Protect Yourself

May 8, 2009 5:57 am

Braun Mincher

Braun Mincher is the author of “The Secrets of Money: A Guide for Everyone on Practical Financial Literacy”. This blog entry is from Chapter 10 of his book, Your Keys to Financial Success and the 4th of 20 entries on this subject. For more on Braun click here.

• Be a savvy consumer.
• Do your research.
• Make educated decisions.
• Ask questions.
• Beware of scams.
• And when things don’t go your way, don’t be afraid to walk away.

This goes a step beyond simply accepting responsibility. It can be a nasty world out there. While the majority of people you will do business with are completely honest and perform with integrity, some are not and do not. It doesn’t hurt to be wary. Trust is earned. Remember what I said about reputations. Don’t just buy into an “honest face.” Make sure there’s an honest person wearing it.

I sometimes drive people crazy by proceeding slowly. If I’m buying a house and there’s a stack of papers half a mile high in front of me, what’s my rush? It’s my time; it’s my money.

If I want to read it all, I’ll read it all. That’s my prerogative. And if someone wants to rush me, that’ll usually make me go even slower. Is this passive/aggressive behavior? Not at all. I simply figure that anyone who doesn’t want me to read through contracts must be hiding something from me.

If I have a question, I ask it. The only dumb questions are the ones you don’t ask. Everyone is so worried that people will think they’re stupid. Frankly, I don’t care what you think of my I.Q. If I’m buying your property or your business, or I’m purchasing insurance or a service from you, I really could care less if you think I’m stupid or dense because I’m not buying into your logic.

Don’t be insecure. I know; it’s hard. We grow up wanting everyone to like us. But be liked for the right reasons. I honor the commitments that I make. That’s a likeable quality as far as I’m concerned. I expect the same of others. That sometimes makes me unpopular. I accept that. You have to as well, if you want to be successful. Otherwise, you are placing a big “Kick Me” sign on your back.

Don’t be afraid of your gut (unless it is unhealthily large and bloated). Sometimes I sit across from someone and I just have a gut instinct that this is not a trustworthy person. If that’s your first instinct, it’s more frequently correct than incorrect. If your sixth sense tells you to be on alert, then be on alert. And if things begin to go south, abort, abort, abort! We have instincts for a reason. Nothing will make you kick yourself more and longer than ignoring your internal warning signals and winding up in a horrible business deal.

Get second opinions. Surround yourself with people you can trust. Rely on personal recommendations. Remember what I’ve been saying all along about alignment of interests? If I need a good estate attorney and I have a friend who is a podiatrist and I trust and admire him, I might ask him who he uses and is he happy with him. Unless the podiatrist tries to send me to an estate attorney who is also his brother-in-law,
I feel protected and secure that I have asked a neutral source who has no personal agenda. There is an alignment of interest—he has no immediate monetary stake in the transaction. If we are friends who respect one another, he may ask me next week if I can recommend a good roofer. If we both continue to give each other good business leads, we will also continue to be friends as well as continue to do business with one another.

Still, don’t be lazy. Protect yourself. Maybe ask two friends for recommendations for professional services or whatever it is you need, particularly if it is a major purchase. Then, do some independent research as well. No one watches your own back as well as you do.

Am I paranoid? No, I don’t think so. But wary, be very wary. Careful—that’s an even better word. Be careful. Bad decisions can be costly. No, I’m not talking about going to one gas station, filling up, then driving another few blocks and seeing gas for two cents per gallon less. Big deal; so what? I’m talking about major business and life decisions. Get a lousy building contractor and it can over-cost you tens of thousands of dollars and keep you in litigation for a year or two. These are not the kinds of decisions to enter into lightly. Protect yourself!

Know what you want and what you need and demand that you get it. Some people might call you a jerk for doing this, but I believe it is all in how you present yourself. I don’t walk into a store and immediately slam my fist on the counter.

Heck, I don’t slam my fist on the counter even if some catastrophe has occurred. That doesn’t get you your way; it just makes you look like a raging lunatic.

If I go into a men’s clothing store and I say that I want tan chinos without pleats in the front, then that’s what I want.

If you, the salesperson, want to try to educate me that pleats are in this season, that’s fine, but only up to a point.

I’m never averse to learning something new. But, perhaps I really don’t care about what the current issue of GQ is saying about pleated pants. I don’t want pleats. At this point, either sell me what I want or I’ll go elsewhere. And like the old saying goes, I don’t go away mad; I just go away.

I had a horrifically scary business transaction recently where I am incredibly glad I stood my ground. Looking back on it, I wonder out loud how many other people would have simply allowed themselves to be bullied.

I bought a used motorcycle from a dealer. He said he wanted to “mail” me the title in a couple of weeks, and I told him that he would need to give me the clear title that very day, to which he reluctantly agreed. I tried to register the vehicle the next day, but could not do so because the title still had a lien on it! This is called “title kiting,” and it is one of the new automotive scams sweeping the nation. I won’t get too deeply into it, but basically, people have started selling cars to which they do not possess clear title. Maybe there is a lien on the title, or perhaps the car is being held as collateral—sort of like in a pawn shop. Most commonly, it might involve you buying a car and your money being used to pay off some other debts—maybe to the car dealer’s loan shark. Then you have to wait for the next guy to pay for another car before the car dealer can use his money to purchase or clear the title on your car. Any way you slice it, it’s a mess and it’s completely illegal.

The dealer I bought the motorcycle from didn’t want to give me my title right then and there, like I asked. He said, “By law, we have thirty days to mail you the title.” And he may have been legally correct. But that was not what I wanted. I’m Braun and this is what *I* wanted and how *I* wanted it done. If push came to shove, I was prepared to turn on my heels and leave. There are a lot of motorcycles in the world.

I could buy another one elsewhere.

You must always remember: you are empowered to act this way, too. You don’t have to be a millionaire to want what you want and get what you want. The poorest person in the world can still make a stand that he or she is not going to be pushed around or bullied. In a transaction or conflict, no one is going to empower you but you!

Frankly, the motorcycle dealer has his rights, too. If I had said, “Not only do I want clear title, but I want the keys to your house,” he would have been right to tell me to jump off a cliff. And I would respect him for feeling that way.

Back to the story … I wanted to pay for the motorcycle by credit card. Remember, my credit card company gives me added consumer protections against fraud. “No,” the dealer said, “we don’t take credit cards.” I considered my options and offered him a check, which he accepted, but I still was not going to leave with that motorcycle unless he gave me a title. Again, I could have buckled, but I didn’t. I was prepared to stand my ground until it became obvious I would not get a deal that I could live with. Was that to occur, I was ready to walk.

Well, you already know the climax of the story: the title was not clear. Because I paid by check (my second best option next to a credit card), I immediately stopped payment on it before it cleared. This is not very hard to do, although it does cost a few dollars. But when you’re making a purchase for several thousand dollars, what’s a small bank service fee?

I called the dealer up and told him what had happened and that I had stopped payment on the check. Needless to say, he was not a happy camper. Again, the bullying began. He became very threatening and said that he was turning the case over to the District Attorney and he would sue me as well. Note to readers: No one threatens lawsuits more often than crooks. Prepare to deal with it. When it happens, find your “happy place” and calm down. If you’re in the right, you will almost always win out in the end.

Since I’m not a lawyer, I called one that I trust and told him what happened. In order to put myself in the best possible legal position, my lawyer had me write out a new check to his law firm’s trust account for the amount of money in question. We both feared that if I simply returned the motorcycle at this point, this crooked guy would probably deface it intentionally when my back was turned, then try to sue me for damages. My lawyer then sent the dealer a registered letter explaining that the money was being held in escrow and that once he provided me with clear title, the law firm would release the funds to him.

In the end, it all worked out. Was I happy? Not really. The whole thing wasted a lot of my valuable time. Was the dealer happy? No, because I caught him in the midst of a scam and if I wanted to waste more of my time, I probably could have made a ton of legal trouble for him. But I’m not about vengeance. Revenge isn’t cost-effective.

Bottom line: I protected myself. If I had not been a prudent consumer, I would have been out thousands of dollars. The art of the deal (stealing a line from Donald Trump) is not simply getting what you want, but getting it the way that you want. I could have allowed myself to be bullied by this dealer and in the end, I eventually might have ended up with the motorcycle and a clear title—maybe. But that’s not how I roll. Fair is fair and if I buy something, I’m buying it without undisclosed liens. Those are my terms.

Beware of bullies. The world is full of them. The thing always to remember is that this is a civilized society. Usually, no one is going to punch you in the nose if you stand your ground in a negotiation. If they do, they go to jail for assault.

Speaking of Donald Trump, I’m reminded of the late Merv Griffin (Huh? Bear with me; this will all make sense in a minute). Merv was a D-list actor and big band singer when he first got started. A chubby guy with no overpowering talent, he wasn’t going to ever become a big Hollywood star.

Eventually, he morphed into a TV talk show host, where his friendly and non-threatening manner made him a hit with housewives across the nation.

Then Merv found his true niche. He loved games and he eventually developed the TV game show “Jeopardy,” followed shortly thereafter by “Wheel of Fortune.” Suddenly, Merv was a billionaire entertainment mogul. He invested his money wisely and his fortune grew and grew.

One day, Merv decided to enter the casino business. He made a move to take over Resorts International, a major player in the casino game. Unfortunately, at that very same moment, Donald Trump was trying to do the very same thing (See, I told you I would tie them together.).

Now, Trump is a tough-talking New Yorker and Merv was, well, a little guy, much older, and more than a little on the effeminate side. In a street fight, I’d have bet on Donald Trump, no question about it. But like I’ve been saying, life is not a street fight.

As Merv tells it, “The Donald” called him up screaming and yelling, threatening and bullying every way he could—the kind of treatment that had cowered so many other businessmen Trump had conquered over the years. Merv simply chuckled.

He responded, “Donald, you’ve got a fleet of sharp-toothed lawyers and so do I; so let’s stop the bellowing and talk business.” In the end, Merv got Resorts International and the everlasting respect of Donald Trump. Now, if a guy like Merv can stand up to a guy like Trump, you can stand up for what you believe is right, too.

In the end, think things through. Consider where you are vulnerable. Cover your flanks. No one watches out for you better than you—but only if you’re paying attention to the details and looking at all the angles. And if you’re not sure about something, get some advice, then get some more advice, then research, research, research. Anyone can become an expert at anything if they’re willing to invest the time.

Listen to Braun speak on Financial Literacy.

Braun Mincher with Neil Cavuto on Fox Business News

Braun Mincher talking about Financial Literacy on Fox Business

—