IS THERE LIFE AFTER BANKRUPTCY?

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The good people at “Moneywise” magazine have recently published (Jan 2011 edition) a story about bankruptcy, which contains a useful summary of the danger signs that debts might be running out of control.

  1. You use your credit card to buy groceries or to pay bills, not knowing when you’ll be able to clear the balance.
  2. Applying for a new credit card, loan or extension on your overdraft is the only way that you can get ready cash for daily expenditure or to service existing debts.
  3. Your debt is mushrooming because you either only make minimum payments each month or are unable to pay off any money owed.
  4. If you have started to miss monthly repayments on your credit card or, worse still, you are in arrears on your mortgage, you need to seek immediate help. Contact creditors to see if you can make reduced payments or have a mortgage break while you sort out your finances.
  5. If you are not opening bills and are screening calls from creditors, seek advice. Ignoring payments will not make them go away and the problem will only get worse.

The article contains some interesting case studies, of three people who had to file for bankruptcy: 32-year old Emma Smith from Milton Keynes; 54-year-old Terry Donaldson from Huddersfield and 27-year-old Michelle Cheston from Newcastle.

I noticed one unusual silver lining to these three clouds. There are costs associated with going bankrupt (typically about £600) but, as the article mentions, Michelle had served in the RAF. Not for long, because she could only have been 24 when she left the service. However, her adviser at Citizens Advice told her she could apply for help to the Royal British Legion. She did; and they paid all her fees. As I mention in my book “Back to the Black”, the Legion’s support is a benefit that is open to anyone who’s served in the UK armed forces, even for a relatively short time.

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Want to know more?

  1. Want a copy of the full Moneywise article? Go to http://www.moneywise.co.uk/node/7896
  2. Want to view, free of charge, the first 20% of my multi-format eBook “Back to the Black: how to become debt-free and stay that way?” Go to:  http://www.smashwords.com/books/view/22886

POLITICIAN SAYS WHAT HE’S THINKING

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Shock horror: the guard drops. A politician saying what he’s thinking. Malfunction of usual filter system.

Radio 4 interviewer on ‘Today’ programme this morning: “Your party normally does well in by-elections; how do you explain … ” (i.e. the fact they didn’t win the Oldham East by-election)

Lib Dem President Tim Farron: “We are also a party that is not normally in power. Don’t know if you’d noticed.”

Could this start a trend? I doubt it Quite a few LD people have committed indiscretions lately, though rarely live on ‘Today’. This was different; a gentle rebuke for an ingenuous question.

I’d love to see a similar phenomenon when sportspeople are interviewed just seconds after finishing their match or event. For example:

“How do you explain the fact that despite ….. you lost to Usain Bolt?” (this was actually asked, in even more patronising terms, of Asafa Powell, one of the pre-tournament favourites, immediately after the Beijing 100 metres final.)

“Well, Gary (apologies; it wasn’t Gary Richardson but I just have this thing about his questioning style), I ran as fast I could (maybe I even ran a personal best) but he ran even faster. Don’t know if you’d noticed … but he’s pretty good.”

Sadly, it won’t happen very often, thanks to a combination of politeness and the media training that all public figures (politicians, sportspeople and celebs of all kinds) get nowadays. Politeness is a virtue I value; but in these situations I’d appreciate a little less of it.

UGLY FONTS MAY AID RECALL

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Do “ugly fonts” help us remember what we read? Is the everlasting trend towards making information more “readable”, and in general easier to digest, counter-productive? There was an interesting piece on Radio 4’s “Today” programme this morning, together with a very short and unscientific test of the theory: from three short pieces on three different subjects, all the presenter could remember about the text she’d been shown in Arial was that it was in Arial.

I said the test was “unscientific”, not just because it was so short (they probably had to leave enough time for yet another weather forecast) but also because I strongly believe that interest is the key to memory. If she’d been shown three pieces of text in three different fonts, but all on the same subject, then we would have removed a very significant variable.

If this theory is true (and it seems logical that making our brain work harder will aid recall), then my wonderful Kindle is too easy to read! Maybe it needs more font options. It currently has the choice of a “regular” typeface, also “condensed” and sans-serif.

I was somewhat surprised when I found that the Kindle’s “regular” typeface was a serif font; I’d always heard that sans-serif was better for reading onscreen, serif for print. Maybe the point is that the Kindle is designed to be as close as possible to the experience of reading from the printed page.

IS IT SAFE TO PAY YOUR RENT OR MORTGAGE WITH A CREDIT CARD?

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A recent news item (Channel 4 News, I think) flagged up a potentially alarming problem that’s been caused by the recession. (Yes, that’ll be the recession that the experts say is now officially over. Try telling that to someone who has lost their job.)

 

What’s the problem? According to a report by the charity Shelter, there’s been a large increase – possibly 50% in a year – in the number of people using credit cards to pay their mortgage or rent.

 

Does this affect owner-occupiers? Or tenants? Or both?

 

According to the BBC website, the Council of Mortgage Lenders (CML) suggests that the problem has been sensationalised by the media. That may be true. It would not be the first time. I should point out the obvious, however: the CML’s concern is only for mortgages. What Shelter describes may well be more of a problem for tenants than for homeowners. Mortgage rates are exceptionally low at present, so it’s less likely that an owner-occupier will have difficulty meeting housing costs, other things being equal. Also mortgage payments are normally taken on a direct debit, the CML says.

 

The reduction in housing costs caused by low mortgage rates has not yet been mirrored in reduced rents (why not?? Logic tells me it should be). Therefore, other things again being equal (which they never are) a tenant is more likely to be tempted to solve a short-term cash-flow problem by paying the rent with a credit card.

 

Is the story true?

 

“In the current climate”, I would not be surprised if there has been an increase in the number using cards. But has the increase really been 50% in a year? That’s massive. What they say, if you read the various reports, is that it’s gone from 4% to 6% and that is indeed an increase of 50%.

 

Firstly, you’d have to ask how big was the sample; obviously they didn’t interview everyone in the country (well, they didn’t ask me, anyway). And secondly, here’s a bit of a giveaway. Last year’s survey calculated the number of households, rather than individuals, that fell into this category. However, “the figure for households has not been calculated this year”, according to the report. So are we comparing apples with oranges, to make a point?

 

So is it safe to pay with a credit card?

 

Back to the question at the top of this post; is it safe to use a credit card to pay your rent or (less likely) your mortgage? The answer is a cautious yes, but only under certain circumstances. Credit cards do not have the astronomically high interest rates of payday loans, but the principle is the same. IF there is no alternative, and IF you are 100% sure you can pay off the card in full before the interest kicks in (you have 4-6 weeks to do that) then fine. If not, then as I have said many times before … get help from one of the debt advice agencies (for example Citizens Advice, or Consumer Credit Counselling Services, or National Debtline) and put together a plan. If you don’t, you could find yourself on a slippery slope.

 

I’ll be following up this story. “Watch this space”, as the saying goes.

 

 

 

WANT TO KNOW MORE?

 

Here’s a piece on the website of Shelter, who produced the original report:

 

http://england.shelter.org.uk/news/january_2011/2m_pay_for_home_on_cards

 

And here’s an item about the story on the BBC website:

 

http://www.bbc.co.uk/news/business-12120937

 

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My book “Back to the Black: how to become debt-free and stay that way” is now available to sample or buy, as a multi-format e-book, at: http://www.smashwords.com/books/view/22886

 

UK RAIL LINES IN THE HEADLINES AGAIN

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Just when British rail travellers thought they had seen the end of travel miseries caused by the ice and snow in the weeks up to Christmas, they’ve been hit with steep fare increases. The average fare hike is double the inflation rate and some fares will rise by 12.8%. Meanwhile promised improvements to services are in most cases nowhere to be seen, although to be fair punctuality has improved. (By British standards, that is; we say that a train is punctual if it’s less than 10 minutes late, whereas in Spain, the land supposedly of ‘manana’, if one of their high-speed services is five minutes late your fare is refunded.).

Rail’s share of “total miles” small?

A recent article in last weekend’s Independent on Sunday (2 Jan 2010) by Alexandra Woodsworth, of the Campaign for Better Transport, says that even steeper rises are planned from January 2012, as the government wants to reduce the taxpayer’s contribution to the cost of running our much-criticised rail network. In itself a justifiable aim, if you consider it unfair to subsidise so heavily a mode of transport that represents 8% of the total distance travelled in Britain, (The Economist, 1 Jan 2010) compared with “85% by cars and vans”. That last phrase makes me wonder whether the statistic included freight miles; time to call in Tim Harford and his team at Radio 4’s wonderful “More or Less” programme with their genius for unpicking the headline statistics so beloved of many journalists and so often misleadingly used. It was Gore Vidal who said, “The worst thing I can say about my fellow-Americans is that they don’t like any question that can’t be answered in ten seconds” and sometimes I think we are going the same way.

Captive market

The Economist article points out that UK rail fares have grown by 50% in real terms since 1980 and it’s already well-known that our fares are the highest in Europe by a massive margin. Despite that, many commuters have no real alternative and “many rail firms enjoy a virtually captive market, (and regional monopolies too) hence passenger numbers continue to increase: we complain but many of us cannot vote with our feet because we need the trains to get to our jobs. The claim is often made that trains are “favoured by the better-off” but this is somewhat misleading: trains are not so much the favoured solution as a necessity for those who work in London, where wages and salaries are higher but so are living costs.

Subsidies and profits

The same magazine has often made the claim that the taxpayer subsidy of rail (currently £4.4 bn / annum) is four times higher than it was before we privatised the network in the mid-1990s (a decision taken by the then Tory government but implemented by Labour) but it’s not clear if that’s inflation-adjusted. Either way, can this massive subsidy be justified in view of rail’s small share of the travel market? And can it be consistent with the highest fares in Europe? (and in many people’s opinion the worst services?)

In a recent post I quoted a letter scoffing at a claim by a senior manager in the train operating companies (TOCs) that there would be fares “to suit everyone’s pockets”. The writer guessed whose pockets would be best suited by the new fares and it would not be the traveller. These new fares will be better news for the taxpayer and best of all for the TOCs themselves. The partial justification of the increases is planned improvements to the services provided by these privately owned train operators; that’s equivalent to Tesco, for example saying: “we want to open new stores next year, which will of course increase our market share, our turnover and our profits; that’s a good economic decision for us but to pay for it we need you, the consumer, to make the investment, so we will increase all our prices now.”

Off-peak more expensive?

“And another thing …” Why are our rail fares so complicated? Last week I travelled from Bristol to Exeter. Even though I knew exactly which train I wanted to get, there were seven different single fares available, just for that particular train, according to www.thetrainline.com, all with slightly different conditions attached. If I had not been sure which train to take, there would have been dozens of different fares.

Of course advance booking is usually cheaper than walk-up and off-peak is cheaper than peak, i.e. “anytime”. However, here’s the most ludicrous thing I noticed last week: the walk-up fare for an “off-peak single” on my train was slightly more expensive than the equivalent fare for an “anytime single.” As Jeremy Clarkson might say, if he’d ever written about trains (which I doubt), “you couldn’t make it up.”

WANT TO KNOW MORE?

“What’s green about encouraging us to drive?” The Independent on Sunday, 2 January 2011. http://www.independent.co.uk/opinion/commentators/alexandra-woodsworth-whats-green-about-encouraging-us-to-drive-2173948.html

Alexandra Woodsworth, The Campaign for Better Transport. http://www.bettertransport.org.uk/

“After the deluge, the pinch: Britain’s expensive trains are set to get even pricier.” The Economist, 1 January 2011. http://www.economist.com/node/17800351?story_id=17800351&CFID=158635719&CFTOKEN=67846156

“ … Britain’s definition of punctual includes trains up to ten minutes late”. From The Economist 4 June 2009: “Pay up, pay up, and board the train.” http://www.economist.com/node/13788573

POSITIVE ATTITUDE AND DEBT: LESSONS FROM NAPOLEON HILL

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I recently had a couple of e-mails from someone with debt problems who had come across my book “Back to the Black: how to become debt-free and stay that way” and I was impressed with the positive attitude shown. That reminded me of the importance of mental attitude when one is trying to find a way out of debt. It also reminded me of a story that was told many years ago by Napoleon Hill.

 

Hill was an early writer on the habits and characteristics of successful people. In one of his books he wrote: “In my youth, when I worked as a bank clerk, (this was in the 1920s) I could tell, before a man was 10 feet inside the bank door, whether he expected to get his cheque cashed.”

 

Debt and stress

 

Being in serious debt is stressful: that’s obvious to pretty well anyone who has been in that situation. How we react to that stress greatly influences our success or otherwise in getting out of debt and the best way to manage stress is to use our knowledge of how our minds and brains work.

 

My reading of Hill’s anecdote was this: less-confident customers possibly had their accounts scrutinised more closely before being given any cash. If I’m right about that, then it follows that being confident – or at least acting confidently no matter what one feels inside – might have helped some of his customers to get cash; in some cases that will have meant they got credit if their accounts were not “in the black”.

My belief is that the same principle applies to getting out of debt as was applied to getting credit in Napoleon Hill’s day (nowadays, of course, the branch manager simply says: “sorry, the computer won’t let me do it.”). Let’s call it the power of positive expectations.

 

Negotiate with positive expectations

 

In this connection, the power of positive expectations says that while you are negotiating with your creditors, if you demonstrate that you expect to be debt-free in a given time, and that you’ll do whatever it takes to get there, and if you are persistent in acting that way, eventually you’ll find people who will help you. They may be employees or managers in the very companies to whom you owe money; they are just people doing a job, after all. If you have a positive attitude, it can attract people who can help you; maybe by giving you more time, or by going to the limit of their authority in some other way.

 

To quote another famous figure from that far-off era, Henry Ford: “If you think you can, or you think you can’t, then you’re right.” Based on my own experience, that applies to getting out of debt too.

 

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Want to know more? “Back to the Black: how to become debt-free and stay that way”, is now available as a multi-format eBook at Smashwords. You can sample it free (view or download the first 20%), or buy the whole book at only $3.99.

Go to: http://www.smashwords.com/books/view/22886

 

Book website: www.back-to-the-black.com

 

 

Speaking

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I’m a speaker with 35 years’ experience and I’m also a confidence coach for speakers, musicians and actors. I’m also a professional voice actor and a presenter on community radio.

During those 35 years I’ve spoken at dozens of business conferences and corporate events of all kinds during a long career and I’ve run my own training company.

‘Back in the day’, I was the founder of a conference and exhibition at the Renaissance Hotel, Heathrow, which used to attract up to 400 delegates annually. I was the host and keynote speaker at that conference every year from 1979 to 1990.

In the last few years I’ve spoken at dozens of venues in the West of England, where I live nowadays.

For how long do you speak?

“If you want me to speak for twenty minutes, I need two weeks’ notice. But if you want me to speak for two hours, I can begin now.” (Winston Churchill)

As long (or short) as you like, is the answer.

What topics do you cover?

I cover a wide range of subjects and am adding to the list all the time.

  • “Confidence in action”: how do high-profile musicians, actors and speakers prepare themselves for their performance?
  • “Age cannot wither, nor custom stale …”: inspirational stories of ‘oldies’ who defy ageism and stereotyping.
  •  “The self-publishing revolution”: how you too can become a published author of both e-books and paperbacks.
  • “Thrift is fashionable now”: a finance coach’s approach to making budgeting fun.
  • “When I’m sixty-four”: planning for and adjusting to retirement. Or, as I prefer to call it, reinvention.
  • “Brunel’s legacy”: triumphs and tragedies of public transport in the twenty-first century.

I am also happy to speak to your brief, if given adequate time to research the topic. (Preferably two weeks, as Churchill suggested.)

 

How can we book you?

I am available for public speaking engagements; I also coach speakers, musicians and actors. Please do get in contact so we can discuss your needs.

 

Testimonials for Michael’s Speaking

 

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Hello and Welcome…

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Michael MacMahon

I’m Michael MacMahon, author of Back to the Black: how to become debt-free and stay that way, public speaker and voice actor. As a septuagenarian with no interest in retiring, I’m turning a lifetime of skills into an invigorating portfolio career. I write about my life and work here. Make yourself at home, have a look around and find out more. Continue reading →