1) It would not fix their flawed business models
GM workers earn and average of $70/hr in pay and benefits.  That is simply too much.  Thats more than (in the US) the average engineer, construction worker, teacher, project manager and blogger (ha!).  Its not just assembly line workers either, the CEO Richard Wagoner makes about $24 million a year.

GM goes through $2 billion a month.  A month!  What good would 8 billion do them?  Then there are the huge pension plans that no other industry could possibly afford to give.

2) Their cars aren’t very competitive
Guess which of the big three are on Kelley Blue Book’s top 10 brands?  That’s right, none.  They don’t hold their value and don’t stand up for the most part to similar foreign cars.

3) The idea that it would help American workers is a sham
The automakers are already outsourcing.  See Ford’s 3 billion plant they are going to build in Mexico city. (The biggest foreign investment in Mexico’s history).

4) Government car bailouts have been tried and they DONT WORK
In England Leyland car company has having problems identical to our big 3.  They owned over 1/3 of the entire market share.  The government put in 16 billion to keep them afloat. So who here has heard of Leyland?  Any takers?  That’s because they went out of business anyway.

“Jesse,

Are you around?  This may seem weird but I am starting to get mad at you not posting, sort of like a penpal that doesnt write back…especially since this is the weirdest/hardest financial time we have seen in this country in ages.  Ok enough weird emails to bloggers that don’t know me

Josh
PS please post”

Well to the delight of many of you, and the consternation of a few of you you, I am alive and better than ever.  I haven’t quit blogging, I have just slowed down lately because I have had a son on the way and he was born this week!   Jackson Lee:

Lauren and Jackson are both doing great.  Thanks to everyone for the concern as to my whereabouts.  I have a bunch of articles that I am just finishing and I finally finished the ebooks I have been promising so look for them to come sometime this week!

Engine Coolant

Your car’s coolant system isn’t just to keep your car from overheating, it’s also to keep corrosion away.  Obviously in the winter, you also can’t have the cooling system freezing. For winter, you want a mix of about 50% ethylene glycol, 50% water depending on your climate.  Here in Colorado we are fairly average so most people run 50/50 all year long.  The colder your climate, the more glycol you want in the mix because it has a much lower freezing temperature than water.  Check your owner’s manual for what kind of coolant you need.  If you are in a climate such as colorado chances are you probably don’t have to do much more than make sure your radiator and reservoir are filled with the correct mix.

Engine Oil

The oil in your engine changes depending the tempertature of your engine as it runs. This is almost directly purportional to the temperature outsite, minus a few factors.  What does this mean? It means depending on the climate, you will have to run different kinds of oils.

Once again a moderate climate like Colorado means you probably don’t have to change your oil type for the winter.  The most common oil is 10w-30 and a slightly thinner (better for winter since it is thinner, making it less likely to ‘muck’ up the engine if temperatures get really cold).  The truth is unless you live in an extreme climate, 10w-30 can get you through year round.  Always check your owners manual to make sure your car doesn’t take something exotic

Windshield Wiper Fluid

Fill it.  To the Top.

Windhsield Wiper blades

If they are showing any signs of wear, replace them.  I usually dont spring for more expensive winter blades, the truth is that the best blade is the one that doesnt leave spots or smudges.

Battery

The biggest thing to check for is corrosion.  Does it seems like “gunk” has built up around your battery cables?  Time to disconnect the battery and clean it off.  Cold weather is hard on batteries and if it has been a long time since you have replaced your battery it is a good idea to get a new one.

Tires

Check for worn tires.  Snow and ice can be dangerous so it is important to make sure your tires have a good amount of tread left.  You can spring for winter tires, but I believe a good set of all season radials is better investment as they will also work well in winter…and you can keep them for summer.

As you can tell, winterizing your car is not that difficult.  The idea is to make sure things are working properly before it gets nasty outside.  Working on a car on a nice fall day is 100X better than working on a car in a snowbank so dont tempt fate!

If you purchase: Bit-O-Honey, Laffy Taffy, Wonka Nerds Rope, Nips, Nestle Crunch, and others you can save $15 on purchase of $39 or more.

Walgreens Halloween Candy Couponss:
According a few informants Walgreens may have a limited number of buy one get one free coupons available in-store so check that out.

Shinndigz Halloween Coupons - offering free shipping on Halloween costume orders $30+ with coupon code: CSCJF8 (Exp 9/30).

SpiritHalloween.com Halloween coupons use the following coupon codes:
Free shipping on orders $75+ (Exp 10/5) stacks with… 10% off your order with coupon code: SPAF10P (Exp 10/28)
20% off any one item with coupon code: SPAF20P (Exp 10/31)

BuyCostumes.com Halloween coupons - use the following coupon codes:
Take 10% off orders $50+ with coupon code: ZOMBIE50 (Exp 10/31)
10% off Animal Planet coupons with coupon code: AP10 (Exp 10/17)
Free shipping on orders $65+

If anyone finds anything else good, let me know or just post em below

1) The lender is not your friend. He/she is going to do whatever they can to maximize the money they make. They do not have your best interests at heart. Just ask all the people with ARMs that are resetting now.

2) Most mortgage companies are the same. Rates and costs tend to even out, they are all fairly equally sharkish in their practices.

3) Your loan is probably going to be sold. If mortgages were a pile of dirt (and with all junk going on lately in the mortgage market, some of them really are) the big banks would be giant vacuums sucking up most of them.

4) Its easy to forget the costs of buying a house are not just the purchase price. Closing costs are huge. We had thousands in closing costs including: appraisal, inspections, broker fee, rate lock, underwriting, title search and examination, survey fee, and a bunch of other crap.

5) The rates you see assume great credit. Most people do not have good enough credit to qualify for the absolute top rates…especially as lenders are cracking down on it.

Bonus: Be careful when you “lock in” your rate. With the market turmoil last week the rates went all the way from 6.25% down to 5.75% and back up to 6.7%. We locked in at 6% and were not too thrilled when the lender would not let us relock when the next day rates went down a quarter point. On the upside, we actually got away pretty cleanly since rates went up considerably since then.

1) Its dangerous - for you, for me, for the entire country.  A run on the stock market is just like a run on anything else: it disrupts the economy and is bad for everyone.  If I take all of my money out, it will drop and further push Joe to take all his money out which creates a bigger drop and so the cycle continues.  There are some things in place to make sure there is not the kind of massive crash that happened on black Tuesday but essentially our biggest enemy right now is fear.

2) Regardless of what happens right now, the market will go back up.  This is not the case for each individual company, but assuming you have diversified investments and are invested in index funds, you will see brighter days in the future, I promise.

3) As of this writing, the dow is under 10k and you and I have both already lost a massive amount.  Unless there is a total and complete collapse of the markets I think the probable bottom of the market is not too far off.

Let me reiterate: Despite what you might hear, we are NOT on the brink of financial apocalypse.  History will not repeat itself.

When the risky lending of the 1920s happened, there was a striking difference between what they were borrowing against and what the risky lenders of today have borrowed against.  I was fairly shocked to learn that in the 20s the risky loans were borrowed against STOCK.  Thats right, something that has the ability to go to absolutely zero worth.

Now lets contrast that with the ridiculous lending thats happening today.  The risky loans were put up with REAL ESTATE as collateral.

Lets put two and two together: we cannot replicate conditions leading to the great crash of 1930 unless real estate value goes to absolute zero.  This has never in history happened….quite the contrary land is the one thing throughout history that has held some sort of value.  Though the real estate is overvalued and correcting, it will not go to absolute zero.

Another huge difference is that back then there were absolutely no insured deposits.  There was no FDIC.  People that had any money in banks and were unable to withdraw it lost everything.  Thats simply not possible today.

There have been tough times before (Tech crash anyone?) but do not panic.  Stay the course and stick to personal finance fundamentals: reduce debts, save, invest, and keep your head above water.

Before I do anything, I want you to see the sub prime primer which describes what sub prime mortgages are and the trouble they caused.  One word of caution, it is PG-13 rated for swearing.

Now back to our present situation: what exactly is going on with the bailout bill?

The banks do not have enough liquidity (essentially cash on hand or cash easily obtainable) to cover their expenses.  The government claims that the market will grind to a halt unless we, the taxpayers take over the bad mortgage debts of these banks so that they can keep doing “good” loans.  There is a major problem with this, as pointed out by one of my friends.  This is something worse than socialism, this is blatant corporatism.

What is corporatism?  It is merger of state and private enterprise.  Thats exactly what Fannie Mae and Freddy Mac are, and they are what put us in this situation.  We as a country hold freedom as our #1 assett.  The problem is that people from time to time forget that freedom not only means freedom to succeed, it also means freedom to fail.  Our government has, apparently, forgotten this.  If a company can make terrible and risky investments, but is then bailed out by the government, where is the freedom to fail there?

Here is the Penny Saved’s plan instead of forcing the taxpayers to pay for irresponsible “bailouts”:  

1) No taxpayer funded bailout in the sense of letting lenders off the hook. A chunk of money to buy only what is necessary to restore liquidity but it must be at market rates: not full price or anywhere near full price.  I was stunned to hear of some banks supposedly on the brink of collapse saying (allegedly) that they wouldn’t settle for “less than 70 cents on the dollar from the government” for this debt.  You’ve got to be kidding me! Lenders too seriously in trouble do the old thing: file bankruptcy and sell off their bad debt for whatever the market will pay for it.

2) Increase FDIC insurance to encourage people to deposit their money in banks and not “cut and run.”  The currently proposed 250k cap is a good start but it should be closer to 500k.  This would also increase liquidity for banks that are strong earners but are currently struggling with liquidity.

3) Restore pre-Acorn lending practices.  No government backed private enterprises.  Total market accountability.

4) Provide limited financial assistance to middle class mortgage holders in the form of additional tax breaks for home ownership and temporary stay of payment until they can acquire a new mortgage and refinance.  If they cannot, they will have to face foreclosure for borrowing that which they could not pay back.

5) Penalties for those executives at the top that mismanaged.  This should be covered as an extension under fraud laws particularly with Fannie and Freddy being taxpayer backed.  Absolutely no golden parachutes.

It seems the number one thing we have forgotten in all of this is personal responsibility.  Everyone blames everyone else.  I was appalled to see Barney Frank pointing fingers when he was in charge of overseeing Fannie and Freddy! It sickens me to see the country paying a price for the greed of very small minority.  As Lauren said to me about Fannie and Freddy: “Hmm how come insider trading gets Martha Stewart in jail, but it is legal for politicians and their appointees to get away with what they do?”  Good question indeed…

-Upgrading our second receiver from regular to HD-DVR for the bedroom
-Adding a HD-Receiver to the loft
-Adding a HD-Receiver to the office

All of this was going to cost a total of $130.

Seeing as I always preach to try and ask for deals, I figured I’d better try and strike a deal. The conversation went like this:

Jesse: “$130 huh?  Hmm, thats a little expensive”
Directv lady: “Well sir, you are getting quite a few upgrades and changes to your service.  I’ll go ahead and get that going…”
Jesse: “(interrupting), well I need to check and see what all our options are before I commit to anything.  I can call back later on.”
Directv lady: “We might be able to get you an upgrade in here for free.  How about a free move and free upgrade to HD DVR for the second receiver?”
Jesse: “Can you add and upgrade the other two for free as well.”
Directv lady: “let me see what I can do….<away for a few mins>….ok sir, we can do all that as well.”

Followed by her setting up the move.  We’re about to get off the phone then I say:

Jesse: “So when we first started our package was cheaper, why was that?”
DTVL: “That was an introductory package.”
Jesse: “I want to get back on that”
DTVL: (silence)
Jesse: (silence)
DTVL: “Well sir, that was an introductory package”
Jesse: “Im moving, thats sort of like starting over”
DTVL: “Let me check what we have…”

Boom $20 off every month for the next six months, at which point I will call again and ask for another discount.  $120 right there.  But we’re not done.

DTVL: “Thank you for choosing directv, is there anything else I can help you with.”
Jesse: “Yeah I will be missing a week of NFL Sunday ticket, I would like to get a discount on it.”
DTVL: (sigh)

$60 off Sunday Ticket. 

Total savings: $310 

Go forth and get deals.

In fact it is nothing you will see on any of those “How to make money/save money/be frugal/whatever” websites.   Its something much simpler.

Ok, I will stop dragging this out, for those of you that get annoyed when I don’t get to the punchline in the first few sentences of my paragraphs (And you would be surprised, some readers get very annoyed with me for that.  C’est la vie, eh?).  Its a little thing called:

Learn to be handy.

I know that there is at least a certain percentage of people that immediately dismissed this as soon as I said it, but its downright true.  A couple weekends ago Lauren’s car stopped driving in the middle of an intersection.  It didn’t die, it simply stopped going.  Instead of immediately calling a tow truck and having the car towed to the nearest garage and having them diagnose and fix the problem (Ill get to shop estimates later.  The Stealership wanted over $800 just to fix it)  I nursed it into the nearest parking lot.

I began to take some mental notes about how the car was behaving.  Since the engine would not rev my first thought was a fuel problem.  This is your first step to saving money.  In order to pinpoint common problems you need to figure out where the problem is originating from.  I did not smell gas and the car was remaining on despite the lack of response from the throttle.  This made me less suspicious of a fuel related problem because generally if there is a fuel problem the car will not run, or will be very sporadic.

I also pushed transmission problems to the back of my mind because of the lack of engine revving, and the gears would still shift flawlessly between drive where it would creep forward and reverse where it would creep backward.  Next (several times) I shut the car off and restarted it.  It labored to start, and the lights dimmed a lot.  Aha! We’re on to something.

If funny things are happening with your electrical there are 2 major culprits: battery and alternator.  Your alternator is the piece of your car that recharges the battery while the car is running.  It has a drive belt hooked to it which turns a wheel, which generates the electricity to charge the battery.  In our case, I had just replaced the battery recently so I had a strong suspicion that it was the alternator.  Which brings me to my next points:

DO NOT PAY TO HAVE YOUR ALTERNATOR TESTED IF YOU THINK IT IS BAD. Places like Autozone will test it for you for free.  I had my dad come and give Lauren a ride home and then use his battery to charge our battery for a while. (Heres another tip: you can recharge a battery just by doing what you would do to jump start a dead battery, hook positive to positive and negative to negative.  This is something that confuses a lot of people, but you want to create a parallel circuit).  Lo and behold, the car would drive after some charging so I drove over to autozone and sure enough, alternator dead as a doornail.

Now we know what is broken, oh Lord, what next?

I will just tell you, I wanted to be lazy about it because we have so much else going on and have a shop do it, so I called around and there was nothing less than $500.  The Stealership as I mentioned earlier wanted $800+ to fix it.  So guess what, time to do some car work.  I know it can sound like an overwhelming task but the truth is working on cars is more method than anything else.  They are very complex machines, but for a lot of common car problems, the fixes are fairly easy.  So if you don’t know where to start, heres some steps for you:

1) Find the shop manual for your car - Most of these can be found online and they are very different from the owners manual, or even the owners repair manuals.  These things are huge, usually thousand pages or so.  I found the PDF for Lauren’s altima online for $10.

2) Determine if it is something you believe you can do - There are some things you just wont be able to do.  For example, anything involving the engine block.  There are plenty of common ones that are very fixable though: alternators, fuel pumps, fuel filters, radiators, brakes, batteries, water pumps etc.

3) Consider the age of your car - As a general rule older cars are easier to work on.  This isn’t to say you cant work on new cars, Laurens car is a newer Altima and I have even done work on my 2007 350Z.

4) If you are nervous, document every step -  A car is just a huge assembly of parts.  Thats all it is.  Note how and where you took everything off, and you will have an easy time putting it back together.

5) Dont get frustrated - There is always 1 bolt that does NOT want to come off.  Make sure to use the right size wrench so as not to strip it.  If you need more leverage, here is a little trick, get a piece of pipe (PVC, copper, whatever) and put it over the wrench handle to essentially extend the size of the lever.  Force over distance my friends.

 6) Ask for help - If you are stuck or frustrated, you must have at least one handy friend that you can convince to come over and help….after all, a dinner and some beer in payment is still better than an $800 repair bill.

It took me a good solid 8 hours to fix everything on her car, but I managed to do it for parts only.  The total cost?  $150.  If you figure time invested 8 hours for $800, thats $100/hr after tax that my labor was worth.

“Hi Jesse,
I admit I feel kind of weird writing to a guy on the internet that I dont know (but I know a lot about your life at least, does that count?) but I feel like I need to.  I have been reading financial websites for a while and I find you to be the most down to earth and real of most sites.  Some of “huge” financial sites seem sort of idealistic.  Anyway whatever.  I am writing because my wife and I are in a very difficult situation that we take full responsibility for but we do not know what to do from here.   We are both in our early 30s and we both make about 90k per year, so you would think that we are living large, but quite the opposite, we can’t even afford groceries.  See, a few years ago when we both were promoted.  We bought a house here in California for 600k.  Its by no means a mansion, housing is just very expensive here.  Then we went on a vacation that cost about 8k, which we put on credit cards.  It just spiraled out of control from there and we found ourselves with 40k in debt + 30k in student loans.  We did a consolidation loan and got one fixed payment on the 40k at a good rate.  The problem is, we have charged our credit cards back up to about 10k.  Should we get another consolidation loan?  You have everything, houses, a nice car, and now a baby.  We make a lot of money but our minimum payments take up most of our income!  I called some hot line and ended up hanging up because first I felt stupid then after sitting through a fairly humiliating interview they told me they could help at a cost of $20 an hour!  How is that helping, I need $20 for food and gas right now.  We would like to sell our house to get rid of that but housing prices have dropped it I don’t even think we can get out of it what we bought it for.  I have to tell you, Im hopeless right now.  My wife and I fight about money every day.

Thank you for your website, I am depressed when I see your stock picks because I know I will probably never be out of this debt to even try investing in any of them.  But I appreciate it anyway.

Thanks,
Grant

PS you can publish this if you want, I know sometimes you tell reader stories.  I guess I can be what not to do.

Before I respond I am going to give a little bit of a primer for anyone who needs it:

Consolidation loans are loans that are supposed to work like this: Take one of these loans out. Pay all of your different credit card debt and other debt down with the loan. Pay one monthly payment with a lower interest than what you were paying before. Its all good then, right?

It’s only a good deal if you create a budget and stop spending. Grant has fallen into the most common trap in with consolidation loans: consolidating and then spending like its business as usual and running the credit cards back up. So now they have their new credit card debt AND their consolidation loan debt.

Getting back on track, here was my response to Grant:

Grant,

Thanks for writing, I appreciate you taking the time to write in.  There is no shame in talking about money issues, money is still a huge worry for me, especially with all of the things I have going on that you mentioned.  I appreciate the compliments, but Im sure my fiance would tell you I do not always have everything together :)  That being said, there are people that subsist on 1/10 of your income so I am glad you realize that this is your responsibility to take care of.

You have one major problem:

You HAVE to alter your spending habits.  That is the only way that anything will change.  Trust me, I know how hard it is.  I still have problems locking down to a budget.  It’s a tough thing to do but it is necessary, especially in your case.  Thats #1.  Cut up every one of those credit cards, right now.  Every consolidation loan in the world can’t stop you from spending more than you earn.  That is your job, and your job alone.

Next step: time for some drastic measures.  The absolute first thing to do is to pay down that credit card balance.  Do you have anything you can sell?  Time to start.  You mentioned gas money, well, when you are in that big of a hole, its time to stop driving if its possible.  You are in “bike 10 miles to work” territory…or public transportation if possible.  Since you do not have kids to worry about yet, you need to go to some extreme measures to get that debt down, especially if you can barely afford groceries.  If you have to get a second job on the weekend doing manual labor even, do it.  I assure you, being burned out from working all the time will be a much better fate than defaulting or filing for bankruptcy.

I want to stress something else too: you sound pretty hopeless, and let me tell you, there is hope.  If there is one thing I have learned in life its that things always get better and there is always hope.  The key is taking charge of your situation and doing whatever is necessary to get the problem fixed.  You can do it.  In fact, send me your paypal address and I will buy you 1 share of stock in one of my picks.

As far as the credit counseling goes, remember, credit counseling is code for “fraud” and is just another thing to siphon money.  Good luck man, if there is anything I can do to help, let me know and keep me updated.  Im sure readers will appreciate your story so I am going to post it, not as an example of what not to do, but to show what can be done.

Jesse