up, my mom and step-father, even my friends as a little kid, brought us up in a world of dividends, pensions and so on.

But post-Madoff, the word 401(k) is practically a dirty word. I interviewed recently to test the waters and the HR Administrator sheepishly brought the term up (almost reluctantly). It’s no longer the gift that keeps giving.

What is necessary and what we need to trust in is that those companies that have our money are able to managing risk, by investing in company’s that can grow, generate cash flow, pay back dividends and re-invest in the company. Then maybe we can live out that vision of retirement that seemingly disappeared in the end of the last century.

There is an upside, according to Standard & Poor’s, Stock buybacks are increasing from a record low in 2009 which is a good indicator that businesses are getting their collective feet under them.

Until then, how am I going to invest in anything, be it a car or a stock when I’m dealing with Peggy times ten?

Here’s “Peggy”.

DEALING WITH PEGGY - FIGHTING FOR OUR CREDIT WORTHINESS AND OUR KIDS' FUTURES

DEALING WITH PEGGY - FIGHTING FOR OUR CREDIT WORTHINESS AND OUR KIDS' FUTURES

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