Wednesday, January 13, 2010

Morality in Today's Financial Market

After a long conversation with a friend of mine about what to do with a property that we co-own, I got to thinking about a very important question in today's abysmal financial market. "Do I truly have a moral responsibility to repay the loan on our condo?"

This is a really intriguing question to me. My partner in the condo, who happens to be a banker, seems to side with fulfilling our contractual obligation to the bank as we originally agreed upon via our promissory note. I can completely understand where he's coming from. We promised to pay it, and put it on a contract. That is our obligation to that bank. We are able to make payments right now, so we should just keep doing it. It's very simple.

My point of view differs, however. Here's the problem with fulfilling our obligations:

1. We borrowed money from the bank on a property that was valued at $205,000.00 in 2006. That property is now worth around $110,000.00. Is that really fair to us? We couldn't even come up with the difference to re-fi if we wanted to do that.

2. The contracts we signed have lots of verbiage about defaulting on, and letting go of, the property. This makes it within the contract to do so.

3. Our government is paying millions upon millions to bail out banks in trouble, and to help people in real estate duress. Why shouldn't we get a break?

4. Now, times are tough, I'm struggling to make my monthly payments as it is, after a job transfer to L.A. I have this property that we can't even rent out for our monthly payment costing us hundreds of dollars a month.

My business mind is telling me to cut my losses right now via short sale instead of paying on a mortgage for a property that won't recoup its value for decades. Am I a bad person here? What IS the morally sound thing to do?

Tuesday, January 5, 2010

We Need More RadioShacks

After spending 50 minutes at Best Buy yesterday, trying to find a new battery for my wife's camera, I remembered something I told myself year's ago...I hate Best Buy! It has created its success on its size and selection, but definitely not its customer service. Every time I go there I feel like I'm on a used car lot. The service reps aren't there to help you, nor are they even knowledgeable enough to do so. They are mostly there to sell you the most expensive item they carry. Yesterday when I told a young lady that I was having trouble finding the right battery, she grabbed a battery off the shelf (which was $50, by the way), basically threw it at me, and walked away. When I read through the label for compatible cameras, I realized that my camera was not listed. When I was finally able to find her again, she acted as if I was bothering her and said "all we have is what's in front of you" and continued her conversation with another employee. I then tried to get help from another gentleman, who refused to even look at me. So I decided to try and figure it out on my own. "Hey, I work for IBM", I thought. "I should be able to figure this out faster than some teanager can". So I found a similar model camera and began to open up the box to figure out what kind of battery and charger was in it. As soon as I started to open up the box, the kid who had previously ignored me suddenly looked at me and told me that I couldn't open the box. I responded with "well can you help me then?". He said, "in a minute" and then walked away. Needless to say, he never returned. Frustrated that I had been there so long, and not wanting to have to pay for parking after the 1 hour limit had elapsed, I grabbed what I though would work and checked out. Of course, I found out that it was the wrong part when I got home to test it...Did I mention I hate Best Buy?

This leads me to my next point. My favorite store to go into is Radio Shack. It's quiet and the people there genuinely try to help you. The last time I was there, I was convinced by the sales guy to buy the cheaper item as it was "all I really needed". Isn't that refreshing? My only problem with Radio Shack is that they are so small, and selection is so limited for many consumer items. I really wish they could expand into stores that offer more video games, DVDs, etc, so that I could go there for all of my needs. Settling for Best Buy sucks right now, but there really isn't much of an alternative right now. Best Buy locates in better areas, has so much stuff, and advertises much more effectively than Radio Shack. It's really a shame because I'd like to give Radio Shack all my business, and I'm sure most others would as well once they realized the world of difference. I'm crossing my fingers in the meantime (and avoiding Best Buy as much as I can).