About Me 0110: Making Money Advertising

But borrow that same amount on a credit card, and you're likely to pay a much higher interest rate. And on top of that, odds are even better that, at some point, as you pay down the card, human nature will take over, you'll eye some amazing gadget in a store and you'll whip out your credit card. The $10,000 that had shrunk to $8,000 is now back up to $9,000. And you're going to stay in debt all that much longer.

So is it a good idea to take out a personal loan instead of, say, charging your purchase on a credit card, taking out a home equity loan, taking out a second mortgage or asking your bank for a line of credit? Here's what a few experts had to say.

"This is a terrific idea on paper," says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. But she cautions that if you already have credit cards, going for a personal loan can be problematic. "The consumer, regardless of how well-meaning he is, will typically run up his charge cards and, at the end of a year, owe the bank and the credit cards. So often, things that work well mathematically [on paper] don't smoothly translate into practice."

Theodore W. Connolly, a bankruptcy lawyer and co-author of the new book, The Road Out of Debt: Bankruptcy and Other Solutions to Your Financial Problems, says, hands down, "Personal loans are a much better choice." Why? "Basically, I see credit cards designed so you don't rush to pay them back, whereas personal loans are designed for the regular repayment."

The only caveat, of course, is that if you're going to take out a personal loan, you'd better have a really good reason to do so. After all, you're about to commit yourself to going into debt for a number of years, so hopefully you can say "yes" to the critical question: Will it be worth it to be in debt for three or four years because of this loan?

Regular readers of my WalletPop posts know that I have a rich history of being cash poor, and about 10 years ago, I took out two personal loans from Wells Fargo within a few months of each other. They were around $1,500 each and designed to be paid off in about three years. When I took out the loans, I knew they were predatory loans aimed at people who didn't mind or didn't care that the interest rate was high. But I was desperate. I accepted them.

As lousy as these loans were, however, they weren't credit cards. I made my monthly payments, struggling some months to do so, and three long years later, the loans were paid off. Compared to many of the alternatives -- and if you truly believe you can make the payments -- I'd have to say taking out a personal loan could work out well for some people. Connolly thinks so, too.

And Cunningham is for it, but only if the borrower is extremely disciplined and not trying to be too clever about how he or she is managing their debt. "Consumers need to remember that moving debt around is not paying debt off," says Cunningham. "So often people think they're being savvy money managers when, in fact, they're not better off this year than last."

Geoff Williams is a frequent contributor to WalletPop. He is also the co-author of the book Living Well with Bad Credit.

George Will downplayed the impact of corporations buying our elections by comparing the amount of money they're spending on political ads to what they spend advertising their products. I have to say I agree with Otherday at Daily Kos who after reading Will's column in the Washington Post where he said the same thing, Will just made the case for public funding of our elections.

Maybe he ate some sour stewed prunes, but George Will was off his game, again. His latest essay was meant to be the usual, over-the-top Obama-bashing exercise that swirved off course into making wonderful arguments why we should have publicly financed elections. George Will's argument for public campaign financing.

For example, Mr. Will tells us how inexpensive it would be to pay for such a national, public election program. To pay for a two-year cycle for all elections is about $4.2 billion, and he shows us how doable that is:

That is about what Americans spend in one year on yogurt but less than they spend on candy in two Halloween seasons.

George Will is exactly right: we can easily afford that!

Here's Will's hackery on This Week pretending that voters don't care about the issue, when actually they do. It's just the beltway Villagers who are desperately trying to convince everyone this doesn't matter:

GEORGE WILL: Two points about money. First of all, in this gusher of money we may spend this year in the two year cycle $4.2 billion, something like that. That's less than half of what Proctor & Gamble is going to spend advertising its products in one year. It is approximately what Americans will spend on yogurt this year. This is a rich country and the fact that we spend so little trying to influence the selection of those who will make and administer the laws is the amazing thing. Second, surely we're learning as we repeatedly do every two years the declining marginal utility of the last political dollar. There's just so much you can do in throwing stuff on television.

AMANPOUR: Well, explain that. Do these ads work? First of all, the issue of transparency is a big issue and a legitimate issue transparency.

WILL: It is not a big issue for the voters of this country that when losing political movements such as the Democratic Party at this moment want to talk about process. No one cares about process.

George, I tell you what, if it doesn't matter and it's just fine to allow corporations to buy our politicians, lets make them all walk around like NASCAR drivers with all of their sponsors' logos on their jackets so we know who bought them.

Friday, November 19, 2010

Making Money Advertising

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