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December 03, 2007

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As I was writing a check this morning, I thought about not having to spell out the numbers. Another thing I learned while working at a bank was that no one regularly verifies signatures anymore. It's up to the account owner to dispute it if a check has an invalid signature. I've told my mother-in-law this when I've had to sign a check for her, that it doesn't matter if I sign my name or hers, even if I'm not on the account.

Wow, quite a post today. I'll just comment on the credit card part, and financial education. EVERY SINGLE child should have to take several personal finance courses. Most young (and older as well) adults know little about credit cards and the rates AND FEES charged. Many with the avergage household credit card balance of $2,200 will pay 3 to 4 times that amount back to the lender, all because of fees and interest. Most young people today know nothing about mortgages and have enjoyed ridiculous things like INTEREST ONLY or ADJUSTABLE RATE mortgages where one never pays down any principal and thus creates a wonderful stream of income for the lender and the permanent burden of outflow for themselves, all while living in something they really don't qualify to live in at all. Then they take out equity loans or second morgages to fund yet an even higher standard of living than they really earn. Few young people balance checkbooks. Most have no clue that they end up paying twice for cars while thinking they they are getting a "deal" on low rate financing. Many waste money of useless "extended warranty" policies that never seem to really cover you when something breaks, or that covers something that really NEVER breaks. I spent 30 years in the financial business and always taught everyone the most EXTREMELY conservative route one could take. Work hard to earn, spend less than you earn, always save 25% of your income before you raise your lifestyle, never borrow anything except for a mortgage and make it your lifes goal to pay that off in 10-15 years. Pay off your credit cards every month, if you cant then cut them up. I learned all of this in business school in undergrad and grad work, when I was broke. Everyone should learn about it.Start with yourself.

Fascinating - great round up of interesting and scary stuff.

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