Elements of a good conference call

A few of my friends have started a free conference calling service and asked if I would post something for them.  I told them, only if it has value to my readers.  They came up with this list which I think is pretty good.  I can not tell you how many conference calls I have been on and things on this list have been done.  It reminded me, in today’s environment it is important to pay attention to the small details to make sure we keep our clients.  If you want to try the service it is completly free and I have been using it for the last two weeks with out any problems.  Here is the link to the free sign-up (it is in beta testing).

• Always conduct the call from a quit location.  Even the smallest sounds can be picked up by your phone and cause interference.
• Remember to always send out your bridge, dial in number, and any passwords needed.  Nothing looks worse then a last minute update to the meeting invite with this information.
• Remember time zones.  Specify what time zone the meeting will take place.
• Take a roll call so that each participant knows who is on the call.  If possible a quick introduction by each participant is best, even if it is just saying their name.
• In large calls, when you speak inform the others who you are.  Everyone may not know your voice.
• If possible, avoid the following: Cell phones, cordless phones, poor quality headsets, blue tooth, and speaker phones.  If you have to use any of these, make sure you know how to mute incase the connection is poor.
• Avoid using hold, this can have unpredictable results.  Nothing is worse then a large conference call that is playing a companies on-hold music.
• Don’t multi-task, or if you do make sure you’re on mute.  Yes, people can hear you typing or know your not listening when you don’t respond to a question.
• Use people’s names as much as possible.  Again this helps clarify who is talking or who is being talked to.
• If you have special guests or executives that can not stay the entire time, have them introduce themselves, say a few words, and then let the call take place.  Unlike a face to face meeting, when the guest leaves no one has to know.
• If you are a key participant, announce if you have to leave the call for any reason.
• Have a back up plan for potential technology failure.
• If you control the start/stop of the call and have to leave early, have a second person with proper privileges so the call does not get cut off.
• Distribute supporting documents with the meeting invite to give people the opportunity to prepare.
• Inform participants if they have to have a file or website open on their computer desktop.  If it is a website, make sure they have any login credentials.

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What does the American Recovery and Reinvestment Act of 2009 mean for you?

Well, the first thing you have to know is that if you make over $75K as a single or $150K as a family, many of the tax breaks phase out.  With that said, here are the things the Stimulus Bill has for individual tax payers:

• You get up to an $8,000 tax credit if you’re a first time home buyer and you purchase the house between January 1 and December 1 2009.  Now the tricky part here is what qualifies as a first time home buyer and how much of a credit you actually get.

-For the credit you get 10% of the value of the home up to $8,000.  That means to get the full credit you have to purchase a house with a value of at least $80,000.

-For the first time home buyer rule, obviously if you have never purchased a home you qualify.  But if you have had a home before you can still qualify by the IRS definition below:

A first time home buyer is anyone who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

• The next thing you get is relief from certain Alternative Minimum Tax.  AMT is a horrible tax code that was meant for the extremely wealthy to make sure they did not take advantage of to many tax deductions.  The problem, however, is the AMT has not been updated and now applies to millions of tax payers.  Each year this grows and really penalizes those that qualify for it.  The rules are complicated and it is best to ask your tax professional, but if you paid AMT in the past, you may have some relief temporarily for 2009 and 2010.

• A one-time payment of $250 to Social Security beneficiaries, railroad retirees and veterans receiving benefits from the Department of Veterans Affairs. State government retirees not eligible for Social Security would also get the $250 payment.

• A $2,500 tax credit for college education expenses.

• For the refundable child tax credit for low income workers, the bill reduces the floor to $3,000 from $8,500.

• A refundable tax credit of $400 per individual or $800 per couple called the “making work pay” credit.  The amount will not be in the form of a check, but rather your withholdings on your paycheck will be adjusted to reflect the tax credit.  If you get paid twice a month, this will give you approximately $16 more per pay check.  More on this credit can be found on the IRS website here: http://www.irs.gov/newsroom/article/0,,id=204447,00.html
• Updated withholding tables from IRS.

• Money back for new vehicle purchases. The American Recovery and Reinvestment Act of 2009 provides a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles through 2009. The deduction is available regardless of whether ataxpayer itemizesdeductions on Schedule A. Purchases before Feb. 17, 2009,are not eligible for this special deduction.

The deduction is limited to the tax on up to $49,500 of the purchase price of an eligible motor vehicle. The deduction is phased out for joint filers with modified adjusted gross income between $250,000 and $260,000 and other taxpayers with modified AGI between $125,000 and $135,000.

• Cobra extension and subsidy. Workers who have lost their jobs may qualify for a 65 percent subsidy for COBRA continuation premiums for themselves and their families for up to nine months.

Eligible workers will have to pay 35 percent of the premium to their former employers.

To qualify, a worker must have been involuntarily separated between Sept. 1, 2008, and Dec. 31, 2009. Workers who lost their jobs between Sept. 1, 2008, and enactment, but failed to initially elect COBRA because it was unaffordable, get an additional 60 days to elect COBRA and receive the subsidy.

This subsidy phases out for individuals whose modified adjusted gross income exceeds $125,000, or $250,000 for those filing joint returns. Taxpayers with modified adjusted gross income exceeding $145,000, or $290,000 for those filing joint returns, do not qualify for the subsidy.

See more at the department of labor.

There is no doubt that we are currently living through a very tough economic downturn.  The job market is horrible, stocks are down, home prices still have not bottomed, and just about anything thing else you can think has turned the wrong direction.  In times like this, it is even more important to find the little things that make happiness.  The best part is that they are free, they don’t care what your house is worth, and they don’t need any money.  There are hundreds, you just have to be willing to find them.  Here are five to get you started:

1. Everyday do at least two things you would not normally do for someone. This can be anything to anyone.  It is amazing how much this can not only impact the person’s life you are helping, but also your own.  Try it for a week or two and you will see it will lift your spirits.
2. Focus on the good, not the bad.  We all get caught in the day to day problems.  It is important to find solutions to them, but letting them take control over you only leads to stress and anxiety.  One way to overcome them somewhat is find more things that you have that are good.  Make a list if you have to, but try to remind yourself everyday of those good things.  It won’t solve your problems, but it may give you a better state of mind to tackle them.
3. Watch less TV.  TV is full of stress, it takes away from family communication, and it creates a feeling of needing instant satisfaction.  Many will argue this one, but try it before you comment.
4. Talk more.  The best is with your family, but if that does not work with you, find a friend, or a co-worker.  Communication helps relieve stress and sometimes puts things into perspective by giving you someone else’s view.
5. We all make mistakes, learn from them but don’t obsess with them.  The best make mistakes, big and small.  When they do, they learn and move on making them a stronger person then before.  Beating yourself up does not help and only keeps you down.

As we roll into the new year many things have changed. A new President, tighter lending practices, higher unemployment, and a failing auto industry. So what does this all mean if you want to lease a car in today’s market? Simple, you will not see good lease deals and lease payments will start to converge with traditional loan payments.

Here is why. A lease is simply financing the deprecation of a vehicle or in other words you are paying for the decrease in value your car would have during the term of the loan. For example, if you buy a new car for $30,000 and in two years the bank thinks it is worth $20,000, then you are paying for the $10,000 + interest in a lease.

This matters in today’s market because the banks are being flooded with cars that are now worth far less then the banks anticipated the value to be a few years ago. As these low value cars come into the market and the banks can not sell them, they determine the future value of new cars to be based on what they see today. In other words, the banks do not believe a car is going to hold any of its value over a two to five year period.

To see how this matters lets take a second look at a car costing $30,000. In traditional financing your loan payment for five years at 5% interest would be $566, quite a high payment. A few years ago, someone wanting to drive a $30,000 car who could not afford $566 per month payment would lease. A lease with a money factor similar to a 5% interest rate would yield a payment of $358 base on 40% depreciation over three years. Bump that to a 60% depreciation and your payment jumps to $500. Almost as high as the traditional five year loan.

It is not uncommon for the banks to assign 60-70% depreciation rates over three years on today’s cars (especially American models).

The last thing working against you is the banks are not willing to lend making it harder to get good rates.

The car deals may be good, but don’t plan on leasing. To get the best deal in today’s market, you really have to buy the car with traditional financing even if that means you can’t drive the more expensive car.

On Wed. July 30th, the bill was signed into law by the President.

Before this, on July 23, 2008, the House Committee on financial Services released an opinion on HR 3221. In reading through the document, it goes through all the painted benefits of the proposed legislation, however, it does not address any of the risks, down sides, or other important things the bill does. In fact it makes some bold claims that I find hard to believe. Here is an excerpt of the summary:

FHA Housing Stabilization and Homeownership Retention Act
• Provides mortgage refinancing assistance to keep at least 400,000 families from losing their homes, to protect neighboring home values, and to help stabilize the housing market at no cost to American taxpayers.

• Expands the FHA program so many borrowers in danger of losing their home can refinance into lower-cost government-insured mortgages they can afford to repay.

• Protects taxpayers by requiring lenders and homeowners to take responsibility. This is not a bailout; in order to participate, lenders and mortgage investors must take significant losses by reducing the loan principal. In exchange for an FHA guarantee on the mortgage, borrowers must share any profit from the resale of a refinanced home with the government.

• Contains critical protections for taxpayers’ dollars, including higher refinancing fees that establish a new FHA reserve to cover possible losses from defaults on these government-backed mortgages.

• Only primary residences are eligible: NO speculators, investment properties, second or third homes will be refinanced.

• According to CBO, this three-year program, starting October 1, 2008, will not cost taxpayers a dime, as it is more than paid for by using funds in the first few years from the Affordable Housing Trust Fund.

• Provides $180 million for financial counseling and legal assistance to help families stay in their homes.

Read more here:
http://www.house.gov/apps/list/press/financialsvcs_dem/press072308.shtml

I take issue with the third point above. They claim this requires lenders to take responsibility by participating in reducing loan principals. While this is true, they fail to mention the real benefit to the bank is being able to take a worthless loan and transition it to a secured loan.

If just having banks reduce principle was the solution, why not have the courts mandate loan reductions on a case by case basis? Or the real problem is when home owner’s adjustable rates expire and they can’t afford the new rate, why wouldn’t the banks just hold the lower payments indefinitely and thereby preventing foreclosure. The answer is, they would still have to carry a risk that affects future lending, earnings, and the overall health of the bank. This risk is much more costly then a loan balance reduction, otherwise you would see massive loan restructuring. At the end of the day, the bank needs the loans secured or off the books. Currently the only way to get them off is through foreclosure.

With the passing of this bill signed by the president on Wednesday, from what I have seen and read on the major news networks, it also appears they have only taken the perceived benefits written by this document as well.

Here are some of the lesser reported things this bill does that seem to be overlooked:

-(sec. 3091) did they mention Christopher Dodd and Richard Shelby attached an amendment that requires electronic commerce to collect, aggregate, and transmit details of every electronic sale to the federal government?

That’s right, your latest iTunes, eBay, and Amazon purchase will become government knowledge. What does that have to do with housing?

Well, I can only speculate that this had origins from the major bank lobbyist and has something to do with the major competition they are seeing from companies like PayPal (currently process 30% of online transactions), but I will try to stick to only the facts unless I can prove otherwise.

The main purpose of this appears to be revenue generation to help offset costs of this bill. Companies will be required to file this information to the government on return schedules, if not they are subjected to fines. Given the burden of this task for many of these companies, they anticipate a large amount of fines and therefore place this as a revenue generating measure.

Seems like a silly way to generate revenue by divulging sensitive information regarding your online transactions so there must be more behind it. A word of gratitude should be sent to Dianne Feinstein and Barbara Boxer for issuing a letter objecting this measure.

-did they mention the tax increase: it changes the home residence and sale tax exclusions that state you must own/live in a house for two of five years to a pro-rated system that only gives you exclusions based on the time you lived in the house divided by the time you have owned the house? (sec. 3092)

-how about the provision that extends a tax credit that allows manufactures to use accumulated AMT credits as well as research and development tax credits to make investments that would qualify for bonus depreciation. The amount of investment is capped at the lesser of 6 percent of built up AMT and R&D credits or $30million. (HR 3221 amended by Debbie Stabenow (D-MI) and Sander Levin (D-MI). The idea behind this is to stimulate investment in new technology by reducing the tax burden.)

-Down payments for FHA loans will increase from 3% to 3.5%.

-(sec. 1101) A whole new government agency is created “The Federal Housing Finance Agency”.

-Penalties for business late filings will be increased. (sec. 3094)

-Extension of net operation loss carry back will be extended from two years to four years.

It does not matter if you agree or disagree with the legislation, the fact of the matter is that very few people understand what the bill does in its entirety. If the news and media only highlight positive things with all encompassing messages like “this will bail out homeowners” or “home owners will be saved”, which is certainly not true on that scale, most people will not know the facts and take this as something their representatives did good work on.

The truth of this bill, is that it does a few good things, a few bad things, but most certainly it adds a lot of complication and should have been rejected for something that is more specific and easy to understand. This bill has many hidden agendas that may not impact you and I, but others will benefit because they know how to work the system.

If we want change, which seems to be the message, it needs to start with legislation and calling out bills like this. The news and media agencies need to stop publishing what people want to here and simply lay out the facts, who is responsible, and how each party (individual, corporations, and federal) benefits. Let people make their own decision, hold the bill sponsors liable from good or crappy bills, and let people push for change when they see that every bill by their representative has some concession to some lobby group.