Here’s a short clip on the prevention side. As the economy takes some time to recover and people are still out of work, some tips from Consumer Reports:
As Tisha B’Av falls upon us yet again this year, there is a central lesson that can be learned. An op-ed in the Jerusalem Post gives some guidance as to how to look forward while in the midst of tragedy. My thoughts for this blog take me to a vision of ‘Life After Poverty”. Looking towards a new and perhaps better (in the mean time of course…) reality. Here is the article:
History is good at telling us about the Before and After. As to how we get from one to the other, not so much.
Before 70 CE, Jerusalem was the physical and spiritual center of the Jewish commonwealth. After the Romans destroyed the Temple, Judaism emerged as something different; a religion and people without a temple, sacrifices or even a state. The transition from one era to another is a harder story to tell, but our sages gave it their best shot, embodying the drama in the story of one man, Rabbi Yochanan ben Zakkai. Read the rest here.
Here’s a short clip from Consumer Reports:
In a new series, we will be bring quick tips on money savings. This first video reminds us of how to save at the grocery (1:45)
Here’s some food for thought on debt consolidation from Dave Ramsey:
Myth: Debt consolidation saves interest, and you have one smaller payment.
Truth: Debt consolidation is dangerous because you treat only the symptom. Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it – you just moved it! You can’t borrow your way out of debt. You can’t get out of a hole by digging out the bottom. True debt help is not quick or easy.
Larry Burkett, noted financial author, says debt is not the problem; it is the symptom. I feel debt is the symptom of overspending and undersaving. Our certified counselors will not recommend debt consolidation for a client. Why? Because debt consolidation doesn’t work.
Debt Consolidation Statistics
A friend of mine works for a debt consolidation firm whose internal statistics estimate that 78% of the time, after someone consolidates his credit card debt, the debt grows back. Why? He still doesn’t have a game plan to either pay cash or not buy at all. He also hasn’t saved for “unexpected events” which will also become debt.
Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case we review, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, BUT if you stay in debt longer, you pay the lender more, which is why they are in the debt consolidation business.
Debt Consolidation Example
For example, let’s say you have $30,000 in unsecured debt, including a 2-year loan for $10,000 at 12%, and a 4-year loan for $20,000 at 10%. Your monthly payment on the $10,000 loan is $517 and $583 on the $20,000 loan, for a total payment of $1,100 per month. The debt consolidation company tells you they have been able to lower your payment to $640 per month and your interest rate to 9% by negotiating with your creditors and rolling the loans together into one. Sounds great, doesn’t it? Who wouldn’t want to pay $460 less per month in payments?
But they don’t tell you that it will now take you 6 years to pay off the loan. This may not sound that bad to you at first unless you realize how much more you will actually pay in additional payments. You will now pay $46,080 to pay off the new loan vs. $40,392 for the original loans, even with the lower interest rate of 9%. This means you paid $5,688 more for the “lower payment”. Not such a good deal after all. This example shows you why they are in the business - because they make money off of you.
The Real Way to Get Out of Debt
The answer is not the interest rate; the answer is a Total Money Makeover. The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it from someone like Dave Ramsey. Don’t try debt consolidation!
Posted by admin under Tzedakah
A Bit about Karmey Hesed:
Karmey Chesed, literally translated as vineyards of kindness, offers a cluster of services for the needy Jewish family in Israel. Just as grapes, one of Israel’s seven special species, require proper care to ensure that they grow properly, we at Karmey Chesed work tirelessly alongside our volunteers to provide these families with both their physical and emotional needs. We strive to aid unfortunate families in any possible way, helping them maintain their dignity and get back on their feet.
The word “chesed” has many definitions; it may mean a donation of money; a package of food; new clothing; a helping hand; a kind word, a smile. Karmey chesed does it all- for families who have been beset by financial difficulty, whether due to medical or other causes, their whole world seems to be crumbling before their eyes. Families who were once completely self-sufficient, find themselves unable to afford the most basic of necessities, namely food. We hear about these families through concerned relatives, neighbors and friends, who help as much as they can but it’s not enough. These families often suffer in silence; they try to keep going as they once did, attempting to cover up the evidence of their deteriorating situation.
R’ Aryeh Veingarten, founder of Karmey Chesed, did not let these families go unnoticed. He detected their needs, and heard their silent cries. He saw that these families needed help, and stepped in to fulfill that role. He took these families, and worked with them from A-Z, providing for their medical, emotional, and financial needs, getting them back on their feet. Karmey Chesed currently operates in Jerusalem, Beitar Illit, and Gush Etzion We hope to expand our activities to other areas as well.
Everything is done quietly, without fanfare- but we can’t do it alone. The organization is run by a few dedicated volunteers, but the need is great and the funds are low. We are therefore turning to you, dear friends- to help us help our neighbors and friends in our literally life-saving efforts.
For more information about Karmey Chesed’s work or to make a donation, please visit our website at www.karmeyhesed.org.
Spoke with a good friend today from the old country. He lives in Toronto, Canada (sort of America…). One of his colleagues is visiting her grandmother in Meah Shearim.
She had witness the senseless destruction the haredim we causing during the riots (the call them “demonstrations”) last week. Her main observation was that she simply could not understand why these people insist on destroying themselves. And that is exactly the point.
The hareidi community can be so extreme in their “protection of themselves” from the rest of the world that it many times results in the most negative consequences.
A case in point? This same friend is thank G-D doing well in the business world. He is on the tzedakah drivers’ route for the “shnorers” (beggars) that come from Israel to collect money. These beggars in many cases do so for their own personal financial need.
he had a 21 year`old (young!) man drop by recently to ask for a donation. He was newly married and everyone is thank G-D healthy. he was collecting to support his new young family. My friend just could not understand why this young man does not go out and get a job.
The answer of course is that the hareidi community in which he lives frowns upon anything that will take him away from his Torah study. Hmmm, some of my most peaceful Torah learning has been on those trans-Atlantic flights…
The point of course is that the implosion, the self destruction, of this community is rampant. Hopefully its demise (that is, the demise of the self destruction) will not be too painful.
“If we waited for poverty, disease, and social ills to be rectified before venturing out, we’d still be in caves”
Some tough words to swallow but this line from an article in the Jerusalem Post yesterday have much truth in them. To be honest, I do not agree at all with most if not all of the article, but the fact remains that if society, and each and every one of us as individuals does not see the need to be in a mode of constant progress, we are in trouble. Innovation, “progress”, investment in the financial growth of the world are THE FOUNDATIONS of bringing human suffering to an end.
And for those of us who thought the reccesion was on its way out, we got some “encouraging” news from the banking world. Or at least from one bank, Bank of America. Hey! They reported a “profit” of $3.2 Billion. That sounds great! Problem is in the fine print. These “profits” are a result of selling off assets. Looks like the Tzedakah World is not quite getting easier just yet. Here’s a short article from The Fool:
Bank of America (NYSE: BAC) announced surprise quarterly earnings this morning of $3.2 billion, or $0.33 per common share after stripping out preferred dividends. That’s good and all — the bank hasn’t had the best of years, you know.
Many are touting B of A’s earnings as a sure sign that things have turned a corner. I wanted to be one of them. I crossed my fingers and vowed to stay positive. When the results first came out, I was hoping I could at long last say something upbeat about the bank.
But not today. “Earnings,” you have to remember, can be a curiously hazy number.
Behind the seemingly solid news is this little nugget in B of A’s press release:
[T]he increase was driven by a $5.3 billion pretax gain on the sale of [China Construction Bank] shares … Noninterest income in the period also included a $3.8 billion pretax gain from the completed sale of the merchant processing business to a joint venture.
Ah … so moving things right along were $9.1 billion in gains from selling assets in order to raise much-needed capital. That’s kinda important to note when you’re talking about a $3.2 billion profit.
These are one-time gains that don’t reflect earnings power and, more importantly, reduce future earnings power as promising assets are shed. Without these sales — looking at the company on a normalized basis — B of A surely would have been deep in the red. Some might find that intriguing.
Not so pretty in the Citi
Now we move on over to Citigroup (NYSE: C). Its quarterly earnings also made eye-popping headlines this morning. “Citigroup delivers surprise $4.3 billion profit” said one media outlet.
A $4.3 billion profit? Citigroup? Really?
No, not really. And that’s what’s sad. Citi’s $4.3 billion “profit” was entirely made up of selling most of its Smith Barney unit to Morgan Stanley (NYSE: MS), which generated a pre-tax gain of $11.1 billion.
Never mind that this is obviously a nonrecurring gain. Never mind that without the sale, Citi would have reported a gigantic loss. Oh, and never mind that Smith Barney was one of Citi’s only consistently stable sources of earnings. People see green, and they get fired up. That’s the life of an investment community whose outlook is firmly locked in a 90-day timeframe.
I’ve noted that Goldman Sachs‘s (NYSE: GS) and JPMorgan Chase‘s (NYSE: JPM) recent earnings, while impressive, might end up being one-off events. But at least they’re actually earning the money. They have earnings power — it just might not be wholly sustainable. For Bank of America and Citigroup, the quest to find true earnings power is still quite elusive.
Our contributing writer, Jonathan Rosenblum, wrote last week in the Jerusalem Post on how “average Hareidi” is not preoccupied by the Shabbat related parking lot rioting. I can certainly attest to that. The issue however literally nauseates me when this week’s riots have already caused injury to both sides of the “battle front”. And now, the newest of “holy” acts, a Rabbi in Kiryat Yovel is attacked by “Haredim” because he will not give up his shul (synagogue) to Hareidi management. THIS TYPE OF BEHAVIOR, with all due respect to Mr. Rosenblum MUST concern every Jew, Hareidi, Secular, and every flavor in between.
I write and wonder, are these violent acts simply part of the manifestations of a community in poverty?
Here is Jonathan’s article:
Recent media coverage of the chareidi community in Israel has naturally focused on the rioting over the opening of a municipal parking garage on Shabbat. Media attention follows action, as the night the day, and that is true both of the secular and chareidi media.
Yet curiously once one leaves the confines of Meah Shearim, which is something of an outlier even in the chareidi world, one does not find the issue dominating private discussions. I was in the United States at the height of the demonstrations. But upon my return, I did not hear much talk about them. Such discussion as there was tended to involve recriminations over the political manueverings within the haredi community that helped bring Nir Barkat to the mayor’s office.
Obviously, no chareidi Jew condones the opening of the parking lot, but the issue is not a burning one. That most of the Israeli population, even the majority of Jerusalemites, are not Sabbath observant is, after all, hardly news. Protests will not reverse that fact, and may even exacerbate the situation. Read More.
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