As promised the new Business Guide on drop shipping is completed and posted on the site.

If you are looking for an online business that has a good chance of success then this free business guide would be well worth reading.

While doing the research for it I even found a niche that excited me and I am soon to launch a new site focused on it. I'll let you know how it goes.

I can't say enough good things about the potentials and opportunities about using drop shipping to start an internet business. You don't have to spend a dime on inventory, the up-front cost to get going is minimal in the grand scheme of things and the chance of success is good.

Even I have been going back again and again to use the links in this free guide.

And Now For The Questions of The Day

Becky Asks…

Q: Hi Mr. Rhode,

I have two sons and a husband in Iraq, boys on 3rd tour and husband on 2nd. When my husband left our first and second mortgage company were contacted regarding the soldiers and sailors act. They told me I have the option to pay when my husband returns from Iraq finally, or continue monthly payments at 6% interest. Anyway, my Mom had died and no burial money so I that's where our money went. As time went on 2nd mortgage called and asked when we would make payment. They wanted me to pay all the back payments "at once" no $142 payments. My 1st mortgage has worked with me since I found out the real story, which is to make the payments "all" at once when Jim returned. What a lesson of a army wife this has been. I am catching up on 1st, but the 2nd refuses any payments. They want the $2300 at once, I can't do that. They have sent back checks. I had sent them 2 at once and 2 more for the end of the month for a total of 4 payments in 1 month. Is what they tell me true, I can send them 5-600 a month to catch up but they won't accept it. I can keep cashier checks and save them till my husband comes home and pay them but that is just silly. The real question is, can they refuse my payments x 3-4 extra a month and demand the whole back balance at once? They got mad when I contacted an attorney. She never got back to me so I got my money back from that. If you can please give me some advice. My house is got some problems with floor joist falling, electric and I am having a hard time with the stress of all this. I appreciate anything you can do. Thanks.

P.S. Please remember I have doubled my 1st house payments and they are working so nicely with me. When I send them payments I have this set up on bank online so it works nicely for both of us. I just don't know why the problem with the 2nd mortgage is.

A: Becky,

The Soldiers and Sailors Relief Act does give you some protections. Myvesta.org has a free publication all about this act and how it can assist your financial situation while a family member is serving. Download the free publication here.

I am so sorry to hear about the loss of your mother and the difficulties you are experiencing.

It does sound like originally there was a bit of a communication gap regarding the mortgage payments.

What the second mortgage company is worried about is accepting partial payments and having that construed as a loan modification. While it might not seem logical, they are obviously following an internal policy regarding partial late payments. At first glance it appears that you could continue to bankroll the funds for the second mortgage until you have enough to pay them back in a lump-sum. When you are close to having this money together you could ask them to make sure they recalculate the amount due at the 6% Soldiers and Sailors Relief Act interest rate, if that is lower than your current rate, and waive fees and penalties under the act as well.

Outside of this you could get more specific advice from a military financial counselor, your husband could ask for legal help from the JAG office or you could hire a better local attorney to negotiate with the lender for you.

Another great military resource is the family service centers. I have seen families, in unusual situations, get connected to short term loans for emergency situations through these centers. Though the family service centers we have donated over five tons of food to military families here in the states to help them through difficult times.

There are so many families, like yours, that have made such tremendous sacrifice for military service that it is so unfortunate that you find yourself in this position. Most people do not understand the financial sacrifice that many, many families silently make when reserve members are called up out of much higher paying civilian jobs. While there are some financial protections while in active military service there certainly are few options to make up the difference between civilian pay and obligations and the reduced pay military members receive.

Steve

Chuck Asks…

Q: Hi Steve,

I think this may be a little different than you are used to getting, but here goes; I make a ton of money and basically have nothing to show for it. My answer to not being an effective "saver" has always been to make more money.

What small tips or tweaks can you give someone like me who seems to have no hope of really handling my finances in a strict manner?

I don't spend too much, but I don't regiment my wife who is a stay at home mom, we have 5 kids, that isn't the "blow cash at the mall" type - she's more like the "there was a sale on kids clothes" type. Without too much explanation, please trust that she knows she over does it sometimes. Quite honestly, I would too if I didn't work so much.

:-) Sorry about rambling; I do that. Any little tips rather than a full plan of attack?

Respectfully,
Chuck

A: Chuck,

Your financial life is like a river flowing through an open dam. There is a heck of a current running downstream but unless we slowly close the gates on the dam we won't be able to create a money lake.

First, one of you to review my money saving tips and links. Before we crack down we should really try to save money needlessly spent in a way that won't change your lifestyle.

Second, I would urge you to follow my easy money saving plan process. I even give you some links to some of the highest paying savings accounts around.

Third, if you feel like you can invest a bit of time to improve your financial life the family should track spending for at least a month so we can see where the money is really going. By gathering good data we can make good informed decisions about where some financial changes can be made. Use the Ultimate Spending Plan from Myvesta.org.

Finally, a good and valid solution for many is to use the service of a professional money manager to help keep their financial lives on track. It is a fact that not everyone is good at everything and it sounds like you and your wife might have your hands full with life. You might want to put your financial life on autopilot and let your professional money manager take care of your bills and get the savings account building up.

I think a couple of my books might resonate with you and your wife and would certainly contain some valuable insights into the probable underlying issues which are driving this consumption furnace. Visit my books page and read The Beach Misses You and The Path to Happiness and Wealth.

Thanks for the letter.

Steve

Doris Asks…

Q: I checked my credit report and found that a collection company put a collection on for Western Union for medical, this is inaccurate, everybody knows Western Union is not a medical facility. I disputed it, can I sue the collection company and credit bureaus for inaccurate information, my score went down, this is a bogus debt, and they said it was verified, how can you verify a medical debt with Western Union, can I sue? what can I do if they will not remove?

A: Doris,

I answered your question on my MoneyHelp radio show. You can listen to the show online but clicking here.

Mary Asks…

Q: Steve,

I think my specific question would be: How can I get a lawyer to reduce his fees when he has stated that he will not, but is requiring me to pay the entire settlement of my case to him for legal fees? My options seem to be to sue him, ask that the settlement be undone, and/or get the lawyer to somehow reduce his fees. What the unknown for me, since I have gone down the path of asking the judge to declare the settlement unenforceable, is what the judge will answer and how to determine the next reasonable step. Is that specific enough for you? Thanks, Mary

A: Dear Mary,

I answered your question on my MoneyHelp radio show. You can listen to the show online but clicking here.

Jean Asks…

Q: A family member is in a difficult situation.

She and her husband are a young couple who have four children under the age of 6 years old. The combined income of both were necessary to pay for their mortgage and bills. Just as they closed on a new home purchased pre-construction last August, she was let go from her job in a day care center, where her children were provided day care in the facility as part of her agreement. That too has ended when it was taken over by new owners.

Her husband has a temporary job that will end this summer too. His permanent jobsite was destroyed by the hurricanes this fall. Since his field is specialized in the sciences, finding a position has been difficult.

Although they are now physically in their new home, the problem will be paying the mortgage and food.

Even if they sold this new home, they would have to spend a great deal more just to find housing that was much smaller to house all six, because real estate in this state has quadrupled in the past year! She would like to purchase an existing building and start her own day care school. She feels this is the only way to provide for her family, since just getting another job would not even cover day care for their three preschoolers! Her husband's income cannot even cover the mortgage at this time, much less for food and health care for all. The likelihood of him getting a better paying job between now and summer is slim to none. He will get a job I'm sure, but they need two incomes to support themselves.

They have worked so hard to achieve this new home and it is heartbreaking to see all these circumstances happen at once. There is no savings, and they have consolidated their expenses as much as possible. Is there any advice you can give her about how to research funding for this business venture?

Jean,

A: Jean,

To finance the new business venture she might turn to the Small Business Administration for financing or consider a microenterprise loan. Here is an example of one such program in Utah.

Both options have pro and cons. Inc magazine had a great article on microenterprise loans that is worth reading and while SBA financing can result in significant funding it is a long, paper intensive and time consuming process.

The SBA does work with many local micro-loan participants and your friend should contact the center(s) in her state from this list for more information.

I am seriously concerned that starting a business at this juncture that has so many new financial obligations may not be the wisest move.

Steve

Eric Writes…

Q: Hi Steve,

Like you, I have filed bankruptcy in the past. I have experienced the nightmare of collector's calls, the sleepless nights and lots of worry and heartache. When I started out as a young adult I had no knowledge of how to manage finances and got myself in a lot of trouble. I was forced to become an expert in the field of debt reporting and collections just to survive. I am now on the road to financial success. I have paid off almost all of my debt, and have been saving money at an amazing rate. If I continue at this rate I will be completely debt free including the house I just bought last year in about eight years.

I would, more than anything else like to help folks who are going through what I went through. Like you, I can identify with the pain people feel as they are going through financial trouble. The pain is much more than financial, but also emotional. I would like to provide compassionate, caring counseling. I would like to become a money coach. There does not seem to be any sort of training for this field, so I wondered if you could give me some advice on how to get in this profession.

Right now I am an Air Traffic Controller at a very busy major airport. I am starting a financial ministry at my church and would like to start part-time helping folks that need counseling. Eventually I would like to work in this field full-time. Any advice you can give me would be much appreciated.

Thank you,
Eric

A: Hi Eric,

Welcome to the club.

There is so much to be learned from the experience you went through. Your unique insight from personal experience is valuable. You have learned what most financial counselors don't realize, that money problems are not about the money.

Money troubles infect every nook and cranny of our lives when we are living through them. The stress has a negative effect on our health and relationships. The lack of sleep and worry impacts our ability to act. The depression that often accompanies financial problems creates a problem with being able to develop a plan and following through with it. The shame of the situation creates loneliness and isolation. And the overall impact of the experience can create negative self-esteem and negative self-worth which can reduce opportunities and possibilities for a financial recovery following the event.

In my experience, money problems are 5% technical and 95% other things. The money part is the easiest to deal with in financial problems because it is what it is. The numbers either add up or they don't.

One of the most valuable lessons to learn is about the seven stages of debt.

Seven Stages of Debt

Denial - "I don't have any money problems but I need help."

Probably the reason I have helped so many financial professionals -- like accountants, financial planners, controllers and bank officers -- is because they recognize when the numbers don't add up and something is wrong. However, in general, most people don't recognize that they have a financial problem, even though they may be worried about making ends meet or have arguments with their spouse over money.

Anger - "I'm a victim. My creditors did this to me."

It is only natural to feel angry about your situation. However, anger is not productive and will not solve your financial problems. As long as you continue to feel you are a victim of your creditors, you will never have the will or strength to take control of your situation and make it go away. Rage, threats and lashing out will not help you, your family or your situation.

Depression - "My situation is hopeless. What am I going to do?"

Once people realize they may have a financial crisis they begin to panic and get depressed, because the situation often looks hopeless. Rather than withdraw and do nothing to resolve your problem, ask for help. Trying to solve your own financial problem is like being called to the White House with 12 hours notice to prepare a lavish dinner. If you don't have the experience or training, what do you think the result will be?

Bargaining - "Give me a debt consolidation loan and I'll never get in trouble again."

This is the stage at which people convince themselves that a loan alone will solve their problems. I often hear people say, "If someone would just lend me the money, I'll never get in trouble like this again." And they won't -- until the next time. It is not uncommon for us to see people with multiple cash advances on credit cards, loans from employers, family and friends, loans against retirement plans, and home equity loans or mortgage refinancing. Trying to bargain your way out of debt by making promises to avoid financial problems in the future won't work. Asking for help is not a sign of weakness. In fact, it's a sign of strength. If you don't get professional help planning your roadmap for the future you are significantly more likely to fall right back into the same situation again.

Acceptance - "I am responsible for my actions and will do whatever it takes to solve my problem."

Once you have accepted the fact that you have financial problems and that you may be partially or wholly responsible for your situation, relief is just around the corner. At the acceptance stage you are more willing to get and accept help. People who are completely ready for help take full advantage of assistance and their lives become easier and more enjoyable very quickly.

Resurrection - "I'm ready to be financially successful again. Take me by the hand and lead the way."

Resurrection means "coming back to life," which is a fitting analogy because many people feel as if they are rising from their financial death after having suffered through a money crisis and finally seeing light at the end of the tunnel.

Rebirth - "I'm ready for an even better financial life."

Remember that light you saw at the end of the tunnel when you started to get help with your financial problems? When you reach the rebirth stage, you are finally exiting the tunnel into full sunlight. The only thing you need to be worried about now is not getting into trouble again.

Eric, another important lesson is that while it feels so intense and so real in that moment when people are suffering through financial problems, the same situations have been repeated over and over again since nearly the dawn of man. You should read about the history of Betty and Dave from the early 1960s

You will also find the exhibit I put together on the History of Credit and Debt to be very interesting also.

If you want to help others with financial problem then I suggest that you read and very closely study the many valuable lessons contained in Eliminate Your Debt Like a Pro, The Beach Misses You and The Path to Happiness and Wealth.

Over at the nonprofit group I am president of, Myvesta.org, we are in the process of obtaining funding to build a national network of volunteer counselors to help people with troubles and issues. That would be a perfect opportunity for you to get experience helping others.

Steve

Wyatt Asks…

Q: What can I do to delete information that is listed on my Experian Report that doesn't show up on my TransUnion and Equifax Reports? They are reporting information incorrectly and all my efforts are met with the statement "Already Verified" which I know Experian did not do because when I called the creditors they have no knowledge of the accounts!

A: Wyatt,

I answered your question on my MoneyHelp radio show. You can listen to the show online but clicking here.

Christopher Asks…

Q: Hi,

I tried to get help from credit counseling also, they told me to wait until I was in the requirement. Basically, I lost my job in construction (laid off). I tried to find a job. I couldn't support my family on unemployment (which took me forever to get). I'm in a Chapter 13. I haven't seen improvements. I feel like the lawyer /trustee are making lot's of money off of my situation. I would like to move, mainly because I could pay everything off if I did. The problem is my credit. I even signed up for credit improvement. I feel stuck in a house that needs improvement every five seconds. I can't go or do anything with my family. I know that I could pay off the 19,000 if I could dismiss this and get a debt helper. Is this possible? How can I dismiss this case. I had no support since I lost my job. I'm working now. And can't hardly pay the lawyer /trustee/mortgage.

Sincerly,
Christopher

A: Christopher,

You need advice from a bankruptcy attorney licensed in your state. You can find one here.

Graffie Writes...

Q: My sister died 18 months ago and I was an authorized user on 3 of her credit cards, I no longer charge on those accounts but still pay them each month. They are on my credit report. Am I liable for her accounts? What will happen to my credit score if I stop paying? Will it be affected?

A: Graffe,

I answered your question on this past weeks radio show. You can listen to it online.

Steve

Chandra Writes...

Q: I inherited three cars from my divorce since it was in my name only. I took a home equity and paid off one of the cars which my ex-husband drives and then fixed my roof and paid off several credit cards. The dilemma I am facing now is my 19yr old son is driving another car - 2001 Toyota, Camry which he inherited from his dad who lost his job. My son was paying for it from his accident settlement, and now he is running out of the money in two months and does not have a job.

I still owe about $9800 on this car as well as $20,000 on my 2002 Dodge, Grand Caravan, for which I owe about $8000 upside down. I have a $1000 house payment and my total net income from two jobs is $3600 which takes care of all my total expenses. However, I have no savings at all and living paycheck to paycheck. I am thinking about filing for bankruptcy and get rid of my van and borrow money from a relative to buy my son a used cheaper car, as he is in college right now and needs transportation.

One lawyer told me my income is too high to file Ch 7 Bankruptcy and now I am in a dilemma as I cannot afford to pay two car payments of almost $700 plus $300 insurance. Therefore, please advise.

Thank you,

Chandra

A: Chandra,

I would get a second opinion from another lawyer. You can find a local bankruptcy attorney here.

Robert Asks…

Q: Steve,

My newly married wife and I are having an issue regarding finances and credit repair. I am 43 an owner of a company along with a couple of partners. I filed bankruptcy 9 years ago and it falls off my credit report in May 2006. My FICO today is around 620-640 I am unable to qualify for any loans or buy anything on installments. I use cash for everything although I do have CC with $300.00 limits on each. My income is around $6,000 before taxes. We are renters and have virtually no debt including limited credit card debt.

My wife age 30 on the other hand has a credit score of 760 with no outstanding debt except maybe $1000.00 on cards with a $30,000 limit.

We wanted to purchase a home this past week and are told that my credit will not qualify for a decent rate and that hers has no installment loans only credit cards. She has never bought a car via financing or any other large purchase that would show installment credit. We were informed if she had this it would most likely improve her score to over 800 thus qualifying her to apply and receive a decent interest rate on a home loan.

My idea was to buy a car on installments I realize a new car is one of the worst purchases one can make however I was also told that it would improve my credit dramatically if I were to cosign the loan and hers would improve having taken the loan as the primary. Our goal is to start investing in property and move to San Diego within one year from Minnesota. I believe this is a smart way to go and after maybe 6 months we could both enjoy high credit scores and be credit worthy.

My wife is Asian and believes everything should be paid for using cash it is kind of an Asian tradition if you will. I am trying to convince that people that want to build wealth do not pay cash for everything especially not cars and homes.

What do you advise?

Sincerely,

Robert

A: Robert, Robert, Robert,

There are a bunch of issues here that are all intermingled. Your bankruptcy that long ago should not be impacting your credit score now. I suspect that we have some unresolved credit issues still on your credit report that you might not even be aware of. Follow my credit repair process first.

With your current credit scores approximately 75% of the population has a score better than you. Something else is going on here. You should follow my two-step plan to rebuild your credit.

I would get a second opinion of the loan situation. Just because one loan broker said no, does not mean that it is not possible to get a loan. Visit these folks and you'll probably find a "yes" among them. Just remember that while you might get approved, it will probably be at an expensive rate until we get the credit score situation worked out. Lender 1, Lender 2, Lender 3.

Your wife's view about debt is valid. Your position that people that want to build wealth do not pay cash for everything especially not cars and homes, is not exactly true.

While it is possible to use leverage, through loans, to acquire items that you would not otherwise be able to purchase, you also have a significant amount of risk.

It would be a tough philosophical argument that one path is better than the next. While paying for things in cash is significantly smarter from a personal finance point of view, it does not help your credit report. On the other hand, doing things which improve your credit report is not necessarily the best way to protect your personal finances.

The underlying problem here is that the credit score is a number designed to give lenders an indicator of how much money they can safely make off of you. A high credit score tells lenders that they can more safely lend you money, even if you really can't afford it, because the calculation labels you as a person of lower risk of default.

There are many people that have crummy credit scores that have significant wealth because they turned away from debt and live on an all cash basis. Their credit scores suffer because their reports don't contain aged or new lines of credit to score.

I think that buying a car to buy a home is a serious mistake and I am also worried about your upcoming move. You don't want to start out your real estate career as a long distance landlord. You just don't.

Here is a book that even new real estate investor should read. It is packed with real world sage advice. Read the reviews on the book, many, many others agree with me that this is the best landlord book ever written because it is.

Steve

Your Money Coach For Comfortable Success,^sm