PR Skills Applied to Your Credit Card

A tenet of effective public relations is developing mutually beneficial long-term relationships. In addition to having the ability to network and connect, there are two elements critical to securing results in the PR process: 1) create consistent, compelling positioning and messaging; and 2) promote the message continually and clearly with proof points.

Interestingly, the above advice can be used to save you money. How? By taking a measured approach to negotiating your credit card rates and loans. Read the two below scenarios and choose your plan accordingly:

Scenario 1:
Call your credit card company and demand a lower rate. Provide no justification other than "my debt is out of control" and "I'll never be able to pay this off". Get frustrated and start whimpering when the phone call is looking like a dead end. Before slamming down the phone, lament about "evil credit card companies". Get nowhere. Or perhaps get a minor reduction.

Scenario 2:
Approach attaining a lower credit card rate like pitching a great story. First you'll engage in preliminary research to determine the best rates the company is offering and gather data about your account. Then, you develop talking points for your call including the following: 1) an introductory statement; 2) brief account history with number of years as a client; 3) proof points for your being a good customer like number of bills paid on time, automatic payments you've set up and increase in your credit score; 4) casual mention of competing offers received; 5) ask for a specific reduced rate or "the company's best offer for great customers"; and 6) plan if you're request isn't granted.

Make sure to call when you are at least somewhat relaxed and after having taken a few deep breaths. As soon as she answers, repeat the customer service representative's name and immediately thank "Sally" for her time. (You're getting her on your side and creating a connection.) Go through your talking points in a calm, firm tone. Ask "Sally" if she has any questions. Then reiterate that you "want to remain a good customer" and are "interested in securing the best possible rate" given your relationship.

Synopsis:
Sally is much more likely to come back to you with an offer in Scenario two than number one. When she does, thank her again.

If she doesn't, or gives you a rate that is higher than you expected, ask her what you can do to improve your standing and when would be a good time to call back. Have her document the call and do so yourself. Follow up.

***Notice that part of approaching the rate pitch like a PR pro involves coming to the table with proof points -- your history, payments made on time, credit score enhancement, etc. If your "proof points" aren't there, work on those diligently for six months before you start the negotiation process.***

A Rock Solid Read, And Quite Possibly the World's Only Personal Finance "Beach Book"

I was recently sent the revised edition of Beth Kobliner's Get a Financial Life. Since I created this blog purely for the pleasure of writing about finance and don't accept advertising, I have zero pressure to promote. (I do that enough in my day job running a marketing communications firm.)

If there was ever a work about personal finance that could be described as a "beach book", Get a Financial Life would be it. Beth's style is zippy (my definition of to the point and fun), easy to follow and free of the financial jargon that puts even the most devoted LMF4HMW readers to sleep. This is not to say that Beth is talking down to her readers -- she well navigates the fine line of providing great explanations for key financial terms and avoiding unnecessary diatribes. From budgeting to mortgages and investing to insurances, Beth well covers all of the financial bases. And it's a fun read.

Get a Financial Life is about "personal finance in your twenties and thirties". It certainly puts Gen X and Y on a great track; however, it's also applicable to those who've been around the block a few more times. First, it covers health insurance immediately, which many personal finance books omit or cover after most readers have fallen asleep never to return again. We all need health insurance -- perhaps not the same type, but baseline high deductible coverage is crucial. Health insurance is a financial issue because without it, even your best efforts can be wiped out with a single emergency or severe illness.

Other highlights include actionable advice, crib notes and financial cram sessions. Many books tell you what you should do, but don't offer a road map regarding how. Beth does this very well, and by implementing her suggestions, you can easily pay for the cost of the book and save yourself some serious money. For example, she writes about negotiating better loan and credit card rates (yes, you can do this -- it will be the subject of an upcoming post). And provides financial work sheets like the monthly statement so that you can better understand the in- and outflows of your money.

The "crib notes" are another favorite: chapter one provides an overview of the most important items and allows those perhaps wary of financial reading to be drawn in. (I know I'm biased given my finance "hobby", but anyone who puts the book down after page 11 is really doing herself a disservice.) These crib notes continue in the form of "financial cramming", or summaries of the key points at the end of each chapter. I recommend reading the book actively, and using these cramming bullet points as check-lists (see my December 2008 posting about "Fail to Plan...) as you progress along your road to financial security.

If I had to choose an absolute pinnacle, it would be Beth's explanation and recommendation of index funds (check out my March 2008 posting professing love for them). They're cheaper (you're paying a lower expense ratio given passive management) and over time, tend to perform better than actively managed funds. She talks about finding the "index fund religion" (maybe that's why I like them so much -- they're downright spiritual in their simplicity) and puts it best when she proclaims, "The bottom line: Go with index funds."

The only area of the book I would debate is the discussion of risk and dealing with fear of loss in a 401(k). Beth acknowledges that it's "easy to panic" in a bad market with investment losses, and that timing is tough (if not impossible -- hence my borrowed saying, time in the market; not timing the market). This is true. But she offers that a reader who "feel(s) like" she's taking "too much risk... can shift to money market funds".

Moving money out of fear is not the best strategy. Doing so is basically like trying to time the market -- you think it will get worse, so you pull out. This locks in your losses, and suggests that you'll know when to re-enter. Then you're risking missing out on gains. And so an all too common mistake happens again: "Sell high; buy low". So I revert to my prior postings about hangin' tough, investing like a distance runner, making risk your BFF and most importantly, having a strategy, not a reaction based on feelings.

The above being said, Get a Financial Life is a must read for LMF4HMW readers and their male counterparts. In fact, the only people who shouldn't read it are: 1) boys who've stood you up on dates or not called when they said they would; and 2) the guy who dated me while hiding a fiancée in an emerging market.

Pair this read with an equally zippy, crisp and fun Sauvignon Blanc or Albariño. I like the Martin Codax which is easy to find (imported by Gallo) and light on Beth's budget worksheet at around $13. Both the book and the vino will be a treat oceanside!

To the Hackers Who Suck Productivity Out of Our Society

As the LMF4HMW blogger and small business owner, I have a tremendous appreciation for the benefits afforded to our world by marketplace activities. Businesses create jobs, responsibility, valued products and services and opportunities for advancement in society. They also pay taxes, which fund programs, maintain operations, and help the less fortunate. (I'm resisting the urge to be negative re federal and state spending here.)

Today, I was forced to abandon my small business -- the needs of my clients, following up on proposals written for future revenue, and my personal advancement goals (which included exercising, maintaining calm and running two important errands).

Instead, I spent the last 10 hours trying to fight off a variety of Trojan horse malware viruses installed on my computer by who knows what group of a**holes. The first hour phone call went to my cherished tech support person, who advised me to contact my Trend Micro Antivirus software. The second two hours were spent on hold and speaking to this tech team who determined that particular virus rendered them helpless. The remainder of the hours were spent on four separate calls to Microsoft where a number of scans were run and an incredible amount of support rendered. Approximately 9 hours and 45 minutes after my first phone call, I finally have access to my computer.

I figure the cost of lost productivity and potential business, lost benefits for clients (if I'd made two PR calls and generated two stories, that would represent a big promotional push for them) and my personal time is valued at approximately $5000. And there's no guarantee that the problem is fixed.

So to the people who find it entertaining to create problems for those of us who are trying to create value, I have this to say: There is no punishment strict enough. And there is a special place in hell for all of you. Just because no LMF4HMW reader would spend a moment even considering you -- I just feel hackers must be dorky men, does not give you the right to steal from us.

To my LMF4HMW readers, let this be a reminder to back up your data with a portable drive and online, have anti-virus and malware detection installed, run updates automatically if you're on Windows. Unfortunately, even if you do all of that as I did, you still may get hit. In that case, open a bottle of wine -- I'm enjoying a Dr. Loosen 2007 Riesling which is going down very smoothly -- something a little sweet to combat the tech nightmare I've just endured.

Hangin' Tough - Investment Advice from the Original Boy Band

Usually, the title of a post comes to me after I'm done writing it. But in this case, it came to me during a conversation yesterday with my neighbor, "Carole", who happens to be a very successful business woman in the tech industry.

Carole had come over to ask for help moving a piece of furniture, and we started chatting about her career. She told me that for the first time in her life, she was laid off. It is a frustrating situation, but she's not nearly as worried as I would have imagined, especially for a single mother.

This is because Carole has been maxing her 401k for some time, has plenty of emergency fund savings and a number of interviews already set up. She's been living below her means as a matter of financial course -- Carole is a veritable LMF4HMW rockstar! In fact, her main fear right now is taking her daughter out of school should she need to move for work.

I complimented her on being such a prudent financial manager, and she said, "well, if I were so good, my investments wouldn't be so far down right now. (Sigh.) I just feel like I should pull out of the market before it gets worse, but I know that this move would just lock in my losses."

Carole put it very well: 1) she feels bad (out of control, frustrated, afraid, etc.), but 2) knows changing her strategy would result in an even poorer outcome.

As a woman with 20 plus years until retirement, a strong portfolio of retirement and emergency fund savings, and a strong career ahead, Carole should take her advice net of the feeeeelings: stay put. Or as I so eloquently put it, "hang tough". Selling now will not only lock in her losses but prevent future gain.

For some reason, people can not seem to remember that they own shares in the form of funds or individual stocks (in the case of equities), and that just because the portfolio value is down, does not mean that it can not rise.

Carole doesn't have the luxury of continuing to contribute to her 401(k), but for those LMF4HMW out there who do, it's time to BUY.

Stimulating Stupidity with Socialist Style "Solutions"

It would be funny if it weren't so scary. The government handing out big stimulus checks to states and corporations who are habitually overspending and being inefficient. The government putting a moratorium on foreclosures. The government maintaining the asinine steep regulation for mark to market accounting which requires financial institutions to assign a "fair value" to assets that can be below the actual cash flow they bring.

So what exactly are we supporting and stimulating? Over spending. Propping up companies that should likely go through an extreme overhaul or fail. Artificially supporting individuals who were not good home loan candidates in the first place. Encouraging the very behavior that got us in trouble to begin with.

And why are we doing it? To avoid the unavoidable. Unfortunately, the tough part and the beauty of a free market (although it's getting less so) is that it works its kinks out. Sometimes there is a painful period afterwards. Often ugly things happen. But more often than not, a stronger reality ensues.

This type of "stimulation" is basically giving a drink to a drunk. Or handing another credit card to someone in Shop-aholics Anonymous.

I'm not exactly sure when it became okay to give everyone a participation medal. And make sure nothing uncomfortable or bad ever happened. But this mentality is digging our debt hole deeper and deeper and deeper.

The Unthinkable!

An empty glass of wine?!! Stain on your new outfit? No, it's worse... a missing or stolen laptop. According to Entrepreneur Magazine, business travelers lose 12,000 laptops annually while on the road. I know of three people to whom this has happened. A former Vice President and boss left one in a bar in NYC and luckily got it back. A colleague deplaned without his laptop and thankfully remembered after a few moments. And a small business owner left hers on a plane -- and unfortunately, it was never recovered.

While these three instances represent a mistake on the part of the laptop owner (probably due to the exhaustion of business travel lifestyle or too much beer), theft is another problem. Losing business data, exposing your personal information and major psychological and financial hassle all result. So what's a tired traveler to do? Prevent it -- there are a few good choices:

1. Adeona is a free open source software developed by WSU that can be installed on your system to track it. It's free of charge and they are about to launch a new version incorporating improvements.

2. Companies like Absolute Software and Brigadoon offer paid tracking services with annual fees.
3. Manufacturers like PCLocs sell actual leashes that may be used when in a hotel or cafe.

Wine pairing: Hmm... a safe wine? A technological wine? Nothing really comes to mind so I'll splurge on a Gigondas from France's Rhone Valley. Peppery, fruit forward, and deliciously complex. It can be a little on the pricier said, say around $20 or so, but you've potentially prevented a loss of $1000+ with laptop security so go for it!

Purchasing Power

My how we all wish we had more of it! Unfortunately, there's no quick fix for enhancing your purchasing power -- doing so requires good old fashioned hard work (education or performance for a raise or better job) or a windfall like an inheritance. There is, however, one concept every LMF4HMW reader should understand with regard to her purchasing power: inflation.

Have you ever heard people talk about the "good old days" when bread was $1 and gas was 90 cents? Even if they don't realize it, these folks are discussing inflation, or the increase in general price levels. When price levels rise, your purchasing power falls. So if you continue to make the same amount next year, but your rent or food prices rise by 3%, your purchasing power will decrease accordingly. What's most important is the relative rise in wages, not the price level per say. So if you get a 5% raise and inflation is at 3%, you're actually ahead by 2%.

Inflation is measured by an annual percentage rate and is reported in the consumer and producer price indexes. (Both are available on the Bureau of Labor Statistics website.) You might think that inflation is "bad", but it's normal in a growing economy. If there is none, there is either economic stagnation or weakening.

In addition to affecting your current purchasing power, inflation is an important factor in your future ability to spend. If your investments do not outpace inflation, you'll have decreased purchasing power. Most people make the mistake of forgetting about inflation entirely when looking at their portfolio -- the key is to look at the real rate of return (net of inflation), not the nominal rate.

Wine pairing: Gruet sparkling wine from New Mexico (yep!) is a steal at $13!