Archive for May 2005

The O-Fish-All Word on Aquarium

When you go on vacation, try to find a trustworthy person to
feed the fish in your aquarium while you’re away. A relative or mature
neighborhood kid is usually a good choice. To make sure that they feed your
fish properly, place individual servings in plastic bags so that your
substitute know exactly what to put into each tank. They may sound like a
hassle, but it’s better than returning home to find your prize goldfish has
become the size of a basketball and is stuck on top of a mountain of uneaten

Another option is to purchase an automatic feeder from your
local fish shop. These units automatically dispense a certain amount of food
daily. Never add a bunch of extra food to the tank before going on vacation.
Your fish won’t eat the extra food before it starts rotting, and by the time
you get home, you may have a serious — and stinky — water problem.

Aquariums For Dummies, by
Maddy Hargrove and Mic Hargrove, will help you get along swimmingly with your
aquatic interests.

May 2005
Fidelity Investments

Suze Orman:

What to Do If

You’re Young,

Fabulous, &


By Len Abram

Are you young, fabulous, and broke? According

to personal finance expert Suze Orman, if you’re

in your 20s or 30s with a student loans and

credit-card debt, you just might be. And she understands.

She was a college-educated $5,000-a-year

waitress before becoming an Emmy-winning

TV commentator and author of four bestsellers.

Here are tips from her latest title, The Money

Book for the Young, Fabulous & Broke.

Q: When you graduated college, you had your

own problems with debt and finances. Is the young,

fabulous, and broke, or as you say, YF&B,

generation, similar to Suze Orman of an earlier time?

Orman: Today’s young people have it tougher.

I get e-mails everyday from their parents, saying,

‘Suze, my kids watch your show. They will not

listen to us. Tell them how we had to plan and

sacrifice to get ahead at their age, just like you.

They can do it, too.’ Yes, they can. However,

times have changed, and what worked for

their parents may not work for them. That’s

why I wrote The Money Book for the Young,

Fabulous & Broke.

I graduated with credit-card debt, a low-paying

job, and a modest place to live. But, unlike

many YF&Bers, I never had crushing student

loan debt, sometimes $80,000 or more.

(I bought my first home for less.) Health care

and energy costs are several hundred percent

higher than when I graduated, and very few

jobs were being outsourced overseas.

Entry-level jobs don’t pay much more

than when I finished school.

Add to these, the threat of terrorism,

problems with Social Security and pension funding,

and you realize that this generation is

facing challenges unlike those of their parents.   

Q: Your main message is about

managing debt. What is FICO? How does it

determine our financial plans and dreams?

Orman: Your FICO score — and every one of

us has one — is the most important three-

digit number in your life. It’s a numeric score —

between 300 and 850, with 850 being the best —

that summarizes the information on your

credit report. Lenders look at the rating

to get a quick sense of how creditworthy

you are. It determines the interest rates you

will pay on car loans, credit cards, and

mortgages. FICO, named after the Fair Isaac

Company, also has a derivative known as an

insurance score, which establishes what you pay for premiums.

Do you know that many landlords check your

FICO score before renting an apartment?

And that employers are starting to check

your FICO score before they hire you?

By the way, when you get married,

your mortgage interest rate will be

based on the person with the lower FICO score.

If you don’t have a FICO score in the highest

range of 760 to 850 you are committing financial

suicide — especially in today’s real estate market.

Your monthly payment on a 30-year mortgage

for $300,000 will cost $700 more per month

if you have a FICO score in the low 500 range,

versus 760 or above. 

Q: How can a young person in debt get

control over his or her financial life and

improve their FICO score? How frugally

do YF&Bers have to live?

Orman: I don’t like the term the ‘latte factor,’

a concept that I actually introduced about

ten years ago. Rather than buying one latte

a day for $4 a day, you invest that money

instead and over 40 years could have a

million dollars. What is realistic is to offer the

tools to make more out of less, to make

money go further. If YF&Bers are late one day

in paying a credit card, that impacts their

FICO score meaning they may end up

paying 18%-23% interest, with no reduction

because their FICO score is so low. They can’t

even qualify for a 0% interest rate on a

credit-card promotion so they can

transfer their 18% balance.

Q: You suggest easier ways of saving money.

You call it ‘digging for dollars.’ 

Orman: Digging for dollars means how you

make more out of less money. Thousands

of interviews with YF&Bers taught me

that they are wasting money that would

be better put into reducing debt.

For instance, most of these kids are

getting a tax refund. Because they feel

incompetent about saving money, they’d much

rather have their employers save it for

them. The majority get a yearly tax refund of

around $3,000. At the same time, they have

$3,000 to $8,000 of credit card debt,

a low FICO score, and, therefore, an interest rate of 18%.

How much interest are they making

on their tax refund? None. If they increase

their exemptions to get more money

back every month — if they could get an

extra $250 — they might pay off their credit

cards and be out of debt in a year.

Q: You make a point that in marriage

‘I do’ often means ‘we pay.’ Does a

young couple require financial,

along with emotional, compatibility,

for a marriage to last? 

Orman: Absolutely. Closer to 40% of

marriages end up in divorce. The number-one

reason for divorce is arguments over money.

So while it’s wonderful to have romance and

intimacy with your potential lifelong partner,

the truth is that marriage is a financial and

legal obligation you take on, whether the

marriage works or not.

Will you split the house expenses 50/50,

even if one partner makes more? How much

debt does your partner have? How will you

handle supporting children from previous

marriages — or children from this marriage?

These are important questions that need

answers before the couple says ‘I do.’

It’s the difference between ‘Til death do you

part’ and ‘Til debt do you part.’ 

Q: What kind of mutual fund or asset

allocation do you suggest for a young person,

perhaps in his or her mid-twenties,

for a comfortable retirement? 

Orman: I advocate exchange-traded funds (ETFs).

In my book, I actually give an asset

allocation model — but only after debt is

reduced or paid off — and foreign markets

should be as much as 20% of your portfolio.

Q: You also favor Roth IRAs for young investors.

Orman: After matching whatever an employer

contributes to a 401(k), the YF&Ber (assuming

they have no high interest debt) should

start a Roth IRA. Once they’ve reached

the company’s maximum match,

usually 6% of base pay, then anything after

that should go into a Roth IRA. The money is

after tax, but withdrawals are tax free,

unlike those of a 401(k), which are taxed at

your income tax rate when the money is

withdrawn. Of course, you must meet the

eligibility requirements of a Roth IRA. Also,

early withdrawals of earnings may be subject

to taxes and penalties.

Q: You imply problems with money

are not always about money, but about

self-esteem. You tell your readers and

viewers that they should feel good about

themselves. How can this help them out of debt?

Orman: Why do you get into debt to begin

with? You usually spend more when you feel

bad or want to impress others, which is another

way of feeling good about yourself. People

spend money that they don’t have to

impress people that they don’t even

know or like. They think that the things

around them will define who they are.

Buying things you don’t need or cannot

afford puts you into debt. Eventually

that makes you feel even worse.

Q: So what moral compass does a YF&Ber use?

Orman: You can’t define yourself by your

things any more than by your job title and

money. I always say, ‘People first, then

money, then things. People first means you —

when you understand who you are —

you then understand what you really need,

not think that you need. When you only spend

money on needs, you tend not to get into debt. 

Q: You differentiate between good and bad debt:

How does a young person know one from the other?

Orman: Frankly, one of my other books

popularized the idea of good and bad debt,

that good debt is student loan debt or

mortgage debt, while bad debt is nearly

all credit card debt. Those terms are now

obsolete. Mortgage debt, especially when

it’s an interest-only loan, can be very bad debt.

Credit card debt at a 0% interest rate can be

very good debt. It’s the use that counts,

its purpose. Borrowing to lease a car is

bad debt; financing a used car — and keeping

it five years after paying it off — is very good debt.

Q: What’s the number-one positive reason

for going into debt?

Orman: Number one, even before a retirement

plan, is to save for a down payment and finance

a home. A home will provide not only a place

to live, but also great tax write-offs. Mortgage

interest is tax deductible, as well as property

tax. Live in the home two years and the first

$250,000 from the sale of a primary residency

is tax-free; $500,000 if you own it with someone else.

Q: From modest beginnings, you overcame

debt and adversity and reached great success.

What kind of a future does the YF&Ber face?

Orman: With effort and grace, I think anything

and everything is possible. I understand that

what’s happened to my life is quite extraordinary.

You may not go from waitress to best-selling

author. You can, however, have a home of

your own. You can have a comfortable

retirement. You won’t wake up at three

in the morning, wondering how to pay

your bills. You’ll always be fabulous, but

you do not have to be broke.

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When Young Managers Interview Their Elders

Page 1 of 1

by Erin White

Normally when a seasoned executive meets with an associate young enough to be his child, the older person has the upper hand. It is natural for the older executive to assume an authoritative tone, evaluating and instructing the younger one. But what happens when the older person is interviewed for a job by someone a quarter-century his junior?

Call it the May-December interview. It is happening as older executives change jobs more frequently, and baby boomers swell the ranks of senior job-seekers, recruiters say. The age gap brings additional tension to a job interview, an experience already fraught with plenty of anxiety.

Among the difficult balancing acts for the candidate: You want to come across as confident and experienced, but without seeming like a know-it-all who can’t be managed. Your long work history should be an asset, but can become a liability if you dwell on early experiences so much that you seem ancient.

Etiquette Deprived

On top of that, these younger interviewers — many of whom have achieved wealth and status at an early age — sometimes lack their elders’ polished manners and treat candidates rudely, recruiters say.

Hal Reiter, chairman and chief executive of New York executive-search firm Herbert Mines Associates, cautions older job candidates not to expect the royal treatment from a much-younger interviewer. When you arrive for the interview, don’t expect to be greeted on time, Mr. Reiter counsels. He recalls one candidate who waited an hour and a half to be seen. Finally, the interviewer’s secretary came out. Her boss was on the phone and wasn’t likely to get off soon. The candidate left, saying if the man needed to see him, they could schedule another meeting.

Once you actually have an interview, your young questioner may be ill-prepared. Perhaps he won’t even have read your résumé, Mr. Reiter cautions. Don’t be surprised if he hasn’t heard of a company that would be well-known to someone older. Mr. Reiter recalls one candidate whose interviewer repeatedly misstated the name of the candidate’s previous employer. The candidate kept correcting him, saying, " ‘I didn’t work for X, I worked for Y,’ " Mr. Reiter says. "Finally the interviewer heard what he was saying."

No matter how lousy your interviewer’s manners, stay calm and professional. Often younger interviewers aren’t the ultimate decision-makers; you may eventually interview with their older boss. But the younger people are gatekeepers and have a say in the hiring process, so you can’t ignore them. "Understand these people have the keys to the kingdom," Mr. Reiter says. "The candidates just need to suck it up and wait till the head guy."

Addressing Insecurity

You also need to pay attention to younger managers’ insecurities. Trudi Schutz, a career coach in Bethel, Conn., says you should assure your would-be boss that you’re not a threat to his job. A young manager may fear that such a talented, experienced executive couldn’t possibly be satisfied with the duties of this particular job. What you are really after, the manager worries, is his own job. So address that concern directly.

Ms. Schutz did it herself when she was interviewed by someone about 15 years her junior. He ran a division at a big communications firm; Ms. Schutz would have managed a group in the division. Soon after the interview began, she said: "I’m coming here to help and do my job as well as I can, but I’m not gunning for your job," she recalls.

The interviewer hadn’t mentioned that he felt threatened, but Ms. Schutz sensed he needed to be reassured because he was younger and lacked Ms. Schutz’s expertise in some areas. "He needed somebody like me, so I tried to sell my qualifications in a way that he could see the benefits I would have to him and at the same time say, this particular job" — and no other — "is why I’m here." After she brought it up, "he looked a lot more comfortable," she says. Ms. Schutz was offered the job.

Steve Dempsey, vice president, recruitment, for Corporate Project Resources Inc., a marketing staffing firm based in Chicago, says older executives also need to show they are willing to be managed. They need to counter the fear that seasoned executives may be stubborn and refuse to submit to a boss’s preferences. He suggests talking about how you’ve worked with past managers, emphasizing your flexibility.

Heather Shively Goldman, a partner at executive-search firm Rhodes Associates, says one mistake older candidates often make is explaining their work history from the beginning. With such a long résumé, a chronological explanation makes you seem old and doesn’t give you enough time to talk about more recent, relevant accomplishments. When your interviewer asks you to tell him about yourself, "stick to the highlights," she says.

Don’t worry it, here’s why

Author: AIF
Date: May 24, 2005 11:42 PM EST

It is one recruiter. There are several more that probably have the same job. I’m in HR. Companies usually give the same job order to 3 firms. They don’t trust just one firm to deliver results.

My experience as a candidate with headhunters has overall been unimpressive. There are a few good ones, but most will waste your time and pump up jobs to try to get you interested and you waste a vacation day to find out the job is nothing like what they described. One of the more reputable HR search firms regularly changes job titles on their emailed list from HR Manager (of which I would have no interest) to HR Director. When you get the job spec it says HRM, not HRD. At least they are honest when you discuss the particular opening, but it is a bait and switch approach. And that is one of the better firms….

Most will tell you the exact same thing: Best boss I’ve ever met that’d you be reporting to, they are looking for the boss’ replacement in 18 months, and the company is great and wanted to make a decision yesterday (and then you spend 4 steps and 4 vacation days to get an offer lower than the headhunter claimed the range was).

Good news, the economy is getting hot. Be selective. Interview search firms as much as they (and companies) interview you!

Can Your Dog Get Mad Cow Disease from his Food?
by: Shirley Greene
Scientists believe our human and dogs?food supply chain is safe from BSE.

Have you been reading the papers, watching the national news or listening to talk radio? If so, chances are you’ve been exposed to the term Mad Cow Disease. Recently, even a case in Goats has been confirmed in France! We know it is possible for a variant of Mad Cow Disease to be passed to humans through meat consumption. What about our pets? Are they also in danger?

First, let’s briefly review some information about Mad Cow Disease.

What Is Mad Cow Disease?

Bovine Spongiform Encephalopathy (BSE), or Mad Cow Disease, is a transmissible, slowly progressive, degenerative disease having an extremely long incubation period. Some experts quote the incubation period may be as long as three to nine years. This means that there is a very long period when an animal is infected but does not appear ill. This is important because animals may be infected and consumed before they become symptomatic.

The disease affects the central nervous system of cattle causing symptoms such as excessive salivation, staggering gait and weight loss. The animal usually dies within six months of becoming symptomatic.

There are limited portions of the steer carcass thought to carry the infection. They are the brain, spinal cord, and other nervous system tissues. Muscle meats, experts state, should be safe for human consumption, even if they are from an infected steer.

While the USDA tells us that muscle tissue is safe, killing methods in slaughterhouses create situations that may lead to contamination of brain and central nervous tissue into other tissues.

The mode of transmission appears to be from infected animals that were processed as cattle feed, then fed to other cattle and then were consumed by people.

Safety Measures Don’t Protect Pet Foods

Since the discovery of infected cows first in Great Britain, then in Canada, and now one (or possibly more) within the U. S., the USDA has announced implementation of some new safeguards. These safeguards fall far short of those called for by consumer groups and scientists. This new rule was very interesting to me, as a pet owner:

“Meat from downer animals will no longer be allowed into our human food supply. These animals are called 4D for dead, dying, diseased and disabled.”
However, 4D animals can still be used in commercial pet foods and feed for poultry and swine.

Restrictions have also been placed on slaughter and processing methods to “increase the likelihood” tissue from the nervous system of the cow does not end up in meat products. Is that good enough.

Can Your Dog Get Infected from Eating Kibble, Hooves or Rawhide?

In a word, the general consensus of the international scientific community is a resounding “NO.” For reasons unknown, dogs appear to be immune. Cats, however, are not so lucky.

Many animal experts recommend that any dog food containing beef or beef byproducts be kept away from felines, even though there is no reason to believe that BSE is present in American dog foods.

The FDA states: “There is no evidence to date that dogs can contract BSE or any similar disease and there is further no evidence that dogs can transmit the disease to humans. With the exception of cats, no pets are known to be able to contract Mad Cow Disease.”

Final Thoughts From the Author

I don’t have many answers. The more I read, research, e-mail, and phone various experts, the more I find myself concentrating on the “loophole” words and phrases, such as: highly unlikely, perhaps, maybe, possible, probable, documented, nearly, estimated and my favorite – “appears but not scientifically proven, so we’ll just say undocumented.”

Overwhelmingly, scientists believe our human and dogs’ food supply chain is safe from BSE, well, except in very rare instances. And, in those cases, it is the humans, not our dogs, who are not guaranteed 100 percent safety.

What would I do? I would follow the advise of Ben Jones, President of the Association of American Feed Control Officials (AAFCO), who recommends that meat and bone meal should be avoided altogether in any dog food products where there is the possibility of access by cats or kids.

If I owned a kitty, or had children, I’d make certain there was no pet food containing beef or beef byproducts or beef meal in my home. If I had venison or elk meat in my freezer, I’d call my local Department of Public Health and ask how to safely and permanently dispose of it.

Each of us must make informed decisions for the well being of our families and our pets. More is unknown than is certain. Knowledge is power; so update yours often.

For more information, see the complete article Food For Thought: Mad Cow and Wasting Disease.

Fidelity Investments

How to Dig Out of Debt

By Neil Rhein

Would you pay $1,500 for a high-definition TV that’s on sale for $1,000? That’s exactly what you may be doing when you charge purchases with a credit card and take months or even years to pay off your balance in full.

While borrowing money to pay for your college education or a home usually pays off in the form of a higher income or a valuable real estate asset, credit card debt rarely pays such dividends. In fact, for some consumers the temptation to buy whatever they want whenever they want can lead to financial disaster. Here are some pointers on managing your credit card debt.

The average card balance rose 14.5% last year to $2,627, according to And Americans are now carrying more credit cards than ever, with an average of 2.9 credit cards per consumer.

"When people are pulling out the plastic to make everyday purchases such as hamburgers and groceries, it’s no surprise that the average amount of debt has gone up," says Jim Tehan, a spokesperson for

Over the past few years, millions of Americans have refinanced their mortgages, often repeatedly, to take advantage of falling interest rates and to lower their monthly mortgage payments. Yet at the same time, millions are still carrying credit card balances with annual percentage rates (APR) of 18% and higher.

When you don’t pay off your credit card balances in full at the end of each month, you’re robbing your ability to save and invest for your future. In a recent report on the credit card industry for PBS, Elizabeth Warren, the Leo Gotlieb Professor of Law at Harvard Law School, argued that credit card debt makes it difficult for anyone to build a solid financial foundation.

"When someone is carrying credit card debt, it means they are falling behind instead of getting ahead," says Warren. "When people ask how much credit card debt is OK, it’s a little like asking how much dynamite can you keep in the basement. You probably could keep some and get along OK. But the smartest move is not to keep any."

Warning Signs
There is a severe lack of understanding about debt and personal finances today, according to New York Law School Professor Karen Gross, who also serves as president of the Coalition for Consumer Bankruptcy Debtor Education. "We have equal opportunity ignorance — it cuts across all levels of society," she says.

For a quick assessment of your situation, ask yourself these questions:

  • Am I making only the minimum payments on my credit cards?
  • Do I live from paycheck to paycheck with no savings?
  • Do I sometimes skip payments on one credit card in order to pay off others?
  • Have I reached the credit limit on one or more credit cards?

If you answered yes to any of these questions, you may need to take action to get back on track.

Stepping in the Right Direction
"It’s essential to pause, take a deep breath, and look carefully at possible solutions," explains Gross. "The last thing you want to do is to try to relieve your financial headache with a solution that will be worse than the hangover itself." Like a New Year’s diet resolution, quick fixes rarely work. What does work, according to Gross, is a simple four-step formula for financial H.E.L.P.:

  • Hold your horses, stay calm, and don’t rush into any impulsive arrangements. "Don’t panic," advises Gross.
  • Examine your situation. While your debt problems may be serious and appear urgent, first get an accurate sense of the extent of your problem. "Lots of organizations offer help, but don’t take the first solution that comes along. Take time to assess, compare, and contrast multiple solutions," she says.
  • List your options and the pros and cons of each. For example, while a home equity loan may seem like an appropriate solution, it’s not always the best course of action because it can put your home at risk.
  • Pay at least the minimum amounts due on all of your credit cards. This last step is critical due to a new clause that has worked its way into the fine print of many credit card agreements. It’s called the "universal default" clause and it permits a credit card company to raise your interest rate if you’re late on another company’s credit card or any other outstanding loan. Banks argue that it’s logical to raise rates for a consumer who has shown evidence of becoming a higher risk.

Don’t Make Matters Worse
Virtually every American with a functioning mailbox has received an offer to consolidate his or her debt onto a new credit card with a low introductory interest rate. While switching to a card with a lower interest rate makes sense in many cases, consolidating your loans onto a single card can adversely affect your credit score.

Credit service agencies such as Experian and Transamerica use your credit score to assess the risk of loaning you money. The lower your score, the higher your interest rate. One factor that they consider is your credit utilization rate. According to Gross, you should avoid using more than 30% of the available credit line on a single card, because doing so can lower your credit score. When you consolidate all your debts onto a single card, it’s likely that you’ll exceed a 30% utilization rate.

As a last resort, some consumers turn to one of the many organizations offering help to the overextended. But be careful who you look to for help, warns Gross. "Different debt relief options have varying degrees of legitimacy," she says. "Learn the differences between these approaches and whether the people helping you are reputable."

Many credit-counseling organizations are organized as nonprofits, which helps create an image of altruism and benevolence. In practice, however, many of these firms pay their principal officers hefty salaries, and some do more harm than good. According to the Better Business Bureau, complaints against credit-counseling agencies have risen 467% over the past four years.1 "If they promise you the moon, they probably can’t deliver," says Gross.

Action Step: Visit the National Foundation for Credit Counseling to investigate credit-counseling agencies.

One common arrangement that some firms offer is a debt management plan (DMP). These plans allow the credit-counseling agency to intervene with creditors on your behalf. You send a single payment each month to the credit agency; it negotiates with and pays off your creditors, and attempts to obtain lower interest rates on your credit lines and eliminate late fees.

Most DMPs charge a setup fee and a monthly fee in exchange for these services. If you decide to enroll in one of these plans, be sure to ask for a detailed breakout of the fees and confirmation that the firm is licensed to operate in your state. You may also want to confirm that it is a member of the National Foundation for Credit Counseling and see if it is accredited by the Council on Accreditation for Children and Family Services (COA), an international, not-for-profit, independent accrediting body.

Some credit-counseling agencies may also ask for a lien on your house as a condition of the DMP. But it’s a risky proposition. "While turning to home equity can provide temporary relief, eventually the equity will dry up and the debts will need to be paid off. If you find yourself charging everyday purchases and relying on debt to make ends meet, act quickly before the situation gets out of control," says’s Tehan. Most lenders are willing to work out a payment plan, so using your home as collateral should only be a last resort.

1 Source: CBS MarketWatch, Feb. 1, 2005, Discrediting Credit Counseling

Here is your Pets eTip

Coaxing Kitty through Airport Security

The most frightening moment of any trip for most kitten owners traveling by air is walking through the security X-ray checkpoint. Officers will instruct you to remove the kitten from the carrier, place the carrier on the conveyor belt, and carry your kitten through the human X-ray scanner. Never place your kitten in the carrier to send through the X-ray conveyer.

While you try to walk through those X-ray arches and return your kitten to his carrier, alarms are blaring, people are dropping change and keys into metal bowls, and any number of other unfamiliar noises, sights, and motions are scaring the fur off of your kitty. He will struggle. Make sure you have a harness on him. Security may not be too helpful. They may even watch nonchalantly as your kitten scratches three layers of flesh from your chest while you try to fit a spread-eagle four-legged acrobat into a carrier opening. If you’re traveling with a companion, have him go through the checkpoint first so he can hold the carrier door open for you.

Kittens For Dummies, by Dusty Rainbolt, can help you make wise decisions about your kitty’s care and feeding.

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