We all have them. Wants and desires that take us off track from our long term goals and plans. Trips, cars, clothing, electronic devises, trinkets and toys. All can be a siren's song to lure us into making a purchase.
Here is a summary of the actions one person took to reduce the wants.
Caution! Unless you're really ready to dive in to win, some of these may appear radical.
Ready? Here they are:
No TV. We have DVDs, but no cable. Not watching commercials really helps you not see what you're "missing."
Don't go to the mall-- for the same reason. It's not fun when I know I really can't buy much, so it's better if I just stay out of the mall and don't breed discontentment.
Don't visit websites where you used to do online shopping, read blogs or whatever that make you think of things you want.
Pinterest is a difficult one for me-- I tend to want to do a bunch of DIY or home decor stuff that I just can't afford right now. I do still look, but try to limit the time on whatever site(s) give you trouble.
Tell yourself that if you cut back now, you can buy XYZ eventually without any guilt. I'm hoping that after living this way for a while, I won't want XYZ all the time anyway.
Don't read magazines if they make you want stuff-- again, the ones that get me are BHG, or other home decor type magazines. Also don't look at catalogs that come in the mail. If you know you aren't going to buy, don't even look-- straight to the trash.
Delete coupon/sales ads in your email inbox. Remove yourself from their mailing list. You can always sign back up, but for now the coupons won't be a constant reminder/temptation to shop. There's a reason they send those out-- why make things harder for yourself?
Start clearing stuff out for a yard sale.
There's nothing that curbs the shopping tendency like seeing how much STUFF you have that you don't use or want. A lot of my stuff for the sale was almost new-- crazy.
So there you have it. Radical? In a certain way, yes.
But not impossible and kooky going off the grid. But by approaching life differently, it can be a recipe for winning.
I think gratefulness is one of the keys to contentment. One thing you have to break in this process is your sense of entitlement. Working with people who struggle in life is a good way to break it. You can quickly go from "I deserve this because I work hard" to "I think I'll just be thankful today".
This type of thought process can really assist you in treading the balance of being a penny pinching curmudgeon (which actually is probably related to materialism) and a careless spender. You can enjoy what you have, plan well for the future, and give when you are grateful.
Chris Johnston is a Dave Ramsey Certified Coach in Central Ohio. Learn more about how you can get one to one coaching and begin winning with money by calling 614-296-7177 or by emailing chrisjohnstoncoaching@gmail.com
Wednesday, August 15, 2012
Thursday, May 5, 2011
Salon Article on Countywide
Angel Mozilo and Countrywide: A tale of greed and folly
The CEO knew exactly how toxic his company's loans were. But that's not what he told the general public
By Andrew Leonard
"We ensure our ongoing access to the secondary mortgage market by consistently producing quality mortgages... We make significant investments in personnel and technology to ensure the quality of our mortgage loan production." (From Countrywide's 2005 Form 10-K)
Poor Angelo Mozilo. The "left-wing anti-business press" that the former CEO of Countrywide once blamed for making too much of a fuss about his excessive compensation is about to have another field day. On Thursday, the Securities and Exchange Commission formally accused him of fraud; specifically, of misrepresenting the kind of mortgage loans his company made as the housing boom began to lose steam.
At first glance, the SEC's case appears damning. As early as September 2004, Mozilo and two other top Countrywide executives were aware that the company was making increasingly risky loans. Indeed, the impression one gets of Mozilo from the SEC's complaint is that the CEO knew exactly how crappy the loans Countrywide made were. At one point, he called Countrywide's "80/20" loans (in which one loan is made for the first 80 percent of the purchase and then a second "piggyback" loan for the remaining 20 percent) the most "toxic product" he had ever seen in his years in the business. Mozilo was also appalled at the spread of "Pay-Option adjustable rate mortgages" that allowed borrowers to make minimum payments that didn't even cover accruing interest. He sent numerous e-mails to other executives warning that default rates were sure to balloon on these mortgage products, and tried to stop Countrywide from even offering them.
He also knew that it would get harder and harder to pool these loans and sell them as securities to Wall Street investors, and worried that if the real estate market took a dive, Countrywide would face major liquidity issues. (He was right!)
All this makes sense. As CEO of the biggest mortgage lender in the country and a man with decades of experience in the industry, Mozilo had a better vantage point than just about anyone to see what was happening in the mortgage business. But armed with that knowledge, what did he and his fellow executives do? They told investors and the general public that nothing was wrong. Mere days after railing about the danger of Pay-Option ARMS, Mozilo gave a speech at a conference extolling their value. In documents filed with the SEC in 2005, 2006, 2007, Countrywide asserted that it was different from its competitors because of the high quality of its loans. In other words, Mozilo lied through his teeth, time and again, and the SEC has him to dead to rights.
From the complaint:
From 2005 through 2007, Mozilo, along with David Sambol, chief operating officer and president, and Eric Sieracki, chief financial officer, held Countrywide out as primarily a maker of prime quality mortgage loans, qualitatively different from competitors who engaged primarily in riskier lending. To support this false characterization, Mozilo, Sieracki, and Sambol hid from investors that Countrywide, in an effort to increase market share, engaged in an unprecedented expansion of its underwriting guidelines from 2005 and into 2007. Specifically, Countrywide developed what was referred to as a "supermarket" strategy, where it attempted to offer any product that was offered by any competitor. By the end of 2006, Countrywide's underwriting guidelines were as wide as they had ever been, and Countrywide was writing riskier and riskier loans. Even these expansive underwriting guidelines were not sufficient to support Countrywide's desired growth, so Countrywide wrote an increasing number of loans as "exceptions" that failed to meet its already wide underwriting guidelines even though exception loans had a higher rate of default.
The obvious question to ask here is why would anyone engage in such wilfully self-destructive behavior? But there's an equally obvious answer. Money. Because even as Mozilo was extolling how great Countrywide's loans were --- an assertion he didn't believe for a second -- he was at the same time scrambling to sell shares in Countrywide that generated hundreds of millions of dollars. It's a classic case of insider trading -- he was in possession of material knowledge that Countrywide was headed for disaster, and he got what he could while the going was good.
Mozilo should, of course, be prosecuted for anything misleading he said to the general public, perhaps even including his notorious statement in March 2007 that the housing bust "will be great for Countrywide at the end of the day because all the irrational competitors will be gone." But there are other implications to consider here.
First: Countrywide's example makes a mockery of the idea that government pressure to expand low-income and minority housing can be blamed for the housing boom and bust. Countrywide watered down its underwriting guidelines and gave mortgage loans to anyone who could sign a piece of paper for one reason, and one reason only -- to generate revenue. Private competitors with ever lower underwriting standards threatened to take market share away from Countrywide, so Countrywide matched their standards in a race to the bottom. Countrywide needed to keep its market share and volume high, because it had come to depend on the revenue from reselling the repackaged loans into the secondary market. In 1006 alone, it made half a billion dollars from such sales. (In 2007, that number fell to $14.9 million!)
Growing market share kept Countrywide's stock price high. Wall Street's appetite for securitized mortgage products meant it could unload whatever bad loans it had made as fast as it could repackage them. Government mandates to increase homeownership hardly appear to be a significant factor in Countrywide's sage of greed and stupidity.
Second: The focus on Mozilo's misdeeds makes him into something of a scapegoat for the entire subprime mortgage crisis. I'm not saying he doesn't deserve that honor: Countrywide was the biggest mortgage lender in the United States, and as such, did more than its fair share in propelling the global economy to its doom.
But he was hardly the only guilty party in that scheme! Shall we start naming names? Who else's head deserves to go on the block?
The CEO knew exactly how toxic his company's loans were. But that's not what he told the general public
By Andrew Leonard
"We ensure our ongoing access to the secondary mortgage market by consistently producing quality mortgages... We make significant investments in personnel and technology to ensure the quality of our mortgage loan production." (From Countrywide's 2005 Form 10-K)
Poor Angelo Mozilo. The "left-wing anti-business press" that the former CEO of Countrywide once blamed for making too much of a fuss about his excessive compensation is about to have another field day. On Thursday, the Securities and Exchange Commission formally accused him of fraud; specifically, of misrepresenting the kind of mortgage loans his company made as the housing boom began to lose steam.
At first glance, the SEC's case appears damning. As early as September 2004, Mozilo and two other top Countrywide executives were aware that the company was making increasingly risky loans. Indeed, the impression one gets of Mozilo from the SEC's complaint is that the CEO knew exactly how crappy the loans Countrywide made were. At one point, he called Countrywide's "80/20" loans (in which one loan is made for the first 80 percent of the purchase and then a second "piggyback" loan for the remaining 20 percent) the most "toxic product" he had ever seen in his years in the business. Mozilo was also appalled at the spread of "Pay-Option adjustable rate mortgages" that allowed borrowers to make minimum payments that didn't even cover accruing interest. He sent numerous e-mails to other executives warning that default rates were sure to balloon on these mortgage products, and tried to stop Countrywide from even offering them.
He also knew that it would get harder and harder to pool these loans and sell them as securities to Wall Street investors, and worried that if the real estate market took a dive, Countrywide would face major liquidity issues. (He was right!)
All this makes sense. As CEO of the biggest mortgage lender in the country and a man with decades of experience in the industry, Mozilo had a better vantage point than just about anyone to see what was happening in the mortgage business. But armed with that knowledge, what did he and his fellow executives do? They told investors and the general public that nothing was wrong. Mere days after railing about the danger of Pay-Option ARMS, Mozilo gave a speech at a conference extolling their value. In documents filed with the SEC in 2005, 2006, 2007, Countrywide asserted that it was different from its competitors because of the high quality of its loans. In other words, Mozilo lied through his teeth, time and again, and the SEC has him to dead to rights.
From the complaint:
From 2005 through 2007, Mozilo, along with David Sambol, chief operating officer and president, and Eric Sieracki, chief financial officer, held Countrywide out as primarily a maker of prime quality mortgage loans, qualitatively different from competitors who engaged primarily in riskier lending. To support this false characterization, Mozilo, Sieracki, and Sambol hid from investors that Countrywide, in an effort to increase market share, engaged in an unprecedented expansion of its underwriting guidelines from 2005 and into 2007. Specifically, Countrywide developed what was referred to as a "supermarket" strategy, where it attempted to offer any product that was offered by any competitor. By the end of 2006, Countrywide's underwriting guidelines were as wide as they had ever been, and Countrywide was writing riskier and riskier loans. Even these expansive underwriting guidelines were not sufficient to support Countrywide's desired growth, so Countrywide wrote an increasing number of loans as "exceptions" that failed to meet its already wide underwriting guidelines even though exception loans had a higher rate of default.
The obvious question to ask here is why would anyone engage in such wilfully self-destructive behavior? But there's an equally obvious answer. Money. Because even as Mozilo was extolling how great Countrywide's loans were --- an assertion he didn't believe for a second -- he was at the same time scrambling to sell shares in Countrywide that generated hundreds of millions of dollars. It's a classic case of insider trading -- he was in possession of material knowledge that Countrywide was headed for disaster, and he got what he could while the going was good.
Mozilo should, of course, be prosecuted for anything misleading he said to the general public, perhaps even including his notorious statement in March 2007 that the housing bust "will be great for Countrywide at the end of the day because all the irrational competitors will be gone." But there are other implications to consider here.
First: Countrywide's example makes a mockery of the idea that government pressure to expand low-income and minority housing can be blamed for the housing boom and bust. Countrywide watered down its underwriting guidelines and gave mortgage loans to anyone who could sign a piece of paper for one reason, and one reason only -- to generate revenue. Private competitors with ever lower underwriting standards threatened to take market share away from Countrywide, so Countrywide matched their standards in a race to the bottom. Countrywide needed to keep its market share and volume high, because it had come to depend on the revenue from reselling the repackaged loans into the secondary market. In 1006 alone, it made half a billion dollars from such sales. (In 2007, that number fell to $14.9 million!)
Growing market share kept Countrywide's stock price high. Wall Street's appetite for securitized mortgage products meant it could unload whatever bad loans it had made as fast as it could repackage them. Government mandates to increase homeownership hardly appear to be a significant factor in Countrywide's sage of greed and stupidity.
Second: The focus on Mozilo's misdeeds makes him into something of a scapegoat for the entire subprime mortgage crisis. I'm not saying he doesn't deserve that honor: Countrywide was the biggest mortgage lender in the United States, and as such, did more than its fair share in propelling the global economy to its doom.
But he was hardly the only guilty party in that scheme! Shall we start naming names? Who else's head deserves to go on the block?
Wednesday, May 27, 2009
Habits
I’ve always heard that habits are hard to break. In my life, that has generally proven to be true.
I’ve also heard that research has proven that it takes 21 days of repeated repetition to form a new habit.
Why then do people who do something repetitively for five or six months always find it so easy to break the habit they have maintained for that period of time? Should it not be ingrained and hard to break? I mean if it only takes 21 days to create the habit, shouldn't it be unbreakable in 6 months?
If we can find why something that needs changed is so hard to do, yet something so right is so easy to walk away from, even after the habit is formed, we will be able to break the chains of bondage for so many people.
I’ve also heard that research has proven that it takes 21 days of repeated repetition to form a new habit.
Why then do people who do something repetitively for five or six months always find it so easy to break the habit they have maintained for that period of time? Should it not be ingrained and hard to break? I mean if it only takes 21 days to create the habit, shouldn't it be unbreakable in 6 months?
If we can find why something that needs changed is so hard to do, yet something so right is so easy to walk away from, even after the habit is formed, we will be able to break the chains of bondage for so many people.
Saturday, May 16, 2009
Town Hall for Hope
In April, radio host and financial commentator Dave Ramsey hosted the Town Hall for Hope. The program was streamed to many churches and was carried by Fox Business Channel. Many people did not have the opportunity to view the event due to conflicts, lack or a church in their area or the somewhat limited availability of Fox Business to us frugal penny watching folks.
The video is now available. Please watch.
The video is now available. Please watch.
Dave Ramsey - Town Hall for Hope 2009 from Central FPU on Vimeo.
Sunday, March 29, 2009
Money Connection
As time goes by, I've found links to resources that have been helpful to me in learning more about money.
WE DID IT!!! Actual Stories of People Just Like You and Me who Followed Dave's Plan and DID IT!
Ruturn to Chris Johnston Life Coaching
Use the Links below to learn along with me. Please note, these are for refernce purposes only and do not imply explicit endorsement.
Useful Links
Yahoo Calculators
IRS Withholding Calculator
Kiplinger’s Tools
Debt Elimination Calculator
Savings Calculator
Free Annual Credit Report
Identity Theft Information
College Grants, Scholarships, and more!
Stop the Junk Mail for Credit & Insurance
Return to Chris Johnston Life and Financial Coaching
WE DID IT!!! Actual Stories of People Just Like You and Me who Followed Dave's Plan and DID IT!
Ruturn to Chris Johnston Life Coaching
Use the Links below to learn along with me. Please note, these are for refernce purposes only and do not imply explicit endorsement.
Useful Links
Yahoo Calculators
IRS Withholding Calculator
Kiplinger’s Tools
Debt Elimination Calculator
Savings Calculator
Free Annual Credit Report
Identity Theft Information
College Grants, Scholarships, and more!
Stop the Junk Mail for Credit & Insurance
Return to Chris Johnston Life and Financial Coaching
Saturday, February 28, 2009
How Neat It Is To Deal with a Classy Person
Nothing could have be worse than to have to take two weekends and apply it toward Continuing Education. But it wasn't.
First, the class was relevant for the world today. The instructor was entertaining and informational.
And second, I got to meet one of the most unique people I've ever met.
Seriously.
Have you ever met someone who just seems to have a nice aura?
The backdrop of where this is going is I'm not the first person most people tend to seek out for a conversation. But as my wife and I settled into the classroom last weekend, a young lady sat at the table in front of us.
Let's say that this lady is striking. Very striking.
During breaks and lunch we would chat with her. But she was the one initiating the conversation. As I noted above, in general, I'm usually the last person someone people look to in creating a conversation. (No, I'm not being negative. But I am working on being more approachable.)
Did I say she was striking? So striking that she for several years was a member of the Cincinnati Bengals cheerleading squad known as the Ben-Gals. Having retired from active duty, she is now one of the coaches of the squad.
Did I mention her professional background is engineering and she is a computer programmer, systems analyst and information systems manager? Not your typical stereotype for a cheerleader.
On the way home from class last week, my wife and I both commented what a genuinely nice person she was. In a single word, classy. So nice that we've exchanged information and will stay in touch. (Frankly no one in the world would believe I have the personal number of a former pro sports cheerleader.)
What makes this so unusual is despite her great looks, her avocational success and her vocational success and savvy, we never once noticed her doing or saying anything rooted in ego.
That was refreshing.
How much better would the world be if more people..... successful people....... the beautiful people......... were as down to earth and simply as nice as she was?
So what does this have to do with the theme of this blog? Everything. Think of how many people we could touch if we had the class and humbleness of this young lady. Whether in a business sense, spreading what we are doing with our financial and spiritual lives or simply creating friends for good times, adding a classy person to your friends list is always an accomplishment.
First, the class was relevant for the world today. The instructor was entertaining and informational.
And second, I got to meet one of the most unique people I've ever met.
Seriously.
Have you ever met someone who just seems to have a nice aura?
The backdrop of where this is going is I'm not the first person most people tend to seek out for a conversation. But as my wife and I settled into the classroom last weekend, a young lady sat at the table in front of us.
Let's say that this lady is striking. Very striking.
During breaks and lunch we would chat with her. But she was the one initiating the conversation. As I noted above, in general, I'm usually the last person someone people look to in creating a conversation. (No, I'm not being negative. But I am working on being more approachable.)
Did I say she was striking? So striking that she for several years was a member of the Cincinnati Bengals cheerleading squad known as the Ben-Gals. Having retired from active duty, she is now one of the coaches of the squad.
Did I mention her professional background is engineering and she is a computer programmer, systems analyst and information systems manager? Not your typical stereotype for a cheerleader.
On the way home from class last week, my wife and I both commented what a genuinely nice person she was. In a single word, classy. So nice that we've exchanged information and will stay in touch. (Frankly no one in the world would believe I have the personal number of a former pro sports cheerleader.)
What makes this so unusual is despite her great looks, her avocational success and her vocational success and savvy, we never once noticed her doing or saying anything rooted in ego.
That was refreshing.
How much better would the world be if more people..... successful people....... the beautiful people......... were as down to earth and simply as nice as she was?
So what does this have to do with the theme of this blog? Everything. Think of how many people we could touch if we had the class and humbleness of this young lady. Whether in a business sense, spreading what we are doing with our financial and spiritual lives or simply creating friends for good times, adding a classy person to your friends list is always an accomplishment.
Friday, February 27, 2009
Screw It
I was scanning the New York Times this morning and came across an advertisement that contained a picture of a corkscrew similar to this one with a headline that said............Screw It.
How many times when trouble has come our way have we looked at it and have given that same reply. Screw It.
Now that was not the intent of the advertisment. It was for something entirely different, but when my eye first saw the corkscrew and the headline together, my first thought was how many times have I worked on a problem only to get frustrated and said........... Screw It!
Screw It for some reason in gives our minds the mental detour that if we give up on the problem it's no longer ours. And sometimes the perception leads us to believe it. For a short period of time. Because in reality it isn't and reality always returns.
I guess that's why I like the corkscrew. For while Screw It if part of the corkscrew equation, the next step is to stop and take the effort to uncork the contents. And those contents generally represent something good.
Maybe that's what we need to do with our problems. Not only just Screw It but stop and take the time to uncork the possibilities the problem presents. Maybe those contents will be just as satisfying as the contents of a fine bottle of wine.
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