Ever wonder what your smartphone would look like if it got run over by a bus? Well, you don’t have to wonder any more.  I found out for you.

It looks like this.

Almost pretty in its ugliness

Almost pretty in its ugliness

I’m going to tell you exactly how it came to pass that I metaphorically, and almost literally, threw my phone under a bus.  But first let me promise this story has a payout: there is a pretty easy way to recover data from a phone that’s been run over by a bus.  In fact, it works on a phone with a screen so damaged that you can no longer enter the unlock code.  So this is really a “tips” story, not merely a dear diary story. Looking for the tips? Scroll down.

OK, here goes.

I was riding my bike  wearing brand new workout clothes, and turned to avoid a man using a leaf-blower near the curb.  When I did, my phone slid out of my squeaky-clean-and-new sweatpants pockets and slid a few feet to my left.  It came to rest on the six-lane avenue face down, a foot or two inside the right-hand lane, clear of traffic because of the occasional parked car. I felt the phone fly away from me, knew my error right away and applied the brakes, stopping perhaps 30 feet away from my phone. I dismounted and approached the phone.  At the same time, Mr. Leaf Blower also noticed it, and was nice enough to stop what he was doing and walk towards my phone, too.

Just then, a bus came barreling down the six-lane street, in the land adjacent to where my phone had stopped.

I had a fleeting thought that I could dart in and grab my phone before the bus arrived, but fortunately my brain told me otherwise.  I would never have made it. And fortunately, Mr. Leaf Blower exercised the same judgment.  So we watched as the bus approached, seemingly in slow motion.  Let me back up and say that I had a pretty hardy two-part impact resistant case on my phone (I know myself) and it had survived much harder falls.  So I was optimistic that it would be fine.  Unless….

There was plenty of room for Mr. Bus Driver to avoid my phone. I think he saw me and Mr. Leaf Blower.  But you know how this story ends.  As the bus approached, I could see its wheels over the dashed line.   I knew it would be a close one.

K-Thud.

K-Thud.

Direct hit, both front and back wheels. My optimism turned quickly to pessimism.

But as my fellow witness and I approached the victim, something miraculous seemed to have occurred. I expected to see a flat pancake of technology. Instead, my phone seemed to be fully in fact.  Pessimism back to optimism?

Until I turned her over. That’s when I saw this:

Ugh. Bad day.

Ugh. Bad day.

 

I’d seen smashed phone screens before. But this one was spectacularly smashed. It was so smashed that running my finger over the screen left a fine residue of little pieces of glass on my fingertip.  My phone was now star-stuff.

I nodded at Mr. Leaf Blower, covered the victim in a blanket (ok, I didn’t do that) and then moved my bike, myself, and my phone far out of harm’s way.  I then threw the temper tantrum of a man who knows 1 second’s indiscretion has just cost him about hours and hours of hassle.

When I recovered, I began plotting my options.  Buy a new phone?  Switch providers?  Go off the grid?  It took an hour or more for me to do the obvious thing — check to see if the phone worked.

Huh?

I haltingly pulled out the gadget and pressed the on/off button.  And, much to my incredible delight….it worked.  In fact, if I was in a dark place, I could even make out roughly the content on the screen. I learned later I could ever answer phone calls.

There's a heartbeat!

There’s a heartbeat!

Props to HTC for making a phone that can withstand getting run over by a bus…and to Incipio, for making a case that enabled this feat.  More optimism!

But now, pessimism again. I could not get data off the phone. My screen was so badly damaged that it did not accept my PIN code.  Somehow (can’t IMAGINE why) the wrong numbers were registered when I used the touch screen. I tried pressing different parts of the screen where my numbers should be, but they were rejected, too. Worse yet, thanks to those pesky security measures, I knew I had failed the PIN test 5 or 6 times, and I was rapidly approaching the time when all my data would be wiped because of consecutive wrong attempts.  Fortunately, I was able to make out my phone’s warning that my data would soon be deleted.

Wow, was this day frustrating. But I fixed (almost) everything for about $5.

First, let me give credit where credit is due.  I do pay for insurance through Verizon, even though I am very skeptical of most insurance and extended warranty arrangements.  Why? They are only as good as the claims process. Many times, electronics claims are difficult if not impossible to complete, making the insurance a bad value. But in this case, Verzon’s Asurion product worked great for me.  I had a replacement phone within 24 hours.  It was refurbished, but in better shape that my old phone, so that’s fair. It cost me a $99 deductible, shipping included…which is real money, but again, I think a fair price. Far better than staring at full retail price of $700 or so I was facing.

RED TAPE TIPS

OK, back to the solution. I was able to use an old-fashioned computer mouse to enter my PIN and unlock my phone.

How?  I just needed to buy a $5 part from an online electronics store called a USB-OTG (“on the go”) adapter.  (Click to buy from Amazon) These adapters enable a standard USB mouse to be plugged into the mini-USB port on an Android phone.

When I hooked up the contraption, much to my surprise, a large mouse pointer appeared immediately on my phone screen. It allowing me to click in the correct regions of my screen to enter my unlock code.

A USB mouse connected to the phone via a USB-OTG connector let me enter my PIN and get past lock screen.

A USB mouse connected to the phone via a USB-OTG connector let me enter my PIN and get past lock screen.

My phone was still losing LCD glass with every touch, so I had to be efficient. But I was able to get a last few recent photos off my phone, and make sure my contacts were transferred properly.

Note: Most of my photos and contacts were backed up already, because I back up everything.  I don’t use automated backups because I take too many photos and videos. Plus, of course, I was glad to get the chance to make sure nothing critical was missing from my backup.

What’s the moral of this lesson?  There are several.  A) Yes, I should put my cell phone in my backpack when cycling, when possible. B) Yes, backups are important. C) Yes, No gadget is worth risking your life.

But most of all: D) Don’t despair! The Internet has a $5 solution for (almost) everything.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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Click the map to create your own at 270toWin.com
Here is your every-four-year reminder that most of what you hear from the chattering class about the Presidential election is misdirection. The next president will be chosen by a handful of voters in a handful of states: Florida, Ohio, Virginia, and perhaps North Carolina, Colorado, Nevada, New Hampshire and Iowa.  As always, it’s a numbers game.  As we are reminded often, and seemingly forget just as often, popular vote means nothing in presidential elections.  Candidates must win states, in order to win electoral college votes, and they need 270 of them to win. That creates screwy dynamics and give some states (and the swing voters within those states) an outsized influence on the outcome. Why?
I’m giving away the punchline early in this story:  40 of 50 U.S. states have voted the same way in every election this century.  Yup. Here, Larry Sabato et all offer a nice discussion of this reality. 
 As a “for instance,” in the map above, the Republican candidate loses EVEN if he wins many of those “battleground” states.  And that’s not likely.
Play with your own possibilities at 270towin.com. But never forget: National polls mean nothing now, other than the vague notion of “momentum” or “overall sentiment.”  It’s the swing voters in the swing states that count. Sorry, Democrats in New Jersey or Republicans in Texas, your votes don’t really count any longer.
Here’s Larry Sabato’s Crystal Ball as it stands right now.

 


Caveat, caveat, blah blah. A lot can happen between now and November, of course.  Sure, you can imagine a whole bunch of other scenarios that might flip some traditional blue or red states if you like.  The electoral map wasn’t always this way; but what amazing force might send the electoral college map back to the days of Jimmy Carter?  If I were a gambler, I wouldn’t take that bet. 

Instead, focus on what’s been true for many election cycles: to win, Republicans will need a nearly clean sweep of all toss-up states. So listen carefully to state polls, and pay attention to news events in places like Florida and Ohio.

And I hope, as a by-product of that, you’ll focus on how not-democratic this process has become, to the distinct benefit of entrenched politicians and power brokers in all those places that now wield out-sized power on the process.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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Washington's Skagit Valley is better known for its amazing annual tulip festival. But home sellers are making bank there, too. (Photo from TulipFestival.org. Click for more on the festival or RoozeGarde growers.

Washington’s rural Skagit Valley is better known for its amazing annual tulip festival. But home sellers are making bank there, too. (Photo from TulipFestival.org. Click for more on the festival or RoozeGarde growers.)

It’s a good time to sell a home.  Buyers are back to fighting over properties in hot markets.  That means less time sellers need to wait around. Realtor.com says homes stayed on the market 14 days less in March 2016 than March 2015, a dramatic drop. The number of homes listed has dropped, too, meaning more buyers fighting over fewer properties.

Of course, competition means also means higher prices, and ultimately more cash at closing for sellers. You might expect folks selling in real estate hotbeds like New York and California to post big gains after sales, but you’ll be surprised at places where sellers are averaging more than $50,000 in sale proceeds, according to data provided by RealtyTrac.

  • Washoe County, NV (Reno)- $77,500
  • Yavapai County, Arizona (Prescott) – $76,980
  • Deschutes County, Oregon (Bend) — $71,600
  • Weld County, Colorado (Greeley) — $66,400
  • Skagit County, WA (Rural) — $66,900
  • Anchorage, AK  — $58,956
  • Charleston, SC   — $57,000
  • Davidson County, TN (Nashville) — $52,000
  • Baltimore County, MD   — $50,198

To review, that means the average gain for a home seller In Baltimore County last month was more than $50,000.

Note, the gains cover all sales, whether owners held the property for 1 year or 40 years. Nationally, sellers owned their homes on average 7.67 years, RealtyTrac says. That means folks in Prescott, Reno, or Bend averaged about $10,000 gain annually — a tidy sum.

(This story first appeared on Credit.com. Read it there.)

Moving down the average dollar gain list, you still find plenty of places where it was surprisingly good to be a seller in March. Here’s a few more:

  • Mohave County, Arizona (Lake Havasu City) — $43,251
  • Buncombe County, North Carolina (Asheville) — $39,750
  • Waukesha County, Wisconsin (Milwaukee) — $38,100
  • Ada County, Idaho (Boise City)— $35,183
  • York County, Pennsylvania — $35,000
  • Catawba County, North Carolina (Rural) — $33,000
  • Rockingham County, New Hampshire (Near Manchester) — $31,767

Of course, gains in America’s biggest cities were an order of magnitude larger, as you’d expect. In San Francisco County, the average gain was $473,000. In Santa Clara, $335,000. In New York City’s King Country, gains averaged $255,000. In Los Angeles County, a still-astounding $152,000.

“It’s absolutely a great time to sell, particularly in these markets that have seen strong price gains,” said Daren Blomquist, vice president of RealtyTrac.

It’s important to realize sellers often don’t see any of that money if they are moving into another home in the same area. Proceeds from the sale just get rolled over as a down payment on the new home. Still, those who move, or downsize, can realize dramatic (and often tax-free) gains. (If you’re planning on selling your current home to buy a new one, you should make sure your credit is in good shape before you apply for your new mortgage. You can check your credit scores for free on Credit.com to see where you stand.)

On a percentage basis, Washington D.C.-area sellers in Montgomery County (Bethesda) gained the most — a whopping 108%. San Francisco-area counties took up four of the top 10 percentage-gain slots, and three New York City metro-area counties made the top 10, also. But folks near Austin, Texas, did well, too, gaining 55% and placing 9th in the country.

It’s a bit of a surprise that D.C. and San Francisco landed atop that list, given that those markets that have cooled off a little – sale prices were actually down 2% in San Francisco in March. But here’s your explanation: Frisco prices fell following 47 consecutive months of increases.

“In those markets you have folks cashing out even as the market shows evidence of peaking,” Blomquist said. “I would suggest that folks selling now are likely timing the market quite well — whether intentionally or not.”

seller-MSAs

The Flip Side: Some Sellers Lose

Of course, not everyone is joining in the party. Americans in some communities are still losing money selling their homes. Sellers in Wayne, Michigan (near Detroit) saw their homes drop 75% in value, on average, from purchase to sale. Not far away in Saginaw, prices fell 22%. In rural Bell, Texas, prices fell 19%. Prices in two counties near Cleveland — Cuyahoga and Lorain — saw double-digit percent drops. And folks in eastern Pennsylvania — near Scranton and East Stroudsburg — also suffered double-digit losses, as did sellers in Harford County (Maryland, north of Baltimore) and Charles County, southeast of Washington D.C.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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Penn State University website (click for site)

Penn State University website (click for site)

Text-message senders, beware: U.S. courts are moving ever closer to blaming the sender of a text for car accidents that occur when the recipient is driving and texting back.

How could someone be responsible for an accident caused by a driver when they weren’t even in the car — and could theoretically be miles, or even half a world, away? I explored this only-in-the-digital-age notion several years ago in The Red Tape Chronicles, when a New Jersey man was sued after he texted with a woman around the time he struck another car, causing two sisters to become partially paralyzed.   Briefly, the legal theory relies on the notion of  “aiding and abetting” an act that causes harm (a tort) to someone else. The plaintiff’s attorney in that case compared sending a text to a driver to holding a piece of paper in front of a driver’s face, causing temporary blindness, leading to an accident.

That 2012 case, which gained national attention, was decided in the defendant’s favor, to the delight of critics who thought the notion was absurd. But while media cameras were focused elsewhere, a New Jersey appeals court left the door wide open for future lawsuits against text message conversation participants outside the car.

A Pennsylvania case has now opened that door even wider.

A Lawrence County court recently ruled that a plaintiff may proceed with a lawsuit that will attempt to collect damages from a text sender after the recipient was texting and failed to notice a a motorcycle rider in front of her had slowed to make a turn. The driver, Laura Gargiulo, struck the motorcycle and dragged rider Daniel Gallatin 100 feet, killing him.

Gargiulo had received texts from both Joseph Gargiulo (relationship unclear from court documents) and Timothy Fend, who the court describes as a “paramour,” or lover.  Both are named as defendants in the lawsuit.

Laura Gargiulo pled guilty to involuntary manslaughter in 2014 and served 60 days in jail for the death. Now, the Gallatin estate is suing for damages. Both Fend and Joseph Gargiulo filed objections to being included in the lawsuit, saying no law creates a duty that text message senders can be responsible for the actions of a recipient who is driving.

But Judge John W. Hodge sided with Gallatin’s lawyers, indicating it was possible they could prove later that Joseph Gargiulo or Fend “aided and abetted” violation of the state’s distracted driving laws.

Hodge relied on that New Jersey appeals court ruling in his decision.

“Although not binding on the court here, (that ruling) suggests that the sender of a text message can be liable for sending a message while the recipient is operating a motor vehicle if the sender knew or had reason to know the recipient was driving,” Hodge wrote.

The ruling is not a clear finding that texters outside a car can be responsible for accidents caused by a driver; it merely extends the possibility for such a finding a bit farther down the line. In fact, in the New Jersey case cited by Hodge, the court was actually upholding a lower-court finding that a defendant in a similar crash was not liable — but only because the facts of that case made it difficult to conclude the sender knew the recipient was driving. The appeals court went to great pains to make clear it might find for a plaintiff in the future.

“We conclude that a person sending text messages has a duty not to text someone who is driving if the texter
knows, or has special reason to know, the recipient will view the text while driving,” New Jersey Superior Court
Appellate Division Judge Victor Ashrafi wrote.

Citing that opinion, Judge Hodge merely refused to remove Joseph Gargiulo or Fend from the Gallatin lawsuit for now.  There’s still a lot for the plaintiff to prove. Still, the case should give anyone texting with a driver serious pause.  While drivers are ultimately responsible for what their vehicles hit, it’s easy to imagine a situation where a text message sender should know better. For example: the driver could directly respond, “I’m driving right now.”  And if the sender persists in doing something specifically designed to be distracting — such as a flirtatious message — one can imagine a plaintiff’s attorney pursuing the aiding and abetting theory.

For more, read this story on Legal Intelligencer.

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A Comcast bill

A Comcast bill

It’s a great time to be a pay TV  consumer. Really. After decades of helplessly paying skyrocketing TV bills (helpless because many consumers were stuck within monopoly situations) the worm is finally turning. New entrants like Verizon’s FiOS and SlingTV have created genuine competition, while the “cord cutting” phenomenon has helped many consumers ditch traditional pay TV altogether.

The pay TV industry is losing hundreds of thousands of customers every quarter, but roughly 100 million people still pay for TV in the U.S., so reports of the $100 cable bill’s demise are premature (the average cable bill really is $99). In fact, a recent survey by Consumer Reports found that 68% of Americans still pay for cable or a similar service, leading the magazine to conclude that only a “trickle” of people are really leaving pay TV.

(This story first appeared on Credit.com. Read it there.)

In other words, pay TV bills are probably here to stay for a long time. So you might as well avoid the minefield of gotchas that pay TV creates, and save yourself a bundle. If your monthly bill reaches into the triple digits, you might be doing TV wrong. Here are six things to consider.

1. Skinny TV

If you aren’t part of the trickle of cord cutters, perhaps there’s a middle ground you should consider—cutting back, but not completely cutting the cord. This group has been dubbed “cord shavers.”

About 11% of TV fans in the Consumer Reports survey said they had trimmed subscriptions as a way of saving money. Many took advantage of the latest trend in pay TV offerings — so-called “Skinny TV.” Pay TV firms have finally heard the message that consumers don’t watch 150 channels, and don’t want to pay for them. So providers, led by Verizon and Comcast, have come up with new bare-bones bundles that cost around $50. If you have an average cable bill and switch to a skinny package, you’ll save $600 annually. That could pay for a nice new TV … or a subscription to streaming services like Hulu or SlingTV, and still leave you with money left over.

2. ‘Promotion Pricing’

By now, the game is well-known — threaten to cancel, and get a special deal from the cable or satellite “customer retention department.” Everyone seems to know about this, but consumers still get distracted or can’t be bothered and overpay. Paying full price for TV is like paying MSRP for a new car. It’s only for suckers. Make sure to call periodically and ask about your rate. Notice when competitors like FioS arrive in your neighborhood, because competition always makes providers more amendable to cutting deals.

Again, I know you know this. That’s why the real game isn’t about getting promotion pricing, but keeping it.

3. Have a Calendar

We’ve all been there, happily paying our discounted $55 cable bill, when one day, we notice the bill is now $132. Yikes! What happened? The promotion period ended, that’s what happened. If you are lucky, you notice it during the first month and negotiate a new deal— and perhaps even score a refund of that month’s overpay. But many consumers are busy, and don’t notice the increase, and pay for months until they realize just how much the bill has soared.

Whenever you score a special deal from pay TV, it always ends. And it ends rudely. One of the most critical tips to avoiding the dreaded bill doubling is to mark a calendar every time you negotiate such a deal with a reminder to call again before your deal expires.

Sounds simple, right? Not so fast. Here’s a fresh tip I learned recently. Reminiscent of the old days of cellphone contracts, it can be very hard to learn exactly when your discount period ends. It’s often not on a monthly bill, or even on your website profile anywhere. You’ll probably have to call and beg to find out. That’s why it’s so important to write it down when you strike the deal.

But there’s still something else about promotion pricing that might trip you up.

4. Make a Well-Timed Call

When I called my pay TV provider recently to bargain for a continuation of my promotion pricing, I was hit by a new wrinkle: There was nothing the agent could do for me. I called too early!

I had to call within seven days of my promotional price ending, I was told. Until then, the rep couldn’t sign me up for a new “save the customer” deal.

This is starting to feel like the old rebate game, now. The more rules, the more likely consumers trip up. So make sure your calendar note is very precise. And please remind me in about two weeks that I have to call the cable company again.

5. Cut Down on Box Rentals

The old advice to save money on cable was to buy your equipment, rather than rent it. A cable box might cost $50 to buy, but $4 per month to rent, meaning the purchase paid for itself within a year. Recently, that equation has become far more complex, as cable boxes have become more complex. They now support HD, DVR, high-speed Internet, and even wireless networks. So it’s not as easy to buy your box, and in some cases, it’s not realistic.

However, a big mistake consumers make now is paying for boxes they don’t really need. Now that it’s relatively easy to stream channels to smartphones and tablets, it’s quite possible your family only needs one box. Maybe you can add a Roku device or Chromecast to your bedroom TV and skip the box rental for that unit. Maybe you can watch movies on your tablet and skip the box/TV altogether.

Even more promising: The Federal Communications Commission is trying to open up the “box” market to even more competition, which should bring prices down for everyone and spur creativity. To some extent, that’s already happening. Comcast, for example, recently announced it would experiment with boxless delivery of its channels, and let consumers use an Xfinity app instead. Progress!

6. Do You Really Watch That?

All these changes really add up to one big question every consumers should ask themselves: Do you really watch that? Do you really need the all-in 300-channel package from your TV? Is it possible that a $50 skinny TV package would be good enough? Would Sling TV’s 20 or so channels at $20 a month, plus a decent antenna for free over-the-air TV, do it for you? Or is Netflix binge watching, which can cost even less than $20 a month, enough to satisfy your screen needs?

Do a TV-watching audit during the next month or two. I’ll bet you’ll find that you can replace about 95% of your TV/screen habit with less than 50% of the cost. That’s an equation you can’t resist, and could really help you cut your monthly bills. Live, local sports is still the holdout, but with all the money you’ll save, you can probably afford to eat out at your local sports bar with the savings. And you might make some friends, too.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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The next refinancing boom?  Car buyers with longer-term loans might be tempted to refinanced, but it's only worth it for certain drivers.

The next refinancing boom? Car buyers with longer-term loans might be tempted to refinanced, but it’s only worth it for certain drivers. (Chase.com – click for site)

Auto sales keep setting records, with 2015 seeing the highest number of trucks and cars ever sold (more than 17 million). This is partly because borrowing money to buy cars keeps getting easier. Longer terms, lower credit score requirements, and persistently low interest rates keep enticing Americans to buy new wheels.

Most of those cars are financed — about 85% are purchased with a loan, or leased. As a result, the total outstanding balance on car loans in America is also higher than ever before (and higher than the total outstanding credit card balance in the nation), at more than $1 trillion, according to TransUnion.

A simple phone call to a lender could ease some of the monthly budget pain caused by that $1 trillion. Just as home loans can be refinanced, auto loans can be refinanced, too. In fact, getting a better deal on your old car loan is a lot easier than refinancing a mortgage. While it may not be worth the trouble for consumers with good credit who got decent financing when they bought their car, other drivers could see big savings by refinancing.

To keep the factories churning out record numbers of new cars, automakers keep stretching the limits of new car loans. More than 1 out of 5 new car loans now go to subprime borrowers. Also, the old 5-year, 60-month auto loan standard is so 20th Century. Ford recently joined several of its competitors in offering an 84-month loan to dealers around the country. In fact, loans lasting 73-84 months now make up 29% of the market. (Experian reports that the average subprime new car loan lasts 72 months.)

Longer loans mean lower monthly payments, of course, but also higher borrowing costs. Because subprime loan rates often come with double-digit interest rates, the financing costs can really add up. Seven years is a long time to be paying that much to borrow money.

Here’s the good news: Auto loan refinancing loans are now available for around 3%, which is a far cry from the average rate for a subprime car loan right now of 10.4%.

Google “auto loan refinance,” and you’ll see banks are competing fairly heavily for business. Call the bank where you have your checking account; the bank will probably have a simple auto loan refinancing offer, which may not even include a fee.

A $20,000, 6-year car loan at a 10.4% rate equals monthly payments of about $375. After two years, the balance on the loan would be $14,657; but the consumer would still be facing $18,000 worth of payments ($375 for the next 48 months).

(This story first appeared on Credit.com. Read it there.)

If the loan is refinanced at the point, the savings are dramatic. Payments would drop to $324 per month (more than $50 in savings!) and the total remaining payments drop to $15,552. That’s just about $2,500 over the life of the loan. Certainly well worth the call to a lender.

Granted, this scenario is for a nearly ideal auto loan refinancing candidate (this imaginary consumer went from subprime to prime borrowing status within 24 months), so it wouldn’t apply to everyone. It’s not impossible, but it’s not common.

Still, last year, Experian said there was $178 billion worth of outstanding subprime loans held by consumers. It’s a good idea to make a goal of reaching prime status. The ability to refinance into a much cheaper car loan can be a nice carrot to help inspire anyone to go through the process.

Now, let’s examine a consumer who might be tempted to refinance because she or he got a not-terribly-great-rate from their auto dealer. We’ll say this consumer borrowed $25,000 for seven years at a kind-of-ugly 4.5%. Those 3% refinance rates can sound attractive — and if we were talking about refinancing a home, a 1.5% rate drop would probably be worth it. But with a simpler, shorter car loan? Not so much.

The driver above would be facing 84 months of $348 payments. After two years, there would be $18,639 left on the loan. Refinancing that amount at 3% over the past 5 years of the loan would result in some savings — about $13 per month. That’s still about $780 over the life of the loan, but remember, that savings is spread over five years. Perhaps not worth the call.

There are no solid rules, but consider this — for every $10,000 borrowed, a drop of 1 percentage point is worth about $5 per month over 48 months. Roughing out the subprime-to-prime example above: a 7% drop is worth $35 (times 1.5 because the balance is about $15,000) and there would be a bit more than $50 in monthly savings. But if the drop is from a 4% rate to a 3% rate, the savings probably wouldn’t be more than enough to buy you an extra tank of gas each year (depending on gas prices, of course).

But as the auto industry continues to encourage longer-term, higher-dollar-value car loans, the calculus toward auto loan refinances continues to tip in consumers’ favor, so it doesn’t hurt to ask.

If you’re thinking about taking out an auto loan to finance a car, it is smart to check your credit first, as agood credit score can help you qualify for better terms and conditions. You can see two of your credit scores for free each month on Credit.com. If you don’t like what you see, you can take steps to improve your credit score to help you prepare to buy your next car.

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What get stolen during a phishing attack. Verizon chart. Click for full report.

What get stolen during a phishing attack. Verizon chart. Click for full report.

Sometimes, people get tired of hearing the same old advice — but they need to hear it again, anyway. Eat healthier.  Exercise more.  Spend less. And

DON’T CLICK ON ATTACHMENTS IN EMAILS YOU DON’T EXPECT.

I know, I know, you would never do that.  But you’ll be stunned to find out how many people do.  In fact, that’s the big lesson from Verizon’s annual Data Breach Investigations Report. We’ll get to that in a moment. But first, let me discuss human nature — because that’s what we’re really talking about here.

I’d have a really tough time pitching a story to an editor about phishing. That story is so 1999.  And yet, there’s a reason your inbox and mine is still full of notes claiming to be from banks that need your account number and password. Phishing works.

And it doesn’t only  work on you. It works on big organizations. Like hospitals. There are multiple reports that the dramatic ransomware attacks suffered recently by health care providers — you know, the ones that reduced hospitals to scheduling surgeries with pencil and paper — began with successful phishing emails. Yes, employees click on emails, and they click on attachments, and then, hackers are off to the races.

Why does this keep happening? Human nature is pretty tough to overcome.  Think back to one of the original global virus epidemics — the LoveBug. It worked for one reason: Who doesn’t want to get a love letter?

Techniques have only improved since then.  Today, hackers can hand-craft phishing emails with personal details, such as “Our boss Rick really needs you to open this file for him.”

The other reason Phishing works is borrowed from the bank Pink Floyd — the Momentary Lapse of Reason.  You can have your guard up 23 hours and 59 minutes a day (I hope you aren’t reading email that much), but all it takes is one slip, and down the hole the hackers go.  We all get distracted and do dumb things.  We are all vulnerable some of the time.  Hackers have 24 hours every day to attack.

And so, phishing works. In fact, Verizon seems to think it’s actually worked “better” last year than the year before.  In the dataset Verizon studied, 30 percent of phishing messages were opened — compared to 23 percent the year before.  And 12 percent of the time last year, recipients went on to click a malicious attachment or link, enabling the attack to succeed. (Last year, 11 percent).

Ever more alarming, on average, it took fewer than 4 minutes for targeted recipients to open a phishing email and click on a malicious link.  Hackers get to work quickly.

It’s important to know that the attacks targeted hospitals and other organizations are not your father’s phishing.  These bad guys aren’t trying to direct victims to a website and trick them into entering credentials or account numbers. They simply want to execute rogue code on the victims computer through an exploit, so they can then have their way with the target network — install ransomware, for example.  In the old attack, victims had a third moment to pause and consider the gravity of their actions (open the email, click on link, enter data).  New phishing emails only offer two such moments, and they are much more passive. That makes phishing more dangerous.

And that’s partly why ransomware made the biggest jump in Verizon’s list of most common attacks.

Red Tape Wrestling Tips: Training, filter, segmentation

Email users still aren’t getting the message. As Verizon’s report puts it: “Apparently, the communication between the criminal and the victim is much more effective than the communication between employees and security staff.”

So what can you do? Don’t be afraid to give — or receive — old warnings about diet, exercise, and phishing. If you are too smart for all this, endure the training for the sake of your colleagues, and your organization. Someone on your team — probably several someones — has clicked on a phishing email recently. The data you save may be your own.

In addition to training, organizations can help themselves by filtering out phishing emails so they never get to employees in the first place.  And perhaps most critically, they should carefully segment networks so when human nature strikes, the damage is limited.

 

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On the left, 1996 expenses for a family of four. On the right, 2014. Pew infographic. Click for report.

On the left, 1996 expenses for a family of four. On the right, 2014. Pew infographic. Click for report.

Here’s all you need to know about the fragile state of the American middle class. An online payday-type lender named Elevate Credit sees the middle class as its target market.

“Decades–long macroeconomic trends and the recent financial crisis have resulted in a growing ‘New Middle Class’ with little to no savings, urgent credit needs and limited options,” the firm says on its website.

The new middle class. Lining up to borrow money at triple-digit interest rates.

You probably think of payday lenders as unsavory places where Americans without checking accounts must go to cash a check, or where folks without credit cards rob Peter to pay Paul so they can pay the electric bill.  Well, if Elevate is to be believed, triple-digit rate loans aren’t just for the poor anymore.

As part of my Restless Project, I argue often with anyone who will listen that the American economy is seriously broken — and the middle class has a lot more in common with the poor than the rich.  Folks who don’t realize this aren’t paying attention, and they’re destined to be surprised when they find themselves shopping for payday loans someday.

How did this happen?  Easy. Monthly expenditures are up for families, while incomes are flat. More money is going out, while more money isn’t coming in.  Each time costs edge up while income doesn’t, people are closer to the “don’t even have one month’s of emergency savings” category.

The new middle class is the restless class. They might live in a nice-enough house, and even have some nice clothes. But they are one illness or one layoff away from a very uncertain future.

The Pew Charitable Trusts recently broke down the “more money is going out” data is a report blandly titled “Household Expenditures and Income: Balancing family finances in today’s economy.” There’s nothing bland about its content. From 1996-2014, a typical American family spent about 25 percent more on housing, food and other basics.    During the 1996-2014 time frame, the biggest expenditure jumps came in housing, which grew from $12,300 annually to $17,000 annually, and health, which jumped from $1,119 to $2,560.

But incomes didn’t keep pace with rising costs.  As a result, “slack” — or money left over at the end of the month — is disappearing from the family budget.  On average, Americans spent 71 percent of income on the basics in 1996, and in 2014, it was 75 percent, and headed the wrong way.

The recession really exacerbated the problem.

“From 2004 to 2008, median household income grew by only 1.5 percent, while median expenditures increased by about 11 percent,” Pew said. “By 2014, median income had fallen by 13 percent from 2004 levels, while expenditures had increased by nearly 14 percent. This change in the expenditure-to-income ratio in the years following the financial crisis is a clear indication of why and how households feel financially strained.”

Do your own math.  The typical household – using “median ” data — saw its spending grow from $29,400 in 1996 to $36,800 in 2014, or roughly $3,000 a month.  Using “average” numbers, spending grew from from $43,200 to $54,800 during that span, or about $4,500 a month.

How does your family compare?  Recently, I asked readers to share their monthly budgets with me — asking how some families live on less than $60,000 annually — and these figures are in line with what I heard from you.  Here’s a typical budget from Texan Matt DeMargel

Rent: $1,350
Healthcare: $588
Utilities: $400
Child care: $600
Food: $800
Car insurance and gas: $300
TOTAL: $4,038

(Note, the DeMargel family was lucky enough to pay nothing for child tuition or student loans.)

Even that modest budget requires a roughly $60,000 salary, before taxes. Remember, these are real expenditures, so they must be paid with after-tax, actually-hit-your-checking-account dollars.

Of course, people at the lowest economic rungs struggled the most.  Households in the lower third spend 40 percent of their income on housing, while renters in that third spent nearly half of their income on housing, as of 2014.  That’s a flat-out terrifying way to live — renting, and giving half your paycheck to a landlord.

But it’s important to note that struggles and anxiety are continuing to reach deeper into that “new” middle class.

Back in 2004, the typical household in the lower third had a little less than $1,500 left over every year after accounting for annual outlays – so-called “slack” in the budget. Just 10 years later, slack for this group had fallen to negative $2,300, a $3,800 decline. These households may have had to use savings, get help from family and friends, or use credit to meet regular annual household expenditures.  Those without credit cards turned to products like payday loans.

Slack has all but disappeared from the “middle third” folks as well, however.  The typical household in the middle third saw its slack drop from $17,000 in 2004 to $6,000 in 2014.  In other words, the “leftover” line on the monthly budget fell from about $1,500 to $500 for America who are solidly middle class, approaching upper middle class. That’s $500 to deal with every emergency car repair, unexpected health issue, or Heaven forbid, a vacation.

No, living without slack is nothing like standing on bread lines. But it is frightening enough to keep you up at night. And it should help you realize that the “new” middle class, the restless class, has a lot more in common with the poor than the rich in America.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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Always do an estimate reality check. Sites like RepairPal.com will give you a rough idea of what repairs should cost. (Click for site)

Always do an estimate reality check. Sites like RepairPal.com will give you a rough idea of what repairs should cost. (Click for site)

A captive consumer is someone who isn’t in a position to bargain and, in turn, could overpay. For example, a traveler purchasing Wi-Fi on an airplane is captive because there’s only one option and a pay TV subscriber is captive if there’s only one cable company in the area, or if it’s difficult to install a competitive satellite service.

Drivers facing car repairs are often captive, too. When your car breaks down and you have it towed to a repair shop, you don’t have a lot of options but to get it repaired. And, for most drivers, pulling into a car dealership shop for “regular” repairs can create almost the same situation. Few consumers are car-savvy enough to know if they really need new brake rotors or a transmission fluid flush, so they end up doing what they are told by the expert, and paying the bill.

Gotcha.

Car repair shops routinely attract a high level of complaints at state and federal offices related to overcharging and “gotcha” methods. (Read this guide to find out 7 ways to avoid getting overcharged by your mechanic.) Auto mechanics may work on commission or at an hourly rate, which may incentivize them to perform unnecessary repairs that can turn $40 oil changes into $600 bills. Plus, repair shops have the advantage of using the “safety” tactic in their sales pitch (as in, “Well, you don’t have to change your brake pads, but they are below 50%. I would, to be safe.”)

(This story first appeared on Credit.com. Read it there.)

Consumer Reports’ chief mechanic John Ibbotson puts it this way: “High scare equals high profit.”

It’s hard to give anti-gotcha advice in the face of safety warnings – I have no intention of suggesting that you do anything to make you or your family less safe. But it is possible to do that and avoid ripoffs.

It’s Not The Nickels & Dimes — It’s The Dollars

You’ll probably end up overpaying for a repair at some point in the life of your car. That’s not the end of the world. What’s important is to not get routinely ripped off, and discover that you’ve spent $1,000 or more year after year on repairs that may not be essential. AAA reports the average driver pays $766 per year on maintenance and repairs, which of course can vary based on the age of the car. But if you are spending more than that, ask yourself why. And remember, the nice service manager at your repair shop is in the sales business. If your oil changes routinely end up costing $500, you may want to consider breaking up with the shop.

The Medium Bills Are What Will Get You

Transmissions fail and engines give up the ghost. It happens. Major repair bills often have as much to do with bad luck as anything else, so I’m not going to dwell on them. This repair tech at Edmunds.com revealed that shops often don’t make that much money on big, expensive and complex jobs. Where the real financial win comes into play for them are on the medium-sized jobs that are easy and can be done quickly. They make money on brake jobs, engine flushes, and so on. Keep that in mind for your next visit to the mechanic and you’ll likely have more confidence as a consumer, giving you an advantage.

“Service advisors are wary of customers who look like they know what they’re doing,” the shop worker told Edmonds.com.

Just Say No

Repair shops may tell you your bill is about to balloon, and get your permission, usually with some friendly language like, “You should really get this taken care of now.” But do you really need that transmission flush? There’s a big difference between dealer recommended service and manufacturer recommended service. A good rule of thumb is to follow the later, which you can find in service manuals and on carmaker websites.

Diagnostic Fees

One of the most popular and lucrative gotchas at repair shops is the dreaded “diagnostic fee,” a service charge for establishing the problem with your vehicle. Sometimes it genuinely takes an hour or two to diagnose a repair problem. But Kristin Brocoff of CarMD.com said that it is also possible for techs to plug into the car’s computer and get a diagnosis in seconds.

“It takes less than two minutes for the service writer or tech to use a scan tool on your car,” Brocoff said. “If the problem ends up being something simple like a loose gas cap, most shops waive or discount the diagnostic fee, but some charge upwards of $100. Ask a lot of questions and know what tests they’re running on your car.”

If you want to run a test yourself and compare your results to what a service tech is telling you, you can purchase a OBD2 reader that can read the car’s computer diagnostic codes. It’s important to note that the codes they generate don’t always tell the whole story, and they can be misinterpreted.

Brake for Second Opinions

Car brake repairs range from simple and cheap (brake pad replacement) to the really expensive (rotor and even caliper replacement). It’s easy for shops to say you need the expensive work when you could get away with the cheaper job. They might even show you what looks like a terribly dirty, worn rotor. But rotors can be repaired (turned) instead of replaced, for example. If a shop tells you that you need a full brake replacement, go to another shop and get a second opinion. The variety of quotes you’ll receive for repairs like this can be eye-opening. (Last time I replaced my tires, I was told I needed $500 worth of repairs on my front brakes. A month later, they were fixed elsewhere for $200.)

Smell, Listen, Look, Feel

This leads to perhaps the most important piece of gotcha-fighting advice. You have a relationship with your car. Treat it like a friend, and it’ll do the same for you. Listen to it; look at it; smell it; feel it. Listen to the sounds it makes. Hear a sound like an airplane landing when you press on the brakes? Take it in before a cheap repair becomes and expensive repair. See a puddle stain in your parking spot? Get help. Smell something unusual when you turn it off? Open the hood and look around. Feel a drop in performance when you accelerate on a highway? Notice a drop in gas mileage? Take it in. The most important way to avoid overpaying is to avoid the captive consumer situation. A good rule of thumb: You want to drive to a repair shop, not get towed there. Avoid letting things go until the situation is dire, and it’s not really possible to get second opinion quotes.

Question Line Items

When Popular Mechanics interviewed an anonymous repair tech a few years ago, he shared that many shops add annoying tack-on fees like “shop supplies.” That means you might be getting charged $20 for a shop rag. Feel free to ask and challenge the shop on these charges. Doing so is fair and can put the shop on notice that you aren’t a pushover.

Use Online Tools for a Reality Check

Finally, there are plenty of clever tools now that can give you a rough idea of what repairs should cost in your area. Consumer Reports has one; So does RepairPal.com. They won’t be exact, but you’ll have a good idea if the quote you are getting is fair. Also keep in mind that if the quote is too low, ask questions to help make sure your shop isn’t planning a bait and switch.

Even if you do avoid a car repair gotcha, it’s important to have an emergency fund so a pricey repair doesn’t turn into unwanted debt. Having outstanding or large debts can hurt your credit score and you’ll want a strong score in the event that your car is damaged beyond repair and you need to get a new one. Having a good credit score may make it easier to get approved for an auto loan with an affordable interest rate. You can keep an eye on your credit score by viewing two of your credit scores for free each month on Credit.com.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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Click to read Grow's project.

Click to read Grow’s project.

To paraphrase Stalin, $1 trillion is a statistic; an unemployed student loan borrower with a $900 monthly payment is a tragedy.

It’s almost graduation season, which means it will soon be time to reveal how special, and record-setting, this year’s college graduates are.  Setting records for debt, I mean.

Six years ago, a nearly unthinkable line was crossed: Americans’ total outstanding student loan debt surpassed total credit card debt. The nation’s student loan burden has only ballooned more since, and it’s now 1.5 times the size of credit card debt.  In one decade, America’s unpaid bill for higher education grew from $600 million to $1.2 trillion, and it now exceeds total auto loan debt, too. Only Americans’ mortgage debt is larger.

College grads from 2015 left school owing an average of $35,000, a record. But even that figure hardly tells the real story.   Students who go on to graduate school often up end with even bleaker balance sheets.  One-quarter of all grad degree earners had borrowed more than $100,000, according to a paper published last year by the New America Education Policy Program. One in 10 borrowed more than $150,000. Try to repay that in the recommended 10 years and you’d end up with monthly payments of $1,750, assuming a modest 6.8 percent interest rate.  Most opt for 20 or even 30 year terms, making it entirely possible that today’s students will be still be paying for their own college tuition when the first bill comes for their kids’ college tuition.

What does a debt burden like that do to a young adult just starting out?

The folks at Acorn’s Grow online magazine recently released an excellent series called “The Faces of Student Loan Debt.”  As part of the project, they asked me to explore the real-life cost of student loans — to young adults, and to our society at large. You can read the full piece over at Grow.Acorns.com.  But here’s a brief list of consequences for students:

  • They live with their parents, into their 30s. More 25-34 year olds are still in the nest than at any time since the Census Bureau started counting in 1960. This hurts their parents too — they put money into their adult children’s lives that the should be saving for retirement.
  • That also means they aren’t buying starter homes; so people in starter homes have a harder time trading up
  • They put off marriage and kids.
  • Their credit takes a hit.
  • They aren’t forming startups.
  • They aren’t following their passion. They aren’t saving for retirement.
  • They are working second jobs, however. The highly indebted are about 50 percent more likely to hold down more than one job (33.0% of debtors vs. 23.4% of non-debtors, according to one research paper.)

Keep reading the series, or my story, at Grow.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list below or click on an advertisement.



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