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Dollars and Sense

February 10, 2016

Q:

If our federal deficit is being caused by the welfare system, why don't they fix it?

A:

It's not just the welfare system but, it is a big part of the deficit. At least 50% of all American's are receiving subsidies from our government and politicians won't risk losing those votes bytaking it away.  However, can you imagine what it would do to our country and our economy ifthose subsidies were suddenly taken away all at once? We have created a monster in the formof government handouts paid for with our tax dollars. I would like to believe it's possible for our government to reverse this situation but, I don't. Those who are receiving subsidies today are creating the next generation of recipients and the cycle will continue. The best we can hope for is that our government gets better control over how recipients use the money, stop adding new subsidies, put the able bodied recipients to work who receive the benefits and require mandatory drug testing. If you fail the test, you lose your benefits. If that sounds too harsh to you, just remember, it's our tax dollars.

Q:

When Presidential candidates say they can fix the deficit in our country, are they being honest?

A:

A single person, not even the President, can fix the deficit. It takes a collective effort on the part of our elected officials to fix it. Every time I hear a candidate say that they will do this orthat if elected, I cringe because they know better than to think they can do it alone. If the process of balancing the budget begins, you will have all these representatives from every  state trying to protect their turf and not wanting to cut out money that goes to their state. This makes it a very complex problem. That's why you have recently heard some candidates forPresident saying they want to raise taxes to balance the budget. It's a lot easier to do that than cut spending. I think a large majority of working Americans would rather see spending cuts  than to see a tax increase. Let's hope the people in power do the right thing.

Q:

Is our government still held in high regard by other countries when it comes to finances?

A:

I'm not sure if our country was ever held in high regard on finances. However, if they haven't been in the past, they sure won't be in the future. The past 10 years have been very bad for our economy and no one in leadership has made any moves to improve things. We are stillspending money as if there were a surplus and I think things may have gone so far that it's too late for anyone to do anything about it. Some reports tell us that less than 50% of our  population is paying taxes and this percentage is decreasing. In other words, more people are taking money from our government than those who are paying into the government. This is a pretty disgusting figure. I can't imagine that any country would look at us as a financial powerwith an unbalanced system of taxpayers. Some parts of the world probably look at us as a joke. Why? Because we are a mess financially yet they can ask us for financial aid and we getout the check book.

February 3, 2016

Q:

Why is it that many large businesses are given big income tax breaks?

A:

Tax breaks for businesses or companies have always been given and they are usually justified.  They are often given to companies who are expanding their operation, creating more jobs orbuying equipment. The government gives these tax breaks to encourage growth which helpsthe economy. The theory behind these tax breaks is that there will be enough jobs created that the new employees will pay enough tax to equal or exceed what the corporation wouldhave paid if they were not given the tax break. It doesn't always work out that way but, moreoften than not, it does what it was intended to do. These types of things happen on the local level as well. The competition between communities trying to lure businesses to their area is   fierce and it takes incentives to win the battle. I don't have any problem with this approach as long as it works.

Q:

Are there a lot of crooks out there scamming people out of their money?

A:

Well, I know there are plenty of criminals trying to scam people out of their money but, I don't believe they are always successful. Most people don't fall for these scams. However, even though their success rate may be low, there are still thousands of people every day  who lose hard earned money to criminals. Unfortunately, it is often senior citizens who fallfor these scams. That is why it's important that grown children of elderly parents watch for signs of diminishing financial capabilities but, that's a difficult situation as well. Just becauseyou disagree with some of your elderly parent's financial decisions doesn't mean they havediminishing capabilities. However, if you have reason to believe they are sending money toor talking to someone wanting them to send money, it's time to step in and ask questions.   Falling for scams and playing the lottery are done for the same reason. It's to get rich quick. 

Q:

My mother is hesitating to put my name on her bank accounts in case she gets sick. How do I convince her?

A:

Many senior citizens make the choice to put one or more of their children on their bank  accounts as a safety measure in case they become ill or incapacitated. It's not a bad idea.  However, it is the parent's decision and if they are of sound mind and they don't want to do  it, leave it alone. When they are ready to do it, they will let you know. My sister lived in the  same town as our mother and she was on all the signature cards and I was fine with that. It'sa generally accepted practice that, in most cases, has nothing to do with the state of mind ofthe account holder. It's just a precaution. It's a very personal thing and if the parent isn't  ready to do it, don't try to force the issue. Some resist for different reasons. Maybe they feel  it's giving up some of their independents. Others may know the history of their grown children's financial affairs and they aren't comfortable. It doesn't matter what the reason is. They will let you know when they are ready.

January 27, 2016

Q:

What is the risk of someone breaking into a safe deposit box at a bank?

A:

Regardless of what you have seen in movies and TV shows, it is nearly impossible for a  break in of this nature without authorities being alerted. Vaults in the modern era of bankingare re-enforced with materials that are difficult to penetrate and wired to alert law  enforcement if someone attempts a break-in. It is the safest place you can think of to store important papers and other valuables. It's also very inexpensive to rent a box. I would  recommend a safe deposit box rather than leaving your valuables in a drawer at home. Also,  the contents are insured except for a few things such as cash. There may be several things  you should be concerned about in regard to your possessions. However, the contents of your safe deposit box should be way down the list or not on your list at all.

Q:

Is it possible for a bank to operate without insurance coverage for their customer's deposits?

A:

Absolutely not. It is illegal for a bank to accept deposits without having FDIC Insurance coverage for depositors. I remember a story from about 30 years ago when a very tiny bankwas discovered out west in a little village that had been operating for many years without insurance. The population of this little place was less than 300 people. It seems that a bankexaminer was on vacation and drove through this town. He noticed this bank on the corner but he didn't recall ever examining it. So, he checked into it and couldn't find any record of it.  Depositors never lost a dime but, it was illegal. It was immediately shut down. I don't know if he was ever prosecuted. The regulators may have been too embarrassed about it to go to court. The residents trusted the man and he never misled them about having no insurance. It's hard to imagine how this went without detection for so many years. I think better systems are in place to keep this from happening again.

Q:

I get the impression the relationships between banks and regulators are adversarial. Why is that?

A:

There was a time 25 years or more ago that bankers and regulators did have a questionablerelationship. Things have changed greatly over the years and I don't think most bankers feelthat way today. Early in my career they would show up on a Monday morning unannounced.  It was as if they wanted to try and catch us off guard. Examiners were very stone faced and  acted more like a Drill Sargent in the Army. Those days are long gone and examinations areconducted in a more helpful atmosphere. That doesn't mean they are not thorough and professional. It just means, at some point in time, they realized it was not necessary to bully us. Today, we know several weeks in advance when they are coming so that we can prepare the material they want to see. If we conduct business the way we are supposed to, it isn't as much of an intrusion as it was years ago. I have always had a good working relationship with examiners and I don't consider them the enemy. We don't always agree but when thathappens we listen to each other's point of view and come to a decision which is a fair way tohandle it.

January 20, 2016

Q:

Why does it take so much longer now to get approved for and to close a real estate loan?

A:

The short answer is because of our federal government. Law makers continue to pile more and more regulations on lenders that are supposed to protect the general public. All they have  succeeded in doing is to confuse and frustrate people. It takes nearly 30 days, sometimes more, from application to the closing of a real estate loan. All because of the regulations that  we don't like any more than you do. Unfortunately, the lender often takes the heat because there's no one else to blame. Real estate lenders have had to spend a tremendous amount oftime and money to prepare for the newest round of regulations and requirements. Some smallbanks, but not ours, have had to stop making mortgage loans simply because they do not have adequate staffing and expertise to do it right. If you have been one of the unfortunate  individuals who has tried to get a mortgage lately and you have been frustrated by the process,tell your Congressman or Senator how difficult and time consuming it was to get it done.

Q:

It seems like bankers blame the government for a lot of the problems they have. Is this fair?

A:

I have been in this business for over 40 years. I can't begin to tell you how much the federal government has impacted the way we do business. I am being kind when I say that at least  80% of all the new laws and regulations that have been placed on us are idiotic and in some cases downright stupid. All it takes is one person to complain about how they were treated  and the next thing you know, the politicians are making new rules. The mortgage lending crisis  over the past ten years was not caused by banks taking advantage of people. It was caused bypoor lending practices of some unscrupulous mortgage lending operations. However, all the new laws and regulations were put on every lender. I could easily fill 20 legal pads with rules and regulations that were passed during my career that do not do what they were supposed  to do for consumers. These regulations and laws were passed by individuals who, for the most part, never worked outside of elected positions their entire lives. Yes, we do blame our elected officials a lot and they deserve it.

Q:

Why are banks charging to take a large amount of coins if you don't bank with them?

A:

The general public does not know what the cost is for providing various services. If you do not have a bank account with a certain bank and you ask them to take in a substantial amount of coins you have been saving, you will be charged. Why? It's because the bank will incur a costwhen the coin is shipped to the Federal Reserve Bank. My question is, why didn't you take the coin to your own bank? One thing I have learned over the years of being in business is that I  try to never question a business owner about why they charge what they do for a service. The reason being that I don't have any idea what their cost is to provide the service. If I don'tknow their cost, how can I criticize the charge? You can check out the price of an item or a product but you don't have a clue as to how much it costs for a service being offered. It's not  fair for you to expect this service free. Especially when you do not do your banking there.

January 13, 2016

Q:

What would be the biggest financial change if Republicans win back the Presidency?

A:

The Democrats have had the Presidency for the past 8 years. Some would say they made a mess of things and others would say they inherited the problems of the previous President.   The truth probably lies somewhere in between the two opinions. I am not defending eitherside but, each President does inherit some of the good and some of the bad from the  previous one. However, don't expect major changes if a different political party gets elected.  There will be a few of course but, nothing that will make a noticeable difference in your dailylife. What we can hope for is tax reform that will help out American workers and help reduce  the federal deficit. I'm not sure that is possible but, we'll see. Financially speaking, you won't  notice a big difference in your pocket book. Just remember, during a Presidential Campaign,  promises are made and they will likely be broken.

Q:

Wouldn't our economy improve if we stopped allowing foreign companies to import their  products?

A:

Foreign trade is way beyond my level of knowledge. However, I do believe it is a little more complicated than just stopping companies from importing. Ideally, it would be great ifAmerican companies made all the products we buy which would create more jobs. It's just  not practical. Besides, if we did block imports, Americans would end up paying more for  products because labor is cheaper in other countries. The truth is, allowing imported goods  from other countries is a bargaining chip our country uses to keep them friendly to our wayof thinking and to allow us to have military facilities in these countries. If we tried to change  these trade agreements, it would damage the relationships. Please understand, I'm not  telling you it is right or wrong. It's just how it is and always has been. Trade agreements are avery complex issue and although I don't have the answer for you, I would not be too quick tosay that they are a bad thing.

Q:

Is the U.S. far superior to other countries on financial matters?

A:

Well, I believe most people think we are superior in just about every way you can imagine. However, I believe as a nation, we are a bit arrogant when it comes to comparing ourselves  to other countries. We are constantly trying to tell other parts of the world how they should live their lives. We are a very young nation. It's one of the youngest in existence. Most of usseem to forget this. Other countries, like many in Europe, are centuries older than us and  they have had 100's of years to learn and develop their skills and knowledge before we cameinto being. I think the U.S. has some of the best financial talent and knowledge anywhere inthe world. However, I won't go so far as to say we are superior. Our leaders would be well   advised to spend more time trying to be the best we can be and less time on trying to  convince other countries that we are smarter than they are and telling them how to live. Thesad part is that the most intelligent individuals in the USA are not making the decisions for  our country. That's obvious.

January 6, 2016

Q:

I received a phone call telling me I won a lot of money. What should I do?

A:

I'm going to give you the best advice you have ever received. Do not contact these people, do not send them money or anything else they asked for. Telephone scams are becoming more frequent and you cannot fall for it or you will be sorry. Publishers Clearing House is one thatis used often simply because it is a well-known contest. These people have no conscience and  they will take money from anyone even the elderly on a fixed income. It doesn't matter to them whether you can afford the loss of money or not. When you get a call like this, hang up the phone. Don't be concerned about being rude. The chances of this being real are very unlikely. In general, people want to believe this is really happening because it would change their lives. If you want proof, ask them for a phone number where you can call them back with your lawyer present. This will end it quickly. By the way, if you think it wouldn't happen  in our small town, think again. It already has.

Q:

Financially, what should you consider on buying a new car vs. a good used car?

A:

If you are looking at it strictly from a cost standpoint, a two or three year old car is always going to be cheaper but, there is a bit more to consider.  There are some who are willing to pay more to get a new car and there is nothing wrong with that if you can afford it. Others  are a little bit more cost conscious and they are willing to buy a used car to save money.  However, in virtually all cases, it really comes down to what an individual can afford. I think most people would want a new car if they could afford it.  So, to answer your question, buy what you want as long as you can fit it into your budget. Don't stretch your budget and put yourself in a position where it would be difficult for you to meet your obligation. If you have doubts, you may already know the answer.

Q:

With housing values taking a big hit the past few years, can you ever justify building a new home?

A:

If you are strictly looking at the cost between new and used you can't justify it. However, theprice is only one consideration. The primary reason most people build new homes is they want it built to their specifications. They want to pick out the plans, the lighting fixtures, the woodwork, the cabinets and other things that personalize the home. It is very rare for someone to find an existing home just exactly like they want. Buying a previously occupiedhome will sacrifice some of what you would like to have in order to avoid the headachesof going through the building process. To some, it doesn't matter that it will cost more orthat there will be headaches and frustration to go through the building process. Building a new home is not justified by the cost. It's justified by your preference over buying a home previously occupied. I would not criticize anyone for making one choice over another. 

December 23, 2015

Q:

Is it true that productivity in the workplace is down during the holidays?

A:

It's not fair to employers who are paying them to be there but, it does happen. Also, a lot of workers save vacation time to be at home with children and family which affects  productivity. There are some factories that actually shut down for a week around Christmas time for this very reason. Retailers are different because it is their busiest time of the year and they can't afford to have their employees unproductive and they can't shut down. The service industry,  like banking, cannot close for an extended time during the holidays either. Customers need access to their cash and we have to be there to supply it to them. So, your bank typically closes just for Christmas day. There are probably other reasons why productivity is down during the holidays. However, I think it depends on the type of business you are in. A lot of research has gone into this subject so, a decline in productivity during the holidays is probably true.

Q:

Is there a dollar amount for Christmas gift spending that relates to household income?

A:

There is no financial magical number on how much to spend. However, there is something thatyou can use and that's common sense. I don't think anyone should go in debt for Christmas gifts but, some do. Credit card debt goes up and people spend money they don't have. I know  parents want to give their children a good Christmas. However, going in debt to do it is just short sighted. If you are one of those people who do this, consider opening a Christmas Club  account. This will help greatly to keep you from making a huge mistake with your credit cards. The thrill of buying those gifts for your family turns into remorse in January when you  receive the bill for the things you bought in December. Buy sensibly and save yourself from accumulating debt you can't afford to pay back. If your kids are not happy because they didn't get everything they wanted, it's probably time for a frank conversation about familyfinances.  

Q:

You can't possibly know the circumstances of everyone that asks you questions. So, how doyou answer them?

A:

You're absolutely right. I don't know the circumstances of everyone that asks me a question. However, when it comes to common sense, the rules don't change from one person to theanother. They apply to everyone. Yes, we all forget from time to time to use common sense.That just makes us human. But, I think all of us know when we are not using it in our personalfinancial decisions. We just choose to ignore it. I'm not referring to the wealthy that don't  worry about how much money they spend. It's about the average person who doesn't have an unlimited supply of money. So, answering financial questions with common sense answers does not require me to know anything about your personal financial situation. We all make  financial mistakes from time to time and the best we can hope for is to keep them at a  minimum and totally avoid making the big mistakes that jeopardize our financial future.

December 16, 2015

Q:

I know the rental business was a little down for a while. Is it safe to get back in?

A:

The individuals who know how to manage rental property never got out. They stuck with it even with the real estate crisis lasting for an extended period of time. My views are very simple when it comes to being a landlord. The successful ones do not have a substantial debt to service on their units and they are careful about who they rent to. The ones that struggle inthe rental business are those who have not experienced hard economic times, they have to hire all the work to keep them in shape, they have a high debt to value on their properties and  they make too many mistakes in who they will rent to. Yes, landlords may have experienced some problems with collecting rent during the recession. However, it did not take the good ones down. I don't care if the economy is good or bad. People should not get into the rental business unless they have a lot of experience or some very deep pockets because it can getexpensive. If you know nothing about residential rentals or real estate, I would stay away from it. It's a tough business.

Q:

Why is it so difficult to get a loan to start a business?

A:

If the individual applying for a loan can produce the numbers to support the request and provide sufficient collateral to secure the loan, it isn't difficult. We are very receptive to loan requests of this kind. However, if an individual has not done appropriate research on the need for this type of business and they expect the lender to take all the risk, it will probably not work. All too often, people go into business for all the wrong reasons. They don't make the needed preparations to prove to themselves or the lender that they can service the debt. Also,   the failure rate within the first five years for a new business is high. If you want to start a newbusiness, you need a good business plan, proper research to support the need for it, collateralto secure the loan and some experience in the type of business you want to start. A lack of any  of these components will make it more difficult to succeed.

Q:

Is there a risk in buying a retail store that has a lot of cash income?

A:

Buying a business with a lot of cash income is not risky if all the cash income is reported. If you are buying a business with a lot of unreported income, you better think twice. Especially if theyare basing the sales price on the unreported cash. First, what they are doing is illegal and you  don't want to mess with the IRS. Second, you would be taking the word of the owner on howmuch unreported income there is which could lead to you paying more for the business than  it's worth. If you go to a lender to buy the business, they will not use any unreported incomeinformation in determining the ability of the business to service the debt. I won't pass  judgment on those who hide income. However, from a lending perspective, no legitimate and honest lender will take this information and use it. Even if you can afford to pay cash for the business, don't pay a price based on unreported income by the seller. If they would cheat theIRS, they wouldn't have any problem cheating you.

December 9, 2015

Q:

What is the percentage of taxpayers that file tax returns without assistance?

A:

According to one source, at least 60% of taxpayers receive help in filing their return. Which means that 40% or less file their own. This doesn't surprise me. Over the years, tax returns have become more complicated and the rules for filing change more often. People are more afraid of making a mistake by over paying or under paying because of these changes. Obviously, the more complicated a person's return is, the more likely they are to have assistance in preparing it. In addition, a lot of people think they are more likely to be audited  though we now have the opportunity to file our taxes on line, I still think a majority choose to  have them done by a professional tax preparer. Saving a little bit of money by preparing it yourself could end up costing you more. However, there are exceptions.

Q:

Is it true that more people are getting extensions in filing their tax return? 

A:

One article I read stated that 5.5 million businesses and 9.5 million individuals filed for an extension on their return last year. This is a substantial number and I believe it is a growing number. Individuals and businesses file for extensions for a number of reasons. I suppose themost common one is that they do not have all there material together to give to theiraccountant. Or, maybe there have been some substantial changes in their lives toward the  end of the year that significantly impact their financial situation. I suppose it's possible that  the accountant who does their taxes is over loaded and needs extra time to give it the  attention the client needs. It's even possible that the taxpayer knows they will owe a large amount of money and they want to put the pain off as long as possible. I really can't speak to the subject with authority because I have never filed for an extension.  

Q:

Some of the Republican Presidential candidates are calling for a flat income tax. Would this  work?

A:

I'm not a tax expert but, it's an interesting concept. The idea of a flat tax is nothing new. It comes up from time to time during political contests. Basically, it does away with itemized deductions and everyone pays the same rate regardless of income. If the flat tax rate were10% this means a person making $10,000 per year would pay $1,000 in taxes and the personmaking $1 million per year would pay $100,000. The idea behind the flat tax rate would make wealthy people pay their fair share rather than giving them all the deductions they currently receive. I would not get too excited about this happening whether you like the idea or not because it is not likely to ever happen. Pressures from lobbyists representing thewealthy will see to it that it never gets approved in Washington, D.C. Even if someone were elected President who was in favor of it, the President alone could not make that decision. It's just another empty campaign promise to help them get elected.

December 2, 2015

Q:

We are getting close to year end. What financial tips should I consider for 2016?

A:

Basic financial tips for a New Year never change and they never grow old. If you struggle with money, you should try to be more disciplined in 2016. Everyone spends money on items that are not necessary. We all do it. Redirect some of that spending to a savings account. It might not be much but, you need to start somewhere. Or, are you spending a lot on entertainment or snack food that you can do without? Also, vacations are nice but, if you are not saving any  money and you are taking lavish vacations, you might want to rethink your priorities. If youhave not refinanced your home to a lower rate, you might want to check that out to see if you can reduce your monthly payment. There are many things the average person can do to make their financial picture look better. It just takes desire, persistence and being honest  with yourself.

Q:

Why is it that so many people want to give their kids a better life than they had? 

A:

I think every parent wishes that for their kids. However, some are honest enough to know they can't and others are not so honest with themselves. My comments are strictly from a  financial perspective. You shouldn't break yourself financially in order to give your children  more than you had as a child. Your financial obligation is to feed and clothe them and put aroof over their heads. If you can do more you should. If you can't, you shouldn't and if you raised your children properly in a financial sense, they will understand what you can and  cannot do and they will accept it. If they don't accept it, you may not have done your bestin teaching them about proper financial values. Many of us did not grow up in a financiallyprivileged home but, we were taught what is right and what is wrong. Not disrespecting our parents when they said no was one of those lessons learned. By the way, we knew what the outcome would be if we chose to not accept an answer of no.

Q:

Why do you think the younger generation has problems financially?

A:

It isn't going to be a popular answer with some but, here goes. I think it is equal parts parenting and our government. Many of today's young adults were not taught work ethic like the previous generation was. We see evidence of this all the time in the business worldand it can be very frustrating. Our government's role in this is very simple. Politicians have created so many subsidies that it has become a feeling in young people that they don't have to worry about money because the government will take care of them. This isn't speculation.  It's the simple truth. Look at protestors on the streets in big cities. You don't see many over  the age of 50 because they are working and don't have time for it. It's usually young people that wouldn't have the time either if they had a job. For those of us who were taught at a  young age that you have to work for what you want, it is disgusting. Our government hascreated a new generation of people who feel that they are owed a living. How can we  reserve it? It starts at home with parents.

November 25, 2015

Q:

Do you have any thoughts on interest rates for 2016?

A:

I know there has been a lot of talk in the media the past year about interest rates going up. There were predictions that rates would go up by certain dates and those dates passed withno change. Now, they are saying that rates will go up by the end of 2015 or during the first quarter of 2016. The truth is, the economy has not improved enough to justify an increase in   rates. As a matter of fact, if the Federal Reserve raises rates very soon, it will likely be  politically motivated. Loan demand for banks is still very weak and retail sales are not that strong. Each month, the government releases a report on new jobs created and it is always under 200,000 for the entire country which is a low number. The true indicators that would  prove the economy is better are higher job growth numbers and reports that retail spending has gone up significantly. We are not seeing either at this time.

Q:

We are seeing more and more ads on TV for buying gold and silver. I know you discourage  gold purchases. Is it the same with silver?

A:

For the average individual, it is always unadvisable to invest in anything that you don't understand. Very few understand the gold and silver market. As I mentioned previously, there are wealthy people who can buy and sell precious metals in very large quantities and have a big impact on the market. I don't like investing in anything that can be easilymanipulated. If you are well above average financially and you can afford to lose some  money, take the gamble and invest in these things. If not, I don't think it's for you. Many  years ago a wealthy family by the name of Hunt ruined the silver market by buying and selling a large quantity of their silver in a short period of time. It was a big story for a while.    I've seen the ads you are referring to. These companies pay actors to market gold and silver and I'm confident they don't have a clue what they are talking about. They are paid actors and nothing more.

Q:

What do you think about these stores that offer financing with zero interest for a certain amount of time.

A:

I think it is a marketing scheme that works very well for them. Unfortunately, what most people don't understand is they are paying more for the product. Retailers are building in a  cost on financing what you are buying. Large furniture and appliance retailers have done thisfor a very long time. They offer 2 to 4 years financing at zero interest and I'm sure it depends on your credit score to get the zero interest. If you qualify, they build in a higher price on thefurniture to offset the loss of income. I am not discouraging anyone from taking advantage  of this type of purchase or financing just as long as you realize you may be paying a bit more for the product in order to get the deal. Also, there is a very large margin from what they pay  for the product at wholesale prices compared to what you will pay.

November 18, 2015

Q:

Did banks make more mistakes before they had computers?

A:

Checks, deposits, loan payments and everything else you can think of were all posted by hand before computers. Human error back then was much more likely than today with computers.I started my career before computers and I have to be honest with you. At first, we were  scared to death of them. In those early days, we just could not comprehend how this new technology worked. For a period of time, a lot of banks continued to post transactions by  hand in addition to the computers to make sure they were accurate. That sounds a bit funny today but, you must remember, this was brand new to us. A lot of older bankers could not adjust to this change and they simply retired rather than to deal with the changes in how we conducted business with computers. Fortunately, I was young enough that it wasn't hard for me to adjust. I think the banking industry did a great job of minimizing errors before computers. However, using computers has greatly minimized the chance of error versus posting transactions by hand.

Q:

Do bankers have any concerns about farmers and the poor planting season we had?

A:

Any time a segment of our customers go through a tough period, we are concerned for them.The poor planting season is going to dip into the pockets of agriculture. We all know that.However, most of the farmers in Northwest Ohio are above average in terms of how they operate and how they handle their finances. With that in mind, we believe they will be fine.If this were the third straight year of poor planting conditions, it might be different. Since thisis the first time in several years we have been through this, the farmers can and will survive  it. Most farmers have crop insurance which will cover most of their loss but, I think if you were to ask most farmers, they would rather have a crop to harvest this fall. Overall, I thinkNorthwest Ohio farmers will come out fine and they will be ready to hit it hard come next spring.

Q:

What is the purpose of banks being examined by the government?

A:

Bank deposits are insured by the FDIC which is a government agency. If you are a state chartered bank, like ours, examinations are performed by the FDIC and the State of Ohio Division of Financial Institutions. Their purpose is to determine the condition of a bank. During the first 15 years or so of my career, examinations used to be unannounced. We didn't know they were coming until they showed up on our door step on a Monday morning. The relationship between bankers and examiners was very tense and often confrontational.   Over the years, they have changed their approach from one of being an adversary to one of being helpful. We know they are coming as much as 6 weeks in advance. Examinations serve a useful purpose in protecting depositors as well as the communities the banks serve.  However, we do not rely on federal and state agencies to tell us how we are doing. We expense a significant amount of money each year for outside audits and other processes to  insure that our people are well trained and following rules and regulations.

November 11, 2015

Q:

Since the economy is one of the most important issues, is there something we should watch for from Presidential candidates?

A:

Politicians lie as easily as they breathe. However, if you want to take a chance on them telling  the truth, I would look to see how each one proposes to fix the National deficit without raising taxes. In other words, who is willing to make the tough decisions to cut spending in areas that should be cut but, no cuts to Social Security and Medicare. Don't vote for anyone who would threaten to do that. I am referring to spending cuts in areas like subsidies that allow people to stay home and not work when they are capable of doing so. I'm referring to funding programs that have no real benefit to the American people. If they are not willing to do that, they do not deserve your vote. However, you need to be realistic about it. Just because they say they will do things doesn't mean they can. They have to get backing from  the governing bodies in Washington and that may be a problem.

Q:

The people in Washington, D.C. are talking about a new program to make college more affordable. What do you think of that?

A:

I don't like it for one simple reason. It's another program that will take tax dollars. If your kids want to go to college and you can't afford to pay for it, tell them to work for it just like  millions of other people have done. There has always been and always will be a percentage of the population who will not be able to get a college education. That doesn't make them  less important than those who can afford it. There are jobs to fill at all levels. The idea that we should all pay for someone's child to go to college is unacceptable to me and probably to most Americans. It would just be another unwarranted subsidy. Back in the old days, kids  helped out with a part-time job. Many parents took on second jobs to pay for their kid's education. We are a country that is already in trouble financially and I will never understand those who are looking for new ways to spend money that we don't have. That doesn't workin your personal finances and it won't work in our government.

Q:

Do we really know how much of taxpayer's money is spent on subsidies?

A:

I'm not sure we do. Keep in mind that government subsidies includes a lot more than just welfare related items. It also includes the subsidizing of other programs that may or may not be beneficial to taxpayers. There are billions of dollars given to programs under the heading  of research. Some of the research is warranted but, some of it is not. There is money given to  research things like behavioral habits in certain animals and plant life neither of which provide any meaningful benefit to us. I think if we were to see an actual list of things like this that are funded by our tax dollars we would be in shock. This type of thing plus the numerous welfare benefits are areas that need to be addressed. We can't continue to do these things if we truly want to resolve our countries deficit issues. The problem is, every politician supports different special interest groups and it is hard for them to come to a consensus as to what programs should be cut. It will take people who do not fear for their re-election. I heard it said that the only way to get things done in Washington is to limit them all to one term. That  way, they won't worry about being re-elected and they will do the right thing.

 

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