How can anyone understand all these financial things without an
I know a lot of people without educations who do very well with
their finances. The problem is not a lack of education when
it comes to finances. Even the least educated person knows
right from wrong when it comes to spending money. If you
don't have it, you can't spend it. If you have bills to pay,
housing, food, utilities or monthly loan payments, those come first
before you buy something you don't need. That doesn't take an
educated person to figure out. Most individuals want to
ignore what's right because it conflicts with what they want.
All it takes is a piece of paper and pencil. Subtract your
expenses from your income and if there is anything left, then you
can decide if you can afford the things you want. If you can
read this article, you are smart enough to understand.
Keeping your finances in order takes discipline and the desire
to do better. Those two things do not require an education
I was shocked to read about the number of individuals who have
student loan debt many years after graduation. Are these
Unfortunately, the stories you are reading are true. Many
times I have seen financials from individuals who are in their 40's
and even 50's and they still owe student loan debt. An
individual with student loan up into their 30's is not unusual
especially if they have a masters or doctorate degree.
However, for someone to have this hanging over their head in their
late 40's and 50's is not reasonable. It happens for a couple
of reasons. One being that the cost of an education has
gotten ridiculous to the tune of $50,000 per year at some schools.
The other reason is the student's lack of knowledge about finances
when they borrowed the money. There are over 38 million
individuals with $1 trillion in student loan debt in this country
and the number is growing every year. Some have total debt of
$150,000 when they graduate. Many of the jobs they are taking
after graduation do not support that kind of debt.
What is the economic impact on a community when there is a
severe winter like this one?
It's not just the community. It's businesses, schools and
individuals. In addition to the fact that people can't get
out and shop, the store owners have the cost of snow removal and
employees who still need to be paid. There are severe natural
gas bills for heating and damage is done to the roads and
streets. Nationwide, I would imagine there are billions of
dollars in extra expense and billions of dollars in lost sales due
to the weather. However, it isn't just the winter that hurts
people financially. Droughts in the summer cause damage to
farmer's crops and people tend to stay indoors in extreme
heat. Mother Nature can have an impact on us financially in
just about every type of severe weather. It's part of life
that we learn to cope with and no amount of worrying is going to
change that. We just have to adjust.
When a person is preparing to retire, what item of expense is
the hardest to plan for?
Since most of your fixed expenses will probably be about the
same as when you were working. I would think that the hardest
expense to budget would be unexpected medical expenses. You
know there will be times when you get sick and medical expenses
arise that you did not plan to have. Sometimes it isn't a
significant amount but, other times it might be. Obviously,
you will have insurance by, it may not be enough. I don't
think there is any way to accurately anticipate medical costs as
you get older. That's why it is important to have a cushion
for the unexpected events in your life. I suppose another
area of concern, especially if you are in an older home, is major
repairs to the mechanical system or other home repair
expenses. None of us like financial surprises but, they do
Is there any hard evidence that a college graduate will make
more money than someone without the education?
We see articles all the time that claim higher education means
more income and success. I have no information to the
contrary so assume this information is correct. If a person
has the opportunity and finances for an education, they should get
it. However, I know people who have an education who are
working in jobs that don't require it and these are those who don't
have it and they are highly successful. I have always felt
that an individual's success is more about how much they put into
it. They just have to work hard to attain it. I've
hired a lot of people throughout my career. Work ethic and
common sense have been as important, if not more so, than the
education level. No one should ever let the lack of a college
education stop them from pursuing their dreams. An education
is important if you can afford it but, so are hard work and
Years ago, companies used to offer pensions. Why has that
Before I answer, please understand that my comments are geared
toward large profit oriented companies and not those that are not
for profit organizations. There may be a handful of companies
that still do it but it's rare. It is true that many years
ago long term employees retired with pensions paid by the
company. The reason this is not prevalent today is
inflation. Salaries and hourly wages have risen along with
the cost of living and it's just too expensive for companies to do
this today. It might be unpopular to say but, I think unions
have had a big impact on this. They fought for more and more
to the point that total compensation has nearly broken many
industries. The auto industry is an example. Two of the
major auto companies have been bankrupted in the past few
years. High wages and the inflated benefits won by unions had
a lot to do with this. I'm not alone in this thinking.
A lot of financial experts smarter than me would agree on
this. Allowing the unions to have their way just got out of
Has the bad economy the past few years kept people from starting
new business ventures?
I'm sure it has. Over the past 7 to 10 years, we have seen
record numbers of businesses close. Some closed because
people stopped buying the products they sold. Others who were
able to stay open in good times in spite of poor management
practices, were exposed during hard times and they failed.
They happened frequently. The past few years have been the
worst possible times to start a new business. However, there
have been some who successfully started new businesses with a
degree of success. The reason for their success is that they
put in a lot of cash to avoid borrowing heavily. Although the
banking industry has been cautious in lending for new businesses,
we are still very willing to consider deals that make sense in
terms of their ability to repay the debt.
News sources have been saying that banks are hurting the economy
because they are not lending. Why?
The news media is getting these ideas from the worst possible
source which is the federal government. Banks cannot make a
profit for their shareholders if they don't make loans.
That's how it is and how it's always been. This especially
holds true for community banks. We have been an easy excuse
for Washington D.C. as a reason why the economy is not getting
better when D.C. politicians are the real reason. They can't
stop fighting long enough to do what needs to be done. If
someone comes to us with a loan request and can prove they have
sufficient income to repay the debt, we are more than willing to
make the loan. This is no different than it was prior to the
recession. If someone tells you they can't get a bank loan,
there is a pretty good chance that they are unable to show the
ability to repay.
Why is it that the two political parties seem to have much
different views on paying government subsidies?
The differences may not be as big as you might think but, I will
answer your question from a financial point of view. Those
that are opposed to the subsidies are looking at it from the
viewpoint of how our tax dollars are being spent and I would hope
there are some on both sides of political parties. The system
of providing subsidies is broke and it needs to be fixed.
Unfortunately, there are not enough politicians who are willing to
take up the fight to fix it. It is estimated that fraud in
the welfare system is costing us in the billions of dollars a
year. By "us" I mean tax payers. If you ever hear a
politician say the system is working as intended, that person is
not paying attention and needs some help. Between fraud and
subsidies that should not even be offered, it would probably wipe
out the national debt if corrected. Don't expect that to
happen any time soon.
Does Ohio have any advantage over other states from an economic
It depends on your point of view. I believe Ohio has 5
cities with populations over 200,000. I don't think there are
more than 5 other states with that many. We have more
colleges and universities than many states. There are
probably 25 or more. Some states have fewer than ten.
We have 12 million people in Ohio. There are some states,
like West Virginia, that are smaller than Franklin County,
Ohio. You would think that all these things give us an
economic advantage and when the economy is good, it probably
does. However, when things are the way they have been the
past 7 to 10 years, it works against us. We have a higher
than average unemployment rate and manufacturing is down from
normal production. If you balance out the good with the bad,
I would say we don't have a distinct advantage. However, one
thing in our favor is that we are very diverse. We are not
dependent on one particular industry for our survival. Being
a Buckeye is a good thing.
Someone told me that short-sales are so common today that it
doesn't impact a person's credit rating. Is this true?
The housing market crash brought on the concept of the short
sale to decrease the number of foreclosures. People with very
little invested found themselves owing more than the house was
worth and they asked the lender to allow them to sell it for less
than owed on it. This mostly happened with people who were in
financial difficulty. It is wishful thinking on the part of
anyone who thinks they can do this without damage to their credit
standing. It does and it should hurt someone's ability to
obtain credit. As far as I'm concerned, short sales are
another example of the attitude of many in our society today.
Let someone else pay for my mistakes or bad luck. Yes, I feel
badly for people who have been hurt by the economy and the bad
lending habits of some mortgage lenders. However, those
individuals made the choice to buy the property. No one
forced them to do so.
Recently, you answered a question about there being a risk in
investments other than insured bank deposits. You would still
get your original investment back wouldn't you?
Not necessarily. I would guess that a large percentage of
people have stocks and bonds in their retirement funds. As
long as they keep them until the maturity date and if the entity
that issued them doesn't go broke, you should get your original
investment back. However, if the market and the credit rating
of those investments falls, you may get less than you paid if you
try to sell them before maturity. If you are relying on your
retirement account for income when you retire, it might not be
there. When purchasing stocks or bonds, you are not
guaranteed the money back if you sell it early. The average
investor either doesn't know this or just chooses to believe the
full amount will always be there. There are a lot of people
who watch the market value daily to guard against any unexpected
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