Should you Retire Overseas?

Many Americans are finding that their meager retirement savings and Social Security will go a lot further in countries like Panama or Costa Rica.

Retirement can be a difficult thing for many Americans. And this is a shame, too, as retirement should be the enjoyable part of life, after a long career of hard work. But many folks either did not save enough for retirement, or encountered setbacks on the road to retirement, or were forced to retire early. For them, retirement can be a nightmare of poverty and struggling to pay bills, find a place to live, and obtain medical care.

Many are finding that retiring to another country is one solution to this problem. The cost of living in many countries is far below that in the USA, and an income that is "living below the poverty line" here in the USA is considered well-off in most other places.

There are even websites, such as Retire to Costa Rica on Social Security, that can help you make this decision.

Should you do this? It depends. You have to be comfortable with living in a foreign country, where everyone speaks another language, and moreover you are viewed as a foreigner. Many people simply can't handle this. A friend of mine lived in Bermuda for a while, for business, and while he and his wife enjoyed it immensely, he reported that many of his co-workers got "homesick" after a few years. They were tired of being outsiders, no matter how nice the weather was.

And speaking of sick, while many of these overseas retirement destinations have free medical care, many also do not have the extensive high technology medical care we have in the US. Perhaps this is a good thing - you are going to die anyway, you might as well do it the old-fashioned way, as opposed to lying in a hospital bed, hooked up to machines, while they bill Medicare.

Also, conditions overseas require some cultural adjustment. Don't expect to find a local supermarket, fast-food chain, big-box stores, and all the "conveniences" of modern life in America. For some of us, this is a blessing. But for others, well, if you have to have TGI Fridays' potato skins, you may be out of luck.

Roads in some of these countries are challenging. In Costa Rica, driving 30 mph is considered break-neck speed, and bridges are often full of holes that would swallow a car.

Crime is another consideration. While many areas are quite safe, the larger cities can be dangerous places. And some entire countries can be too dangerous to live in, as you would be an attractive target for crime. In most Latin America countries, there is a huge divide between the very wealthy and the very poor, and this can be hard to adapt to. Many even moderately wealthy people live in walled compounds with barbed wire.

Like any other decision, you should not rush into anything too quickly. Visit the place first, check it out, and talk to others who have lived there for a few years. Better yet, talk to someone who moved back and ask them why it didn't work out. If their value system is similar to yours, chances are, you may struggle living there as well.

For other folks, the idea of living in a tropical paradise and being outside the norm of mainstream USA culture is ideal. Getting away from the "miracle mile" of car dealers, big-box stores, fast-food places, and all the come-ons and cons of modern living is seen as an advantage, not a hindrance. I would count myself in this category. Buying my food at a local tienda or dining on local cuisine at a family-run restaurant under a palapa is far better than shopping at Wal-Mart or eating at McDonald's. But others might think of such stores as unsanitary (by American perceptions, but American stores just look cleaner, and not necessarily are) and many folks are not adventurous enough to try the local ethnic cuisine ("too spicy!" they say, before they even try it!).

The other thing to bear in mind is that many of these places have already been "discovered" by Americans, and the choice real estate is being snapped up. The image of lying on the beach in sunny Costa Rica may be enticing, but the reality is, most of that land is spoken for, as it was bought up by Gringos for use as vacation homes over a decade ago. This is not to say bargains don't still exist, but that they are more likely to be off the beach or inland.

Offshore retirement, like medical tourism, is sure to increase over time, as the cost of living in the USA continues to increase and more and more people retire on less than they thought they would have. For many foreign countries, this influx of retirees can be a good source of income, as they would provide demand for jobs and services which in turn would help out the local economies. The influx of money from America, in terms of retirement savings and Social Security spending could end up being a major source of income for some of these countries.

But like anything else, retirement overseas has its disadvantages, too. I would strongly suggest "checking it out" thoroughly before diving in. While some people thrive in environments like this, others may founder. It all depends on not only your circumstances in life, but your sense of adventure and your tolerance for new things and new ideas.

Shopping Cell Phone Plans - Part Deux

Cell phones are a nice toy to have, and to some extent, necessary in today's society since the demise of the pay phone. But how much is too much to spend on cell phones?

Cell phone plans vary all over the map. No two carriers have the same exact plans, which makes it nearly impossible to cross-shop these plans. Worse yet, carriers have all sorts of different pricing schemes and often offer hidden deals to some customers, so you cannot figure out what is the "correct" amount to pay for cell service.

As I have noted in the past, the more complicated you can make any financial deal, the easier it is to rip off the customer. And the cell phone companies know that by making their billing as opaque as possible, they can tack on all sorts of charges and confuse the customer as much as possible.

So the "$49.95 plan" ends up costing you $69.99 a month, once fees and taxes are added in. For some reason, their billing software can easily calculate the monthly charges when you pay, but when you want a price quote, they can't tell you this.

And if you look online, you can see that you can spend upwards of $100 a month or more for a "family plan" with texting and other services. This is a staggering amount of money to spend - $1200 a year - but many people consider it worthwhile, as it allows them to communicate on a regular basis.

(Again, if you are making $100,000 a year, chances are, only about $10,000 of this is "disposable income", so $1200 represents a huge chunk of your disposable income).

So which plan is right for you - and what are the best deals? I wish I had a simple answer for this, as everyone's needs are different, different carriers have different signal strength in different areas, and there are all sorts of ancillary issues to consider.

Cramming down your cell carrier is never a bad idea. Like with credit card providers, when you threaten to leave, they suddenly want to be your friend and offer discounts. Last year, I moved from a nearly $100 a month plan to a $68 a month plan (taxes included) just by forcing the issue. Having been with AT&T for over a decade (I'm lazy) since before they were AT&T, before they were Cingular - back when they were AT&T (oddly enough), they wanted to keep my business. And I wanted to keep my phone number. So I switched to a 450 minute plan, with rollover minutes, and kept 2500 rollover minutes AND got a bonus 2500 rollover minutes as a loyalty incentive. Yes, they wanted to keep me that bad.

(And don't bother looking for that plan on their website, because it isn't there. It is a holdover from the Cingular days and only offered to former Cingular customers. Go figure).

But you can only go to the well so many times. I called today and they were like "Kindly please go fuck yourself" as they were not about to offer any more discounts, loyalty or not. I'm still racking up rollover minutes every month, but they are not about to offer me a 250 minute per month plan anytime soon.

My needs are unique - most everyone's are. I use my cell phone for business (yes, that is deductible, but you can't deduct your way to wealth) and they are also my main phone number, particularly in the summer. We have a local land-line on the island in the winter, so we use that more for calling then. Plus, we travel all over, so we need a plan with no roaming charges. I don't text, however, so I don't need a text plan (I have disabled this on my phones so I don't get charged for it). We need two phones, as one sits at home on a docking station, connected to our "land-line" phones. Make a call on my 1960's vintage desk phone at my house, and you are making a cell phone call. Ain't technology great?

So my plan, which provides more than enough minutes, no roaming charges, and also allows overseas calls at reasonable rates, seems to fit well. If only it were a little cheaper!

Other folks, with families, need phones for every member of the house. Yea, kids today need a cell phone. Heck, even the homeless need to have them (how else can you get a call-back on a job offer?). And the kids like to text, too, so you probably need that as well. Some carriers have "family plans" that provide four phones or more, and unlimited calling between family members. These are not cheap plans, to be sure, but they do provide a lot of services.

Of course many more folks want to make use of all these high tech data features of the 3G and 4G wireless systems and these fancy new phones - iPhone, Blackberry, Android, etc. If that is your bag, be prepared to pay for these services. Downloading data from the Internet to your phone may be the wave of the future, but already, the network is seeing stress from such usage and there is talk of limiting access or increasing rates for heavy users.

Others use phones less often and use e-mail more. They want a phone just for emergencies or the occasional connection with a friend. Pay-as-you-go plans work well for them, as there is no contract, monthly charge, and if you don't use the phone, there is no cost. These are good plans, in that they train you not to use the phone.

There are as many pay-as-you go plans as there are stars in the sky. Almost every convenience store or office supply store has the "tossable" phones for a few dollars, which are recharged with a "card". These can work great if you are travelling overseas, for example, and want to make calls. You put money on the card and pay by the minute. If you don't use your minutes, however, they "go away" after 30, 60, 90 or 120 days.

Verizon has a plan where you pay by the day - $1.99 per day, for example, with unlimited minutes, for that day. If you don't call for that day, you don't pay. Again, you "recharge" an account with money, and if you don't use that money during a certain period, you lose it. So if you pay $100 on such a phone, and don't use it, it goes away at the end of the year.

Straight Talk is getting a lot of talk as well. The AT&T "customer retention specialist" made it a point to run down this plan, which tells me it is scaring the pants off of them. You pay $39.99 a month for 1000 minutes, or $49.99 a month for unlimited minutes. No contract or commitment, and those prices are the total - no added hidden fees or taxes or whatever are added in later on.

One problem with all these "pay as you go" plans is that if you let the "gas tank" of minutes or dollars run out (In the industry, this is called a "gas tank" model of billing, BTW) you may lose your phone number. If the phone goes "dead" and you have not pre-paid for time or days or whatever, they reassign the number to someone else. For an emergency phone this is no big deal. For someone who needs to stay in contact with people or use a phone for business, it could be catastrophic.

One way around this is to setup automatic billing, so your phone is "recharged" automatically and the number does not go away. This requires a credit card number or an ACH debit to your checking account.

I think a disposable or pay-as-you-go plan makes sense for many people who don't use phones a lot. I hope to be one of these people someday! When I am retired, you can bet I won't be paying $68 a month for phone service (or its inflation adjusted equivalent).

Bundling is the new big thing, of course - AT&T would like me to have my landline, my Internet access, my cell phone and my cable TV (or satellite dish) all on one bill. The problem with this approach is that I don't watch television, so that part of the deal is out. Also, since I have a (703) area code on my phone (Northern Virginia) I would have to change my phone number to a Georgia exchange if I wanted to "bundle".

Many of the "bundling" offers are really conquest attempts. The offerors want you to change wireless services, go from cable to satellite (or vice-versa) or go from twisted pair copper POTS (Plain Old Telephone Service, another industry term) to Cable Telephone. So they offer bundled package deals to get you to switch.

But be careful, some of these bundled deals disappear after a year or so, and your ultimate bill may be higher - particularly if you end up signing up for extra services you don't need. Plus, the idea of one-stop shopping is kind of a fraud, as some of these "bundles" only bundle the billing, not the services, which may be offered by different branches of the company (that hate each other) or by 3rd party services.

For example, with AT&T, there is little or no continuity between the landline business (BellSouth) the Internet Service people, and AT&T wireless. They might as well be on separate planets. And they all say disparaging things about one another. Separate customer service numbers, separate repair crews, separate everything. It is not integrated. And since they don't offer cable, the best they can do in that regard is an affiliation with satellite dish company, that is just a come-on price and a combined bill.

If you really WANT all those services, then such a "bundle" might save a small bundle. But over time, the price may creep back up, once the introductory "teaser" rates go away.

Getting rid of services is one approach to saving money. Landlines are largely obsolete, unless you are using DSL, in which case you have to have one. But for others, an all-wireless solution saves a lot of money. A simple landline contract with unlimited long distance is about $50-$60 a month in most places (with all those mysterious taxes and fees added in). This is as much as a typical cell phone plan. Why pay for both, particularly if you have good cell service at your home?

Most young people today have only a cell phone, and when they get their first apartment, they don't even think to call the phone company. As a result, the disconnect rate in the landline business is on the rise, and for the first time in our history, the population of landline phones is actually decreasing.

A simple $79 docking station can recharge your cell phone AND connect it to your house phones (plug it into a wall jack and just make sure to disconnect from the network at the outside box). Now you can answer calls at home, without having to run for the cell phone. Cell phone amplifiers and antennas (about $100 to $300) can boost signal strength to a full five bars, even in poor reception areas.

So there are options for communications and ways to save money.

I'll keep researching this cell phone thing until I find the holy grail - the $29.99 per month plan that really costs $29.99 per month and doesn't zing you with overage charges or roaming fees or whatever.

Until then, I guess I'll stay put with the plan I have....

Note: Thanks to all who responded to my e-mail and explained their plans and terms to me. Turned out to be the best way to research this issue!

Alcohol, Revisited

Note: This is a cross-posting from my companion blog, Losing Weight Now!

A glass of wine with dinner is a fine thing, but alcohol, particularly in large quantities, is just empty calories.

If you have read this blog (brave soul!) you will note that a cocktail or glass of wine appears regularly in my diet - like on a daily basis. Alcohol, make no mistake about it, can be bad for your, both physically and emotionally, particularly over time and particularly if taken regularly.

How do you know if you are having a problem with alcohol? Well, if you are asking that question, it is one sign you might be having a problem. Even if you are not a raging alcoholic, it is possible that alcohol can negatively affect your health or life in general.

And the problem with alcohol use in this country is that there are three levels of it: Tee-totallers, usually of a religious bent, so-called "normal consumers", which can include a lot of people who are hurting themselves with booze, and finally, the "alcoholic" who attends 12-step programs and is a total washout in life.

And that is the interesting thing about alcohol use in America. The normative cues are skewed horribly wrong. You have three choices, essentially, to be (a) a religious crackpot who doesn't drink, (b) a broken-down drunk who tries not to drink, or (c) a cool, urbane hipster who enjoys a cocktail at 5 o'clock.

And the problem lies, to some extent, with Alcoholics Anonymous. This is an organization with the worst marketing plan ever known to mankind. According to AA, the only way anyone can give up drinking is to hit "rock bottom" and lose everything that is important to them in life - their spouse, their friends, their job, their home, their savings - and then "rebuild" themselves through the AA program.

I say this is bad marketing as this excludes a lot of people who maybe would like to give up drinking (or drink less) but haven't hit "rock bottom". If you tell people that alcoholism is characterized only by stumble-bums in the Bowery, then people who are alcoholics don't see themselves in the picture, until it is too late.

The second problem with AA is that it is, essentially, a religious cult. Yes, you heard that right. And a big part of the cult is the "rock bottom" concept. You see, in any cult or organization that tries to make-over people in their own image, a big part of the indoctrination, training, or "programming" is to crush the ego and then rebuild it. The military understands this and uses this technique in basic training. Classic religious cults use this, to crush the identity of the recruit, forcing them to sever all ties with their past life, only to rebuild a new identity in the cult.

AA's message is this: You have to hit rock bottom before you can quit drinking. You have to follow their program - and only their program, because nothing else works. You have to attend AA meetings for the rest of your life. Sounds a lot like a cult to me.

This is not to say the organization doesn't help a lot of people. The folks who truly ruin their lives through drinking and hit "rock bottom" can find help there. But I know a lot of functional alcoholics out there who haven't hit - and will never hit - "rock bottom" in their lives. They are financially successful and secure and happily married. They just like getting shitfaced all the time, which is not good for your liver or kidneys - or a whole host of other organs.

According to AA, these folks don't have an alcohol problem - since they have not hit "rock bottom" - although they likely could not stop drinking if they wanted to. And most of them don't consider their drinking to be a problem, although it may be readily apparent to others.

Doctors take a different view of alcohol consumption than AA. Continued regular use of alcohol can be problematic and bad for your health. You don't need to "hit rock bottom" in their view, to have an alcohol problem. If you have to have a drink every day, chances are, you have a problem with alcohol.

Here's a radical idea: How about quitting or moderating drinking before it becomes a problem in your life? Seems like a simple idea, but the AA folks say, "It can't be done!" I respectfully disagree. Many ordinary folks in this world control their levels of alcohol intake or quit drinking over time as a matter of choice or personal preference. The idea that alcohol use comes in two forms - abstinence and raging alcoholic - is rather simplistic.

And you can quit drinking or moderate your drinking, without having to hit rock bottom or attending meetings for the rest of your life.

As I have noted before in this and my companion blog, my parents were raging drunks, particularly my late Mother. Every evening, they would get into drunken shouting matches, which, to a child, can be shattering. My Brother and I would crouch down at the head of the stairs and listen, swearing to each other never, ever, to take up drinking - a promise that is quite easily broken during the adolescent years.

During college, I attended an Al-Anon meeting - an AA-type group for "children of alcoholics". It was interesting, to say the least, as it helped me understand a lot about the behavior of alcoholics. What is annoying about an alcoholic is not something you can pin down in 10 words or less, but it is annoying and distressful as all get out. And I met a lot of people there who had much worse problems than me.

One girl, nearly 30, was struggling with the issues of her alcoholic parents - while still living at home! "Move out of the house!" was what we all shouted. Be she was stuck in stasis, like a deer in the headlights, not realizing that the single best solution to her parent's drinking problem was to walk away from it and stop being an audience for their lives.

Another fellow at a meeting introduced himself as "Hi, my name is Jake, and I haven't had any heroin in six days now" (Narc-anon is down the hall, Jake!).

I realized then, that my problems with my parent's drinking were minor, and the best thing I could do was to move on with my own life, rather than to continue to be an audience for theirs. And so many children do this - into their 40's and 50's and beyond.

The other thing I learned, on the wise advice of a counselor there, was that while I could not control my parent's drinking, I could control my own. As a teenager, I would try to hide the car keys when Mother was drunk, or water down the Vodka (activities that ironically my Father would parrot later in life, as he became the sole audience for her life) in fruitless attempts to limit the madness. Of course, it didn't work, and family gatherings and even dinners would devolve into drunken shouting matches or crying jags.

But if I was sober during these events, I would have the wherewithal to realize what was going on and leave. So for nearly a decade, I gave up drinking entirely. And the results were pretty freaky. To begin with, my friends did not take to this kindly, and I realized that my friendship with them was based on little more than alcohol consumption. They would show up at my house late at night (while I was at work) and sit on my car and drink beer, leaving row upon row of empties across the hood. It was touching, sort of, but illustrated how friends can be a bad influence on your behavior.

My parent's reaction was no less startling. It was if I had renounced their religion or something. And they would constantly test me. "Are you sure you don't want a drink?" my Dad would say, "Just one tiny one?" Saying that to someone who has decided to stop drinking is like offering a steak to a Vegan. It's just wrong, period.

But giving up alcohol did allow me to focus my own energies better and move forward with my life - completing my Engineering and Law degrees and building up my career.

But the social pressures to drink do not abate. If you don't drink, you are viewed as crippled by many - either some sort of mental moron who is too stupid to be able to drink, or as some stumble-bum drunk who is ready to "fall off the wagon" any moment now.

In Japan, the pressure to drink was intense - as a part of business meetings. "We will drink and bond" one executive told me, and it was hard to say "no" to such overtures. Eventually, I went back to having the occasional beer, and as my life was pretty settled by that point (and I no longer had to deal with my parents), it did not seem like such a big deal.

But, as they say, God has other plans. Gout and diverticulitis both are affected by alcohol consumption - and not in a good way. Gout is usually caused by weak liver function, so drinking alcohol only makes it harder on your liver to process all the other junk your body has to deal with. After a night of partying, I can literally feel the results in terms of aches and pains in my joints and legs.

And many folks don't understand such pain, thinking they have "fibromayalgia" or some other made-up disease, when the reality is, it is just drinking that is causing them pain.

Cutting off empty calories like fast food, and HFCS soda-pop has cut my dietary intake considerably. But a large chunk of my caloric intake still remains empty calories in the form of alcohol. Alcohol, some say, can cause you to get fat, as the body immediately switches over to processing the alcohol (and eliminating it from your bloodstream) and thus lets other calories from your food process to sugar, and then fat. You stop "burning" fuel and start "burning" the alcohol. Regardless of the theory involved, it is the ultimate empty calories - something that you do not need to survive and thus just an addition to your daily caloric intake that does little for your own personal bottom line.

So, one goal moving forward will be to see if I can limit alcohol consumption. And I think there are two ways to approach this. First, not to make drinking a part of every day's activities - to take a day off from alcohol consumption. Second, to keep track of how much you drink, just as you keep track of calories. A glass of wine with dinner is fine. A half-bottle (or worse, a bottle) is not healthy and just leaves you feeling woozy later on. It is OK to re-cork a bottle and save the balance for the next day.

If we can limit alcohol consumption to about 100 calories a day, it would make a big dent in the overall caloric intake. The problem is, of course, we have company coming, and they do like to drink a wee bit...

Managing Credit Card Debt

Many, if not most Americans get into trouble with Credit Card debt at some point in their lives. How do you dig your way out of this insidious mess?

Credit Card debt is a lot like being overweight, as I have written before. Both are a result of over-consumption, and both can sneak up on you over time. Before you know it, you are 100 pounds overweight and tens of thousands of dollars in debt.

Both are also similar in that major corporate interests want you to over-consume and count on your moral weaknesses to get you to indulge in over-consumption. Simply stated, they make money by catering to your psychological weaknesses - the human tendency to want more, to want it now, and to not think about later consequences.

And both are similar in that it is not easy to lose weight or to pay off credit card debt. It takes time to get rid of that gut and that credit card balance, and it is hard work that involves sacrifice, discipline, and moral fortitude.

And both are similar in that there are thousands of snake-oil salesmen out there promising that you can lose weight quickly or cut your credit card debt in half, with no effort on your part. And of course, both are utter and outright lies.

This latter phenomenon deserves special mention first. While listening to the radio the other day, I was chagrined to hear an ad for one of those credit card debt outfits. The promised to "cut your credit card balance in half" under a "new program" (which was obviously designed to make it sound like a government program). Sounds too good to be true, right?

And if it sounds too good to be true - well, it is. These fraudulent "debt counseling services" get you to pay them a fee up-front, often in the thousands of dollars. They then tell you to stop making payments on your debts, and "escrow" the payments to them. They then "negotiate" with the credit card companies to reduce your debt - threatening your personal bankruptcy as a leverage with the credit card companies as a stick to get the debt re-negotiated.

Unfortunately, all that usually ends up happening is that you DO end up in bankruptcy, and are a little poorer for having send these people your money. And under the new bankruptcy laws, you can't discharge the debt as easily as before.

If you really are so far into debt that you cannot pay off your debts, then talk to a legitimate bankruptcy attorney (preferably not one that advertises on a lamp post) and then talk to several more. Bankruptcy is a serious business these days and not something you want to enter into through the back door, by way of a "credit repair agency".

So if these come-ons on the radio and TeeVee don't work, how do you pay off credit card debt? Well, the same way you lose weight - a little at a time. The deal is, you have to manage your credit card debt and have a plan to pay it off. If you fail to do this, you can end up in a lot of trouble in a real hurry - with interest rates so high on your cards that you may never be able to realistically pay off the debt. Those smiling people at the credit card companies are little more than the cousins of Louie "kneecap" Jones, the local loan-shark.

The first step to managing credit card debt is to not take it on in the first place. This means shredding those enticing offers that come in the mail and not using your cards. Of course, this is hard to do, as you are bombarded with offers, if you have a pulse and an address (pulse is optional, dead people get credit card offers all the time). If you get a truly low-interest offer in the mail, you might want to consider it, but we'll discus more of that later.

Most people who get deep into credit card debt don't do so over big-ticket items like flat-screen TV's or cars. Rather they nickel-and-dime themselves to death by "shopping" at stores for clothing, or eating out at restaurants. $50 here, $100 there, and pretty soon they are into debt up to their eyeballs, paying 2-3 times in interest over the original purchase. That $12 hamburger becomes a $25 one, when you put it on a credit card and pay it off over time.

Thus, not using the card is the other half of not taking on debt. Again, this can be hard to so, as our whole society is set up for the credit card swipe. Using a debit card is one alternative, and one that is more attractive as of late. Under the new banking laws, banks cannot charge you overdraft fees if your debit card is declined (no available balance). So you can use your debit card, and if you go "over your limit" not worry about bounce fees.

Of course, this is a bad way to balance your checkbook, and you should carefully monitor any bank account balance and keep track of all spending. The credit or debit card is evil in that it disassociates the spending of money from the brain. When you hand over cash, it is a transaction that you cognitively register in your brain, whereas the "swipe" of the credit card often doesn't register as spending for most people. Knowing your bank balance at all time (check this daily!) and how much you can spend are vitally important. If you can't keep up with this sort of thing, then consider going to an all-cash lifestyle.

Speaking of overdraft fees, the new banking laws make it illegal to charge over-limit fees on credit cards. If you go over your limit, the charges should be declined. Wily credit card companies have taken to calling customers and asking if they would like the "convenience" of being allowed to charge over their limit. What this means is, you go over your limit, they accept the charge, but sock you with a $25 fee. Just say "no" to such "friendly offers".

The second step to managing Credit Card debt is to track it. This means checking your balance on a weekly or even daily basis. You should know your statement date, payment due date, and interest rate on your card(s). You'd be surprised how many people have only a vague idea of these things, and then just shrug their shoulders when they get a letter from the credit card company telling them their interest rate has been jacked to 25%. In order to get out of Credit Card debt, you need to keep track of it, and chart it over time. I use a simple chart in Microsoft WORD, but you could use a piece of paper for this purpose. Each month, keep track of your Credit Card balances and overall debt and then plot it as a graph. It should be trending downward. If not, you need to take action. Put the chart in a prominent place in your home office so you see it every day. Awareness is the key to both weight loss and debt reduction.

Setup AutoPay to avoid rate jacking: A lot of the worst practices of rate jacking are a thing of the past now. But missing a payment can trigger a rate increase. So setup autopay to pay the minimum on your card every month, so they can't argue you are "late" on your payment. If you are one of those people who likes to say "I don't trust those newfangled computers or paying online!" just grow up, OK? The time for that sort of "dagnabbit"-ism has long since past. Relying on the US Mail to get your check there on time is far more dangerous than using the Internet to automatically debit your account.

And if you are not comfortable with using auto-pay because you are afraid of overdrawing your account, then you need to start working on your banking skills. Again, you should be checking your bank balance nearly every day (I do, you can too. The Internet makes this easy). The auto-pay amount will appear on your online credit card statement (which you check the day it is posted, again on the Internet) and you can enter the amount in your accounting software.

Now note that I am NOT SAYING to ONLY pay the minimum amount every month! Only that your auto-pay should at LEAST pay this amount to prevent a "late payment" scenario from occurring. You can and SHOULD pay an additional amount every month, if you want to attack the balance. And yes, if you go online to your Credit Card website, you can make payments, any time of day or night, any time of the month, electronically. It is not rocket science.

Payoff higher interest rate Cards first - get lower rates: Interest rates on credit cards these days can be as low as 5-6%, or about the rate of a mortgage. They can also be as high as 30%, or the rate a loan shark gives. These higher rates are so high that you realistically will never pay off the debt - at least not for a decade or more. Getting lower rates, and keeping them, is essential.

In this regard, sometimes - sometimes - you may get an offer in the mail which is worth considering. If you have bad credit, you will not get such offers, of course. And you can call credit card companies directly and ask them for cards, rather than waiting for offers in the mail.

I was able to obtain a card from Citibank at an attractive rate (5.99%). Capitol One also offered attractive rates (7.15%) as well. Other cards, such as Discover, are in the double-digits, and many of the "come on" offers, as well as airline miles cards, have rates over 20-25%. Just avoid these high-interest rate cards entirely. As I have noted before, the concept of "paying off the balance every month" is a high-wire act that can go horribly wrong the first month you can't pay off the balance (when you need that emergency plumbing repair, for example). And it is a high-wire act with no safety net. Free round-trip tickets to Duluth are not worth 5 years of high-interest debt.

Balance transfers can be used - in some cases - to get out from under high interest-rate debt. But these have to be used carefully. In many cases, they charge a 3% transfer fee, which adds on to the total debt. And make sure the "teaser" introductory rate doesn't morph into a staggering rate later on, or you'll end up poorer than you were before.

Home Equity Loans and Refinancing are tricky: One reason many people are in trouble today is that they paid off staggering credit card debts using home equity loans or by refinancing their homes. Many of the "come on" ads on the TeeVee and Radio are just pitches for home equity loans. While such a scheme can provide some relief for the borrower, bear in mind that you are refinancing your debt on 30-year terms now, and the overall interest paid will be higher.

Worse yet, most consumers, relieved of high monthly debt payments (now lower monthly debt payments due to longer amortization) will simply go out and rack up a new set of credit card debts.

In addition, home equity loans and refinancing offers often add thousands of dollars in fees and closing costs to your debt load. So while you may get temporary relief from monthly payments, you are literally mortgaging your future. The day of reckoning will still come - you've just put it off for a few years.

So how can you pay off this debt? Well, presuming you have a reasonable interest rate (less than 10%), it makes more sense to attack the debt head-on than to try to refinance it through a home equity loan or other dodge. If, like most Americans, you have multiple cards, figure out which have the highest interest rates and pay those down first.

Interest can make a big difference in how fast you can pay off debt, and paying off higher interest rate cards first is important. $10,000 in credit card debt on a 7% interest card may accumulate about $50 a month in interest. But at 15%, this rises to over $100. And at 25% to $250 or more. If you are paying $250 a month toward the debt, you will make progress at 7%, but will actually fall behind at 25%.

Some financial gurus preach paying off the lowest balance debts first, so you will see "progress" by clearing out a debt. But while this may provide psychological satisfaction, it really delays the ultimate payoff of your debt.

Not using the cards - ever, every, is the second key. This can be hard in our credit-card based society. For me, as a self-employed person, credit cards can be a convenient way of tiding yourself over until a slow-paying client pays me or if I need to pay a government fee on their behalf. But such a technique can be dangerous, as with the interest charges, you end up falling further and further behind.

Cutting spending is the key - and I have gone into detail in this blog of all the creative ways you can cut spending in your life and live just as well, if not in fact better. Paying $100 a month for Cable TeeVee while at the same time having a staggering Credit Card balance makes no sense at all. Bear in mind that $100 can put a real dent in your card debt over time. That's $1200 a year right there, and if you have a $10,000 balance, that additional amount will really accelerate the payoff.

Yes, it does take privation and sacrifice to pay down these debts. And this may mean not eating out as often, getting rid of toys and expensive hobbies, and other cuts in spending. But if you approach this properly, it can be a fun game and one that you CAN win.

And once your credit card debt is paid off, those savings will continue to be in place - and you will be wealthier than before. And that is an important goal to look forward to. Like dieting, there is a reward at the end of the process, if you stick to the plan and keep that reward in mind.

And like dieting, you have to make a life-long commitment to the process. There is little point in losing weight and then gaining it all back, just as there is little point in paying off your debts and then going back in debt again.

So how do you stay out of debt? Using debit cards instead of credit cards is one key. Spending money you HAVE, as opposed to borrowing every month, is a much better idea. Build up your savings so that when an emergency occurs (car repair, burst pipe), you don't have to go into credit card debt to cover the expense.

If you have to get a credit card, get one with a low interest rate and a low credit limit. Once you have good credit, such rates will be offered to you and are not hard to get. Banks compete to get good business, and they will fall all over you for your business, if you are not a deadbeat.

A simple card (not some airline-miles trickery) with a low rate (5-9%) is the best idea. Get one with a limit that you can realistically pay off every month ($1000 or so). Tell the card company not to automatically raise your limit, either. And if they do, politely decline the offer and insist on being put back on the lower limit.

And again, check the balance frequently and setup AutoPay so you don't get rate jacked. Such a card can be useful for sundry purchases or renting a car occasionally and other situations where you may need a credit card. And since you can go-online and pay down the balance in near-real-time, you don't have to worry about "going over the limit" if you need more credit.

The real solution to staying out of debt, however, is to be aware of how much you are spending. Just as in weight management, awareness is the key. If you don't weigh yourself on a daily basis and keep track of how many calories you intake, chances are, you will gain weight. If you keep track of your credit card balances and keep track of your spending, you likely will not go into dent (or further into debt) as you will see the warning signs and take corrective action.

Is any of this "easy"? Of course not. Our society is sick today, in that it is setup to entice people to succumb to their weaknesses - to their lowest instincts. We dangle out the shiny trinket, be it a jet ski, a flat-screen television, or just an attractive-looking meal at a chain restaurant ("where everyone is family!"tm) and entice you to spend on a credit card.

And it is a scheme that works, on a staggeringly huge basis. The vast majority of Americans are in debt, and an alarming number are in debt up to their eyeballs. 70% of Americans carry a balance on their credit cards every month. And I suspect that for most Americans, this balance is at a fairly high interest rate.

Paying interest is non-productive use of your money. Our debt society is based on the idea of constant borrowing. While this makes bankers rich, it does nothing for your own personal bottom line, and in fact, detracts from it.

And at some point in your life, you have to become debt-free. You might as well start now.

Is Psychiatry Bunk?

Dr. Sigmund Freud was a pioneer in the field of Psychiatry, although most of his theories have since been decried as bunk. Will we say the same things about today's practices in 20-30 years?

Psychology and Psychiatry are interesting fields, in that they both try to plumb the depths of the human mind, using the human mind itself. The concept of human beings trying to understand the workings of their own minds appears to me to be the most daunting task possible. The basic questions in life - What is existence? What is consciousness? What happens after we die? - have never really been fully answered by science and likely never will. Many have a belief in a religious answer, but as I have noted before, beliefs are based on blind acceptance of an answer, not analytical reasoning.

So in a way, these fields are almost set up for failure from the get-go, in my opinion, as the idea of a human mind understanding fully the workings of itself, is largely folly. It would be like a toaster understanding its own internal schematics.

This is not to say the fields are not without merit, only that they are attacking a problem that may not be solvable, at least in our lifetimes. To truly understand the workings and design of every aspect of the human brain would require more data than would fit into a human brain. In other words, it might not be do-able. You might be able to figure out some basic architecture and operations, but never truly understand things like "what is consciousness?"

And like any science, it evolves over time, so theories and practices of even a few decades ago are found to be obsolete or even horrifying today. Freudian dream theory has been dismissed by most modern practitioners as specious. And medical practices such as electroshock therapy and frontal lobotomies are viewed today on a par with medieval tortures.

What we were so sure of as "science" back then, turned out to be little more that guesswork - monkeys working on computers with hammers, finding that, on occasion, a good whack with a mallet seemed to do something. But it was hardly science, and more like cruel torture.

Even worse, things such as aversion therapy, which have been used up until very recently (I have met victims of this "therapy") were used to try to "cure" people of "maladies" by applying negative stimulus (electrical shocks) when exposed to "negative" images. For example, young men were supposedly "cured" of their homosexual tendencies this way - although the cure really never took.

And while it was trendy in the 1960's and 1970's to say you've been "seeing an analyst," today, the serious realities of mental health have made therapy less of a status item. The idea of talking problems to death never seemed to actually accomplish much, other than to generate billables for the Psychologists involved.

So what's wrong with Psychology and Psychiatry? The Scientology people certainly have an axe to grind with them - perhaps because they don't like the competition. In a way, many folks have made a quasi-religion out of mental health professionals, treating them much as we used to treat traditional clergy - as the confessor, counselor, and spiritual guide. As I have noted before, some folks make a hobby out of their mental health issues - which is probably not constructive.

The major problem with these fields, which probably stems from their medical backgrounds, is that the fundamental premise of mental health treatment is flawed. We use a Disease Model of mental health that tends to view people as either "normal" and "healthy" or as being "ill" or having a "malady" that requires a cure. While this may work for physical health, for mental health, the Disease Model is problematic.

The problem with the Disease Model, is that it uses social norms - cues if you will - to decide who is "normal" and who is "abnormal". And as social norms and cues can change over time, or in different circumstances, what is considered a Disease in the past may be considered the norm today.

Think about this - suppose your doctor suddenly decides that being riddled with cancer is not something you need to treat, but is a normal, healthy condition? You might be a little skeptical of the medical profession, if that was the case.

And yet in the field of mind-science, the "diseases" of the past are now considered "norms" today. Until about 1970, Psychologists considered homosexuality a form of mental illness. Today, it is considered a social norm. What has changed? Did they find the cure? No, rather, they decided the disease was actually a "norm" that did not need treatment. Now the same doctors are saying that fear of homosexuality is an illness. Do we believe them, or perhaps this is also part of the spectrum of the human condition?

And that's the rub. Probably every form of mental illness is actually a "norm" in one environment or another. And throughout history, people's behaviors and actions outside of the social norms are often what makes history - and may be survival skills for our species.

Joan of Arc? Probably schizophrenic, we think today - hearing voices, thinking she was talking to God, not to mention a martyr complex. Would the world have been better off if she was on Prozac or anti-psychotic medications? I have no answer, but it is an interesting question.

Bipolar disorder is another tough one. Many, if not most, of the great leaders throughout history had manic and depressive phases. Where would we be today if Winston Churchill decided to check himself into a sanitarium? (conversely, where would we be if Hitler had? It cuts both ways I guess).

I work with a lot of inventors, and they all tend to be this way. Can you imagine what the world would be like if Bill Lear or the aptly named Madman Muntz had been on tranquilizers? The world would be a sadder, grayer place.

Kinsey tried this approach - arguing that all human sexuality was basically "normal" in a Quantum sort of way. He was, of course, shouted down, and even the behavior of those shouting him down was probably a norm as well. For every Ying, there is a Yang.

Human behavior takes on all sorts of odd forms - and many of these forms may be survival skills in certain situations. If you ran down the street shooting at everyone you saw, they'd lock you up, under ordinary circumstances. But in wartime, they'd give you a medal. What is "abnormal" behavior in one set of contextual cues is normal in another. And switching between the two can cause undue stress.

Normative cues make all the difference. We tend to condemn German soldiers in World War II for claiming they were "just following orders." But in fact, they were, and under the same circumstances, under the pressure of the same normative cues, you and I would probably do the same. There is nothing inherently evil about Germans, it was just the societal norms that were created at the time.  And Psychological experiments have proven this to be true.  Put people in a position of authority over others, and then give them orders to do odious things, and they will do them.  Whether they are students in a experiment or soldiers of the Wehrmacht.

Now granted, these norms were created by people who are what we now refer to as sociopaths (a label, yes, but a convenient one). And sociopaths probably serve a survival instinct to the human race as well. Somewhere during our long history on this planet, one caveman probably realized that instead of struggling for food on a daily basis, it would make a lot more sense to just club his neighbor over the head and take their food and possessions as his own. The first sociopath? Perhaps. But he survived to reproduce, and that's the key.

His behavior became a new norm, and throughout history, people have exploited, used, and abused other human beings, and many, if not most of these people we refer to as "normal" or "successful businessmen".

If you take this idea further, it becomes clear that all human behavior, in one form or another, is probably an example of some "norm" in some context or another. If you take a Quantum Approach to human behavior, all human behavior could be considered "normal" but within a particular spectrum, with most behaviors falling within what we call "norms" while others at extreme outliers.

They key is to make the behavior fit the norm of society, to make it "acceptable" in the proper context. And that is where the field enters a slippery slope. By trying to get people to conform to a "norm", are we dictating norms, or enforcing societal norms? And who decides what is that norm? As we have seen in the past, this is a tricky problem, as merely assuming existing social norms are "healthy" is not really a good answer. What seems like outlier behavior in one era or context, becomes the norm in another. Trying to steer or direct norms may result in a less optimal outcome for society at large.

Today, pharmaceutical companies dominate the landscape in both the medical and mental health fields, and to some extent, they are directing societal norms in pursuit of profits. Answers to all of life's little problems can be found in a pill. Granted, there are some people who desperately need these medications - and are often the ones least likely to take them or the first to stop taking them. But increasingly, it seems to me, many folks are reaching for an answer in a pill that may not really help them, but merely anesthetize them.

My late Mother fell into this trap. She was a closeted Lesbian for most of her life - in an era where being a Lesbian was not a social norm. As a result of the disassociation between her own values and that of society at large (or at least as it was perceived) it made her a little crazy. At the time, the "solution" was "analysis" and tranquilizers. Neither worked. She traded an uncertain life outside of the social norms for a bottle of pills and an attempt to "fit in" with normative society. It didn't work, of course. She didn't fit it, was not accepted, and ended up a very unhappy alcoholic.

And at that time - in her era - there were women who had the courage to live outside of societal norms and rather than try to "fit in" told society to "take a hike" and lived their own lives. Granted, they had to be careful back then - you literally could be committed for such behavior. But it took a lot of courage to do that, and the pill approach, I think, tends to dampen courage and exchange a scary unknown for a soft, pillowy, but certain (an unhappy) existence.

And I suspect her story can be repeated a million times or more. People who feel they need to conform to societal pressures - from their parents, their school, their teachers, employers, friends, and even people they see on the street. And convinced they are "abnormal", abandon their own internal compass in exchange for an ersatz societal one.

And I doubt that approach ever works. Because no one really lives according to the norms of society. What you see on the TeeVee is basically all a fraud, a lie, an advertising man's nightmare. Trying to live that life will make you only broke, unhappy, and fat. And yet many people chase after that false God for most of their lives, simultaneously decrying anyone who fails to follow the norm as "weird" or "strange" or "crazy."

I suspect in 20-30 years we will look back at the mental health medical practices today and chuckle at our naivete over some things and recoil in horror over others, much as we do today when reviewing the practices of 30 years ago.

Placing blind faith in Science is never a good idea, as Science is not faith-based.