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Sound Advice: February 28, 2024

Advisors are standing by . . . at 3 a.m.?

One can only gag at the absurdity of the titles that are being used today to convince gullible people that those who are “ready” to serve them have notably superior qualifications for whatever they are supposed to be doing. 

A few minutes listening to the radio (more likely in the car these days) will inevitably give you the opportunity to learn about offers to: 1. Take care of more than $10,000 in outstanding credit card debt; 2. Negotiate with the IRS to reduce unpaid taxes; 3. Sell your life insurance policy (because the premiums have gotten so high); and 4. Buy an extended auto warranty for a car that’s no longer covered by the factory warranty.  And so many others that make absolutely no sense.

It is not unrealistic to believe that credit card companies will be willing to negotiate outstanding credit card balances.  For them, it would be better to take less than get nothing.  Although such payoffs can be arranged, they come along with substantial reductions in credit scores, which may make borrowing extremely difficult until one’s personal finances are again healthy (if they ever are). The flipside is that if you don’t seek a settlement, you may be on the wrong end of a lawsuit by the credit card company.

Negotiation with the IRS isn’t a panacea either.  It’s available only to a limited group of people and the options are usually extended payment plans and lump-sum compromises. The latter option only exists for people who are not likely to make full payment under an extended payment plan.

Sell your life insurance policy?  Go right ahead, but other than the apparent appeal of immediate cash this opportunity to raise money benefits only one side: the buyer.  Your family, on the other side, will be a net loser.  Yet the commercials always like to repeat the phrase that the so-and-so family sold their policy because it was “right for them.”  Sad!

Buy an extended auto warranty?  For starters, most of these warranties are overpriced, providing handsome commissions to sellers.  Better to make regular contributions to an emergency fund to handle repairs that may be needed.  What’s more, aftermarket auto warranties have specific limitations on what repairs are covered and where the work can be done.

And then there’s the world of commercial euphemisms.  In the good old days, car repairs were done by mechanics.  Now these people are known as technicians.  The folks (in some other part of the world) who answer your phone calls in the wee hours are “advisors”.  If you should be visiting a stock brokerage company looking for assistance, the person you will meet will be a Vice President, even if he or she has been employed there for only three days.

Beware of words and phrases such as:

Recommended

You Deserve

What Have You Got To Lose

If You Qualify

You Owe It To Yourself

Everybody’s Talking About

Your best response: A quick about-face.

 

N. Russell Wayne

Sound Asset Management

Weston, CT

Any questions: please contact me at nrwayne@soundasset.com

203-895-8877

www.soundasset.blogspot.com 

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