By Alexander Carl on July 31, 2010

Guess what— it's a Recession! (But you knew that.) And if you're like almost everyone, you need: a better job, a job that pays more, another job, any job, or all of the above.

This means that one of these days, you'll be landing an interview. The Solvency Shark has noted that prospective employees react to an interview date one of two ways: excitement at the thought of representing themselves, or total dread.

Either way, things could go horribly wrong. Too much self-confidence or too little can be disastrous, so a middle way is what to strive for. Here are some tips for staying in that center lane:

Show up a few minutes early. Four or five minutes early is perfect. Twenty minutes early is creepy. Five minutes late is catastrophic.

Wear appropriate clothes. Your Sunday best works for many positions, but sometimes it's overkill. For a retail or culinary environment, business casual is the way to go.

But emphasize “business” and not “casual”— no tennis shoes, sandals, chewing gum, and keep the exposed skin to a minimum.

Treat your interviewer like a business colleague. He or she is not the Wizard of Oz, and so groveling and shrinking won't help you land the position. Small talk can be good (if it's natural to the situation), but flattery feels fake.

However, your interviewer is not your bud. Don't use his or her first name, use slang or expletives. (Nothing reeks of “unprofessional” like a miscued F-bomb.) Remember, this is a business transaction!

Speak highly of yourself, but don't overdo it. Be proud of your accomplishments, and never minimize your abilities.

But if you expound your awesomeness in ardent hyperbole, no one will believe you, even if it's true. You're here to sell your “service” of employment, not a fantasy of who you are.

Don't crumble. Interviewers tend to ask piercing questions. That's their role. Think of a challenging question as a challenge instead of a threat, and you'll respond appropriately.

Finally:

No over-thinking! Over-planned language and over-rehearsed behavior is painfully obvious. Be in touch with yourself— spontaneity is worth a thousand buzzwords.  

By Alexander Carl on July 31, 2010

The Solvency Shark has often harped on the importance of being informed, whether through your own research or through financial education.

Now, as reported in the New York Times,  a Harvard economist discovered a correlation between the effectiveness of kindergarten teachers and the amount their students save for retirement.

Whoa. You bet. And strangely enough, this correlation wasn't found with teachers at other levels of education— say, middle school or college. This implies that getting a good head start makes a large difference over a lifetime.

The study looked at a group of Tennessee children over a period of about 30 years. The students who learned more in kindergarten were less likely to become single parents, and more likely to go to college than their demographic peers.

In addition, a student's improvement during kindergarten was reflected in how much more money they earned later in life than those who didn't.

What's this all mean? The most useful conclusion is that education is pretty important. We often attribute success to inner gumption, or great circumstances, or just sheer luck, but this study shows that being knowledgeable and knowing how to think pays off, literally.

But it doesn't stop in kindergarten. A great thing about being a human being is how you can keep learning throughout your lifetime, becoming wiser and more experienced.

Not all of us learned things “the first time around”, and everyone has made mistakes, especially financial mistakes. While it appears that a good early education could “destine” a person for a good life, not having one does not “doom” you.

The important thing is to keep learning. A bankruptcy or a foreclosure means that you “failed” only if you didn't learn anything from it. Where did you slip up? What will you do differently in the future? What do you need to know to make better decisions?

If you can answer those questions, the past doesn't matter too much— you're taking the initiative to educate yourself. That's a wonderful thing.

How do I do it? By visiting this website, you're already on your way! Look around and ask questions. 

By Alexander Carl on July 30, 2010

The Solvency Shark recently overhead a conversation in which a woman recounted how she lost $1200 gambling in Biloxi (“which is a lot for me,” she said), and then made $1800 the next night. “So really, I won.”

This got the S.S. wondering: can you actually make money gambling in the long-term?

(Before we begin, understand that the answer is no. Nobody claims that setting foot in a casino is a productive way to manage your money!)

The reason people gamble in the first place (whether betting, playing the lottery or casino games) is the chance of a large payout. We hear stories about lottery winners, or see casino visitors toting buckets of tokens, and think, “that could be me!”

Odds are you won't be, literally. Sure, big payouts happen from time to time. Like the woman in Biloxi, you could make money in the short-term (that is, if you gamble in just a few instances). But there are two big things going against you—

It's really difficult to gamble “a little”. Have you ever heard of a person playing video poker “once or twice,” or popping into a casino “just for a few minutes”?

Gambling is intoxicating! It's supposed to be. Those who run the games want to maximize your time playing. Which leads me to how:

The odds always benefit the house. The folks who designed gambling games weren't imbeciles— if mega payouts were common, they'd be bankrupt in a matter of minutes.

Instead, each game of “chance” benefits the house after many repetitions. Their long-term payout is called the house edge, commonly known as the vigorish.

While a few games have tiny edges (blackjack yields only a 0.5% profit), most have “interest” rates that make credit card companies envious: roulette is around 5%, slot machines around 15%, and keno around 25%!

But can't you beat the odds with strategy? Yes, but to a tiny degree, and mostly in the short-term. Long-term, the house still rules.

Well, you're no fun. Sorry. Any money you plan to gamble, you might as well assume is already gone.

There's a better way to grow your money, with greater possible payouts: investments.

By Alexander Carl on July 28, 2010

It's easy to cut back— all you have to do is declare it. “I'm cutting back on eating out/movies/pedicures”, etc. But the best way to hold yourself to your intent is to budget.

Yeah, I know how to do that. And you're probably right. But here's an important question: are you?

Life is more than time between bills. Shouldn't your finances reflect that? Sure, anyone with adequate income can deposit their paycheck, pay their bills, and stash away a bit of savings on occasion. But in a time of crisis (you lose your job, a medical emergency) will that be effective? Will you have enough to live on?

Probably not. But don't be afraid. This is your call to action:

Figure out what you spend in a week. Don't leave out anything! Include gas, food (from both supermarkets and restaurants), clothes, “fun stuff”, even that Coke from a vending machine. Break it down by category.

Translate that into what you spend in a month. Now we're adding in bills and rent, or mortgage payments.

Subtract what you spend during a pay period from your paycheck. That's how much you have left over.

How much are putting into savings, again? (And that remainder doesn't include credit card debt, which is accruing interest. Nor does it include annual taxes!)

You should be seeing a lot of “gunk”. If you're not, then either you're super-frugal or you're lying. Gunk includes restaurant bills, bar tabs, StarCraft II, that Netflix subscription you barely use, shopping at a luxury grocery store...

It's nothing that you need to have, but would like to have.

Look at your credit card bill, and you'll probably find more gunk as debt, which means it's still costing you money after its purchase!

The key to budgeting is setting aside money, so that it doesn't go to gunk. That's it. By giving yourself specific limits, you're always in control of your finances. You can even set aside a “gunk” fund, but it better not be too big. 

Always leave some room for savings. If it's part of a weekly budget, it will silently grow. 

By Alexander Carl on July 21, 2010

If you keep up with financial news, you know that President Obama just signed a massive regulation bill designed to protect consumers and investors from unscrupulous practices.

This new law brings to light a practice many consumers don't know about: debit card fees for businesses.

What are they? Every time an account holder swipes a debit card, about 2 cents per dollar is sent to the creditor that issues that card. (The logo on your debit card tells you which, i.e. Visa or MasterCard).

These cents are (allegedly) used to pay the firms that manage the electronic transaction, as well as any related maintenance costs incurred by the credit company.

Why are they going away? Needless to say, the fees are very unpopular among business owners. They cut into profits, especially when customers visit a business multiple times a day.

The new law asks the Federal Reserve to determine what levels of fees are appropriate. This is supposed to support businesses, which in turn will support consumers.

So, this is good news? It could be, but probably not.

Bank of America claims that it could lose $2.3 billion without the transaction fees. (Bear in mind that BoA posted a $15 billion profit in 2007, and even eked out a $4 billion profit in 2008, during the financial meltdown.)

Banks don't like to lose money, so consumers might end up absorbing the fees themselves. This could mean a charge for opening a debit account, or cardholder fees on every transaction.

What about lower costs at stores? It could happen, and more money could flow through small businesses. But given human nature, retailers will likely relish in their decreased expenses. That's not always reflected in the costs of goods and services.

Well, shoot. What are consumers supposed to do? Not much, except keep your hopes high. Meanwhile, you can

Go credit union. They focus on account holder services instead of profits.

Shop at the right places. One cool provision of the overhaul bill is that it allows retailers to give discounts to customers who use cash or checks. Be on the lookout to see where this happens.