Career Success

We talk a lot about financial success, as that is part of the name for our Office for Financial Success (OFS). At the OFS, we provide free peer financial counseling to students, both live and through emails; campus and community financial workshops; financial counseling for the public (a small fee that is reduced for lower-income households); and tax preparation for moderate-income households through our nationally recognized MOTax program. Often, when counseling students, while it is a financial issue that brings them to us, it becomes apparent that there are some critical areas that they need to address to improve their trek through life (career). Some of the ones that come to mind are below.

Ethics – We probably don’t need to remind you of the importance of ethics in one’s professional life. Today, while the antonym of “ethics” is “Madoff”, we need to ask ourselves what ethics means to us on a daily basis. As a start, carefully observe the people that you hold in high regard and ask yourself if you are similar to them in your ethics. Take note of their honesty, values, and work-ethic and, if possible, try to emulate them. Yes, finding that person whose compass always points to “true north” can be very valuable, as you work through life. Importantly, the world does not stand still but, if we have a sound ethical base, we will make decisions that mold that world in a positive direction. For you old Boy Scouts out there, think about how the world would be different if everyone followed the Scout Law. While Boy Scouts aren’t perfect, I recently read a piece by a mediator on how he employs the Scout Law in his work. (Regardless of your occupation, you might find it interesting: http://karpmediation.com/resources/ScoutLawforMediators.pdf .)

Solutions – Problems follow us, wherever we go, and being able to work toward solutions is an extremely valuable skill. At work, we often find repetitive processes that “have always been done that way” and could be improved if we adopted a new technology, changed the management of our workflow, and recognized the impediments that keep our business from fully achieving her goals. Try to stop blaming others for problems. Instead try to imagine what can be done to prevent the problem from happening and ask yourself how you can demonstrate leadership in making that a reality.

Technology – The future is now. Every day it seems like there is some new process being employed by the university that requires me to learn something new. Graduate students find out about our program on the computer, apply on-line, and may take our courses via the internet. We may never see them face-to-face. We need to keep in contact with all of our students and we find that they respond to text-messaging much faster than they do a phone call or e-mail. For you that are younger (which is most of you) this probably sounds a little corny but, trust me, there will be more, many more, changes in technology. I ask you to embrace all that is good about these changes and to keep your distance from the rest. (How you make that decision is why I put Ethics at the top of this list.)

Sales – You have to be able to sell yourself and win over others to your point of view, in order to achieve financial success. You cannot have too much practice in communication skills. Take more courses that require you to talk to others. Practice speaking in front of large groups. Listen carefully to those you consider to be great speakers and “steal” a practice from them to use in your own communications. The main thing is to not be afraid to try to improve in this arena. John Ford, the film director, once said, “You can speak well if your tongue can deliver the message of your heart”…..seems we’re back to Ethics, again.

- Robert O. Weagley, Ph.D., CFP(r)
Chair, Personal Financial Planning
University of Missouri
Columbia, MO 65211

What is Predatory Lending?

Recently, the economy has shown a tendency toward treating all of us as if we were prey. This environment has encouraged legislators to take a harder look at most lenders. If you listen, you’ll hear some of these lenders called “predatory lenders”. Predatory lending is the practice of charging excessive fees for consumer loans or payment agreements that are damaging to the consumer’s financial interests. Moreover, predatory lenders often use aggressive tactics and false claims to target unsuspecting, often low-income, households. What are the signs you may be dealing with a predatory lender?

Twelve Signs You May be Dealing with a Predatory Lender

1. The deal sounds too good to be true.

2. The lender pressures you to accept his offer or ignores your questions about the loan or payment agreement terms.

3. You are approved for a loan that is greater than you wanted, and you know you cannot make the higher payments.

4. There are fees in the loan or rental papers that the lender did not tell you about, and the lending agent keeps trying to add costs, such as credit insurance.

5. The loan or payment agreement takes away your right to take legal action if something goes wrong.

6. The interest rate is extremely high, or there is a hefty penalty if you pay off the loan early.

7. The lending agent asks you to sign blank papers to be filled in later.

8. You were promised your monthly payments would be lower in the future, but instead they are higher.

9. A lender focuses on low weekly or monthly payments - not the loan‘s total cost or the Annual Percentage Rate of interest.

10. You receive a call or letter from a lender pressuring you to refinance your loan several times a year even though this is not something you requested.

11. You pay up-front fees before you make application or sign any kind of agreement. Fees for a consumer loan should not be greater than 1% of the loan. Often with predatory loans fees can exceed 5%.

12. A lending agent tells you to provide information that is not true on the loan application, enabling you to be approved.

While these may sound far-fetched and ludicrous to you, it is estimated by the National Association of Consumer Advocates that predatory lending costs the unsuspecting among us over $9 billion per year (http://www.naca.net/predatory-lending-practices/). While this number may seem small, in light of recent federal stimulus legislation, to the unsuspecting, often trusting, consumers who are the targeted-prey of these lenders, these loans greatly impede those individuals’ ability to reach financial success. In fact, I have personally had a low-income, single mother tell me that she used one of these loan sources, a payday lender, as she thought it was a way for her to increase her credit score. Trust me, it does not.

In closing, you know I am not a fan of borrowing money for anything that does not have the chance to appreciate in value; an education, a home, a business, or other investment. My best advice to you, however, if you must borrow money, is to first discuss it with your bank or credit union. If they won’t loan you the money, the odds are better than 50/50 that you shouldn’t be borrowing the money. If you are very financially pressed, perhaps financially depressed, I would suggest you call a local credit counseling agency. Not-for-profit credit counselors can be found through the following website: http://www.cccsstl.org/?referrer=google&consumer&credit&counseling&gclid=CKHLy_yPzpkCFQMQswod9muAvA .

With, Brenda Procter, State Specialist & Instructor, MU Personal Financial Planning Extension

- Robert O. Weagley, Ph.D., CFP(r)

Chair, Personal Financial Planning

University of Missouri

Columbia, MO 65211