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Does your Credit Card provide Sufficient Damage Coverage for a Rental Car?

By Bob Brooks

June 24, 2015

When you go to rent a car, one of the biggest “upsells” when you go to the counter is liability insurance coverage.  What if you have a wreck in the rental?  Do you want your insurance coverage covering it or the rental company?  It does make you think.  Then you remember that your credit card might provide coverage as long as you use it.  Then they quickly put a question in your mind making you wonder if that is a good idea.

Well wonder no more!  Cardhub.com has just released their 2015 Credit Card Rental Car Insurance Study, which compares these the insurance coverage of the major credit cards.  So before you go on that trip, make sure you understand the coverage on your card.  Here are some of the key findings:

Key Findings

    • American Express and Visa have the best rental car insurance policy, followed closely by Discover.
       
    • All four major networks require cardholders to charge their entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers offered by their rental company in order to be eligible for coverage.
       
    • American Express is the only network that does not provide coverage for renting certain popular SUVs – including the Suburban and Tahoe from Chevrolet, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco.
       
  • VISA and MasterCard only cover accidents on dirt and gravel roads if they are “regularly maintained.”

It always comes down to the fine print.  For more detailed information go to the 2015 Credit Card Rental Car Insurance Study

 
Does this NBA Super Star have any responsibility for his 20 Million Dollar Loss?

By Bob Brooks

June 22, 2015

 

NBA All Star Tim Duncan is suing his former financial advisor for 1 million dollars because allegedly his advisor lost 20 million dollars through actual loss and maybe some fraud. Reportedly Tim Duncan invested into some businesses that the advisor was involved with and also reportedly the advisor withheld interest payments that were due the NBA All Star.  It was also reported that the financial advisor forged Tim Duncan’s name on documents.   The losses occurred over a span of 8 years between 2003 and 2015.  

Obviously, if the details reported are true, the blame falls squarely on the advisor.  However, does Tim Duncan have some responsibility in this situation?

 

I would suggest that he does have some responsibility.  He commits a mistake that so many investors commit. Whether you have Tim Duncan money or you have a small portfolio, this is one of the most common investment success killers – not paying attention. 

It is our responsibility to pay attention and monitor rather than just pretend (hope) everything is OK.  Considering that 20 million dollars vanished over a period of 8 years, he clearly handed over complete trust to the advisor.  Unfortunately, by the sound of the allegations, he was plain taken to the bank!

 

Athletes are no different than anyone else.  It is the human condition to want to trust and delegate the things that cause us the most stress or hassle.  Money definitely falls into that category.  To complicate it even more, people either have an orientation towards the math of money or they don’t.  If you don’t understand how numbers work, it makes it that much tougher. 

So, what if you are one of those who doesn’t pay attention?

 

Well, if you are not numbers oriented, team up with a friend or family member who is and get them to help you with the evaluation.  Be careful – Pick someone that can be open-minded and not someone full of bias.

If you are avoiding your investments for whatever reason, accept where you are. Understand it is your reality, and develop a game plan from where you are and not from where you regret that you aren’t!

 

Fortunately, Tim Duncan has made well over 200 million dollars playing basketball.  According to him, the loss doesn’t affect his lifestyle.  I think that misses the point.  It isn’t about lifestyle.  Paying attention and practicing accountability is about prudent stewardship. 

The bigger question lies with the lawsuit itself.  If someone takes 20 million from you, why only sue for 1 million? 

 

Bob Brooks hosts the Prudent Money Radio Show heard weekdays Monday through Friday on 91.3, 97.5, and 99.9 in the Dallas Fort Worth Area. You can reach Bob at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
Tony Joe Needs Your Help!

If you listen to the radio show, you know Tony Joe.  Tony Joe is on my show every Friday as we change the pace a bit with the special car corner edition of Prudent Money.  Tony Joe started this segment with Don Spears roughly 10 years before I took over the show in 2002.  He volunteers his time to come to the studio to help people with their car related questions.  He has helped countless people through all of the years and been such a blessing which brings me to my request.

Tony Joe probably will not be happy about me asking for help.  Tony Joe is such a giver and a man who goes out of his way to help others.  He would never ask for help in return.  As you may or may not know, Tony Joe has an automotive repair shop called Expertech Automotive.  Over the past 6 months both of his main mechanics who have been with him for decades have both succumb to career ending illnesses.  It is a very unusual and sad occurrence. 

If you run a business, you can only imagine how difficult it is to lose the majority of your workers and still keep everything going.  It is difficult to stop and go through the interview process because he is doing the work of 3 guys.

Now for the request (after such a long introduction)  If you are a mechanic and are unhappily employed or maybe looking for work and would be interested in working for a great guy, send me an email with your information and a little about your background to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  Please include your number in the email.  If you don’t have a resume, don’t worry about it. 

If you know of someone who fits the description above, please forward this to them.  I appreciate you allowing me to take this space and ask for a little help.  Tony Joe is a special guy and I just wanted to do something for him to help him out.  We all know me going to the garage and fixing cars is not the answer :)

Keep the Faith

Bob

 

 
The Biggest Mistake Made Leasing An Apartment

 

June 17, 2015

Dear Bob,

Three months ago I moved out of an apartment.  I went through the process of cleaning the apartment and making sure everything was in its right place.  Yesterday, I received a collection letter stating that I owe the apartment complex for damages.  How could that be?  What steps do I take?

Through almost 14 years of hosting a radio show, I can’t tell you how many times I have received that email.  You pay your rent on time.  You make sure that everything is put back like it was before you moved in.  Then you get the collection letter.

As in any business, there are people who are excellent at their jobs in the apartment management business and in that case everything works out perfectly.  There are also people who are just not very good at their job.  Thus mistakes could be made and your apartment was mixed up with the individual who did not leave their apartment in perfect condition.  Then there are the unethical businesses that wrongly accuse in order to profit.

Unless you plan on spending a great deal of money filing a lawsuit, the listener above does not have really any recourse and here is why.

1)      The evidence is gone – That apartment has been leased out and there is nothing to prove that you did or not fulfill your obligation

2)      It is your word against their word – That is a no win situation. 

3)      A Debt Collector is involved – The debt collector doesn’t care whether or not you owe the money.  Their job is to collect. 

So what is the answer?  Simply put, get closure and agreement that you fulfilled your obligation before turning in the keys.  Draw up a letter that states the unit has been inspected and that the leasing company releases you of any liability and that you have fulfilled your duties per the contract.  I would even have someone there to witness it. 

I would even take a step further and document the condition of the apartment through photos and video.

Extreme?  Maybe so – however, you don’t want to find yourself in the listener’s situation as described above.  Besides the fact that a debt in collection lowers credit scores, a debt that is ignored or is not paid could end up in a court of law.  There are many cases where consumers were taken to court and had a judgment awarded against them for debts that they didn’t owe.

With any consumer contract, getting agreement on closure is always the best strategy. 

Bob Brooks hosts the Prudent Money Radio Show heard weekdays Monday through Friday on 91.3, 97.5, and 99.9 in the Dallas Fort Worth Area. You can reach Bob at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
10 Reasons Why the Financial Services Industry Doesn't Believe in Plan B

By Bob Brooks

June 15, 2015

If you listen to the show or read my writings, you know I am a big advocate having a dual approach to investing – Plan A and a Plan B.

So, why doesn’t the financial services business (referred to below as the industry) take the same approach?

They just advocate a Plan A approach which works well when the market is going up but is a disaster when the market is going down.  Here are 10 reasons- (none of which are doing you any good.)

1)      Career Risk – The way the industry is set up, advisors are discouraged from making decisions on risk.  Most advisors can keep their jobs in a declining market if everyone else is losing money at the same time.  Making a decision to change strategies and being wrong is career risk that most aren’t willing to take.  Said another way, making decisions to do something that everyone is not doing and being wrong, can be career suicide. 

2)      Too complicated, stick to the script – The industry can justify recommending that everyone stay invested in a declining market for one main reason.  They teach advisors that the market almost always goes up over time and can show you the chart to prove it.  It is a powerful script and implies to any investor that doing anything else but sticking with plan A is a mistake

3)      The Industry doesn’t want their advisors to do anything but invest – Truth be told most financial services companies don’t want their advisors managing money.  They want them just investing.  Making changes because of risk involves management.  – see reason 1.  Plus, financial services companies want their advisors out getting new clients and new investment dollars rather than spending their time managing money. 

4)      They are not equipped to do so – When I say equipped I don’t mean that they are not smart enough.  There are many sharp advisors working in the markets today.  The industry doesn’t equip advisors with the processes to efficiently and quickly make changes over many accounts at once.

5)      They don’t have the discretion to do so – In order to manage money, an advisor would need to be able to do so at his or her own discretion.  Making changes would require getting the client’s permission.   With hundreds of clients on the books, it would virtually be impossible to do so in a timely manner.

6)      They don’t believe that big declines can happen –The industry looks at the financial crisis plunge between 2007 and 2009 as a once in a generation occurrence that could never happen again.   Most thought the same thing after the -86% loss in the stock market between 1929 and 1932.  A once in a lifetime decline just happened meaning that another large decline has to be decades away. Unfortunately, the stock market started another -60% decline in 1937.

7)      The industry doesn’t support a plan B because of the money – Simply put the mutual fund industry doesn’t get paid if the money is not invested in mutual funds.  Sometimes a Plan B requires you to sell a portion of your investments and go to cash.  Cash pays the company nothing.

8)      A plan B involves alternative mutual funds and strategy – The financial services industry does not train their advisors on the use of alternative investment strategies and they certainly don’t want their advisors learning on their own.  There is too much risk of being wrong.  It is more profitable to keep things simple.

9)      Advisors are taught you can’t time the market – No one can time the market perfectly.  That is true. The industry can show you all of the studies that show how much investors lose when missing the best days of the market.  Of course, they don’t publish the studies which show what happens when you miss the worst days.  Bottom line is that it is not about market timing. It is about managing risk.

10)   There are more good years than bad yearswho needs a plan B? – This has got to be my favorite reason that makes no sense.  They will tell you sitting through a declining market is ok because there are so many more good years than bad years. Although that is true, there is a good reason for it.  The bad years are so bad you need twice as many good years to recover from them.  At one point the financial crisis erased 13 years of stock market gain in a mere 18 months.  Now you see why you need so many more good years? 

Unfortunately, you don’t benefit from the agenda of the industry.  However, you can benefit from gaining an understanding of how the system works and thinking for yourself.  For more information about Plan B investing, feel free to contact me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
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