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Thursday, December 17, 2009

What you should buy for Christmas

Every year, we find ourselves drowning in a giant orgy of gift-giving. We buy and buy physical items that we give to our family and friends, hoping to see a big smile on their face and a warm embrace. For me, my weakness is children; I tend to want to buy them a present that makes them jump up and down with excitement.

What I’ve learned, though, is that it’s not usually the gift itself that they remember. Instead, what they remember is you at Christmas. Think back to your family Christmases. Do people who were exceptionally joyful stick out for you? They do for me, and seeing such joy was what made our large family Christmases memorable as a child. I don’t remember the people who were going through stressful events and were worried about paying for everything; I remember the ones who were happy, the ones who didn’t give the $250 electronic gift.

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The first Christmas gift you should buy this year (and every year) is peace of mind for yourself.

If you go to your family’s Christmas festivities with extra stress on your heart because you simply spent too much for Christmas, not only will you enjoy the holidays less, but your family will enjoy them less, too. Sure, someone might have that iPod they’ve been yearning for, but what will stick with their heart is the big hug and smile you gave to them, or the hour you spent playing with your nephew’s new football.

The road to holiday contentment is simple. First, take a third or a half (or even more) of your Christmas spending budget and put it in a high yield savings account For me, this would have been a solid chunk of change in years past, but this year my Christmas budget is already far smaller than in previous years.

Then do the rest of your Christmas shopping using your remaining budget. Maybe instead of buying someone an expensive book, you can buy them a copy of one of your favorite paperbacks instead. Maybe instead of a wonderful new sweater for your sister, you can give her a ring and offer to cap spending on each other, or just buy for each other’s children. Maybe, just maybe, you can make a few presents yourself, like homemade soaps or homemade ethnic foods.

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I argue that this is the best Christmas gift you can get for your loved ones – and for yourself. Why? As the holidays wear on, you’ll not have that sinking feeling of debt pulling at your ankles; instead, you’ll have money stowed away for a family emergency. As you sit around the Christmas tree with your family, you won’t have the underlying feeling of stress that you had in previous years; you’ll be happier and freer than before, and it will simply show in your personality.

If you still believe that this is Scrooge-ish, just do it for one year. Let the money sit in the account, then use it and do whatever you want next year for Christmas. You might just find that having that backup fund made things easier, lightened your spirit, and made for a very merry Christmas after all.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing Follow me on twitter

The Psyhology of Persuasion

Review of Influence: The Psychology of Persuasion (Collins Business Essentials)

Influence: The Psychology of Persuasion (Collins Business Essentials)


It's simple: if someone gives you something for free, you're more likely to think positively of them. You're also more likely to listen to what they have to say, simply because of human nature. Quite often, that's all a good salesman needs to make the sale. 

I'll use a great example from my own life. We shop at Sam's Club, and on Saturdays they often have a large number of free food samples that they give out. We'll often go grocery shopping on Saturdays and due to the samples, we're much more likely to make Sam's Club a stop on our trip. Once we're actually in the store – and then softened up a bit by the free samples – we're more likely to spend our money there.

The most effective way to avoid this type of persuasion is to simply decline free things that you don't actually need. Many people will argue that they'll just take the freebies and not actually buy anything, but to get that freebie, they often have to surround themselves by marketing and temptation. It's simply not an equation worth entering.

Commitment and Consistency
It's easy to say no the first time. It's easy to say no the second time. By the fifteenth time, though, the message has been pounded into your head and, not only that, on some level you respect the tenacity. You're much more open to buying the product.

This is why major brands often run advertisements that do nothing more than attract your attention to that brand – then run them over and over. Geico. Nike. Verizon. We see their ads so often that their message is pounded in our heads. Whether consciously or not, they become standards that we use for comparison simply because we know them and we know what they offer, thanks to the commitment and consistency of their message.

How can you avoid this type of persuasion? Minimize your channels of persuasion. Avoid commercial-sponsored television programming. Also, when you make purchases, do research in advance so that you know what the actual features of the product – and reviews of the product – are before you buy them. Read Consumer Reports and let that be your guide instead of pitchmen. It doesn't matter how many times you hear the pitch if you just stick to the data for your purchases.

Social Proof
Ever notice how ads often show a multitude of people using a product, usually successfully? That's because the persuasive tactic at work here is social proof – look, many others do it this way and they're seeing success, so you will, too!

Being Broke Sucks, in its own way, runs on this tactic. I'm the social proof. I write about the things that work in my life, and because they work in my life, you're more willing to try it. Thankfully, I'm not selling a product – I'm just encouraging people to get control of their financial life.

That's also why marketers will often use testimonials in ads because you can see that the product works for other people.

The best way to break through this is to remember that when you see someone in an advertisement for a product, they're paid to be there. They're not speaking the truth (or the full truth). 


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Sex sells. So does humor. Why? Because we like them.

When someone makes you laugh, you feel better and you're more receptive to what they're saying. When someone arouses you, you're much more susceptible to the suggestions that they make. Both of these things make us feel better and open us up.

What can you do to resist these things? Enjoy the emotional ride, but step back from the actual purchase. Learn to walk away, because walking away is the most powerful tool in your arsenal.

As I mentioned above, it's often useful to consult others when making purchasing choices. The problem here is that marketers are aware of the fact that we often consult experts – and they try to co-opt this as well. They hire experts to do their marketing. Having a doctor in your ad for medicine is helpful. Having a well-known doctor in your ad is even more helpful.

Another technique often used is the reference to recommendations and awards – "this car won the J.D. Power blah blah blah award," for example. This call to authority makes the claims of the ads seem more real – "see, this respected third party agrees with us."

The antidote is simple. Follow up on those claims. If a car won an award, check out that award. Check out the reputation of that award, Use more than one source – and find your own sources. 

"Get them before they're gone" is often a simple spur to convince people to take action quickly. Think of Black Friday and the hordes of people chasing sales that will disappear if you don't jump on board.

Scarcity is powerful. It calls to our fear of doing without. We might miss something of great value. We might miss a great opportunity. And we might wind up being one of the ones without.

Two antidotes really work here. First, surround yourself with people who don't care if they're doing without. Use peer pressure to your advantage to counteract the power of scarcity (and the "haves" and "have nots"). Second, find out for yourself if the opportunity really is scarce. Quite often, the "big sale" isn't really much of a sale at all – just ordinary prices with some very clever window dressing to push your "scarcity" button.

Is Influence: The Psychology of Persuasion Worth Reading?
If you have an interest (as I do) on how marketers (and others – including writers, I suppose) persuade you to certain ideas and also how to resist those tactics of persuasion, Influence: The Psychology of Persuasion is an utterly fascinating read. For me, it was one of the most enjoyable and thought-provoking books I've read this year.

To get real value out of this book, however, you have to invest in some introspection. Unlike many books that I review, it doesn't simply provide you with a checklist of things to do. Instead, it points you in directions for you to think about the decisions you make and lead you in better directions. Similarly, if you have a career in which you persuade people (like writing, for example), the ideas in this book can help sharpen your persuasive skills quite a bit.

If this sounds intriguing to you, pick Influence: The Psychology of Persuasion (Collins Business Essentials)
, without question. It's an excellent read and one of my favorite books I've read this year.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing Follow me on twitter 

Wednesday, December 16, 2009

Dealing with burnout

 Tips on dealing with burnout

1. Reconnect with your core work.
You were hired to perform a certain task, right? Get back to that task, which is often the part of your job that you love the most. Take a break from all of the extra stuff – the paperwork, the committees, the office politics – and just focus on the work that you enjoy.

You might have to get a bit of buy-in from your boss on this, but most bosses will be receptive. After all, you're requesting to focus on the task that they hired you for.

2. Plan for the next step.
If you were to quit, what would you do? Develop a detailed plan for doing this. On one level, it might just be escapism to help you deal with a rough patch. On another level, you might be putting together the blueprint for a powerful life goal for yourself.

Make the plan as detailed as possible, then start taking action on those little details. Actually moving forward on such a goal can bring it to life in a very powerful and life-affirming way.

3. Build new relationships.
If you're feeling burnt out with the circle of people you work with (and office politics in general), reconsider the group you're associating with. Look for new people in your office – and outside your office – to adopt into your inner professional circle.

New people offer new insights. They offer new opportunities and connections and ideas. More than anything, though, they offer new attitudes and new perspectives, which might be exactly what you need right now.

4. Share your gifts.
Open up a Twitter account. Start a blog. Link to interesting things that you've discovered. When you're on Twitter, follow and converse with people in your field. On your blog, link to articles by people in your field that you find interesting.

Most importantly, share the things that you know. Over a long period of time, with consistent activity, a thoughtful blog becomes a powerful resume in and of itself. Never mind the fact that it's also a potential way to earn some money, too.

5. Learn something new.
Jobs can sometimes become frustrating because you're stuck in an intellectual loop, doing the same thing over and over again. Many jobs can change radically if you take the time to learn new ways of doing things.

Look for opportunities to expand your education. Take some classes. Read some books. Focus on learning some new techniques. They'll breathe new life into your current job and open the door to better ones.

6. Talk with your supervisor.
This works particularly well if you're a longstanding productive employee, because a supervisor will actually pay attention to what you have to say. If you're chronically underproductive, this is a bad route to take.

Just have a meeting with your supervisor and lay your concerns on the table. Ask for some help in coming up with a plan to solve those concerns. Your supervisor may be able to handle some of them and offer solid advice on how to handle other aspects.

7. Build an emergency fund.
Sometimes, the pain of a job comes from a sense that you're completely tied to it financially: that without the job, you can't possibly survive financially. Take a hard look at how you spend money. How much of that spending is really necessary and life-fulfilling?

Learn some frugality. Cut down on your needless overspending. Start socking away some of your money. Build up a cushion – and don't give into the temptation to spend it just as you start building it. Quite often, the long-term presence of a healthy emergency fund can make life seem a lot more tolerable.

8. Build an exit strategy.
If none of these tactics work, it might actually be time to leave – and leave soon. Polish up your resume and get in touch with the people you know in your field. Seek out that next position so that when you make the leap, you leap into someplace safe

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing Follow me on twitter 

Thursday, December 10, 2009

Tips that Every Musician Should Apply to Their Career


As the holiday season approaches, and we get in to that thing about good will to all, all those other quips about being better people for a moment—which personally, I think should go throughout the whole year and not just the shopping season (sorry, holiday season), I wanted to put out a quick rant (speaking of Good Will) that I'll call Ten Tips that Every Musician Should Apply to Their Career. These apply to both the music and business sides of the equation. Many apply to those who are not musicians but work in the music business.
Hell, a few apply to anyone working in any business. So, New title: Ten Tips for Everyone Alive on the Planet.

Number 1. – Answer your emails.

Show a little respect and answer your emails. If you can't respond at that moment, then acknowledge that you received it, let the sender know you're backed up and when you hope to get back to them. Then, either list the emails as unread, flag it, or mark a little notch in your calendar to respond to the sender when you promised. This is one of my biggest pet peeves. I respond to every email. Sometimes it takes a while, but I get back to everyone I can that has a direct question or is requesting something. It is a common courtesy that I am sure you would want when you send out an email, so do the same.

101 Distribution - We Are Music Distribution.

Number 2. - Have the guts to address concerns or questions.

Kind of attached to number one, if you have a concern or a question brought to you and you are not sure how to respond or are afraid to give a solid answer, toughen up! If you need to say no, then say no. If you want to say "Maybe, but there is an issue I need cleared up before we proceed," then say that. But the passive-aggressive non-responses, the runaround when people just delete an email, toss away a phone message, or avoid a confrontation is much more insulting than a flat out "No way."

And you do not want to be insulting people, even if at this particular moment in time, they are asking for something and you are in the position to say yes or no. Things change (see below). Things always change. Next time, it may well be you doing the asking. A polite, respectful "I can't do that" or "I am not interested" goes a long way to making that later approach easier.

Show some honor and address questions, concerns, or issues without shoving them in a drawer and hoping they'll go away. They never do.


Number 3. – If things change, then keep everyone informed and problem solve.

Things change. They change all the time. From a club burning down and a gig being cancelled to a deadline being changed or a payment being missed. It happens, and it happens all the time. The problem is that when things change, many people are affected. Too often, discomfort over the situation leads people to delay notifying everyone who will be affected. Nobody likes delivering bad news—nobody is happy there is bad news to deliver. But other parties still need to know.

If you are supposed to pay someone by a certain date, and something comes up where you can't do it, TELL THEM! It may mean they will now be unable to pay someone else by a given date, and that is important information for them to have.

I have no problem with someone saying they can't make a payment when it comes to my production fees or consulting fees. In this economy, it is almost a given that out of so many clients, something will happen to someone at some point. As long as they come to me and say "this isn't happening like I thought it was going to, I am not going to be able to make that payment on the date we agreed on, but here is what I am going to do about it…" how can I complain? They are acting with honor, treating me with respect, and in many cases, backing it up with a partial payment that lets me know they take the situation seriously. That is a person I want to go on working with. In showing me respect, they just won my respect—and that's an artist I want to do business with.

Take the initiative to make others aware when situations change—whatever the change is. If your drummer is in three bands and has a sudden conflict, share that information asap. Right now everyone has more options than they will two weeks from now. Be the communicator, the problem solver, the responsible adult, and in 6 months no one will remember what the bad news/stumbling block was, they will just remember who rose to the occasion, who was considerate of other people's situations, and who must have left their phone off the hook that week.

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Number 4. - Be on time or give a heads up.

Just like things change, things can come up that make you late to a gig, to a session, to a meeting. Still, with practically everyone having a cell phone, it seems crazy that someone who is running late cannot make contact with those who are waiting for them.

Once again, it comes down to honor and professionalism. If you are scheduled to be somewhere or simply said you were going to be somewhere, then be there. It comes down to a simple awareness of and respect for other people. As soon as you know you are going to be late, give a call, send a text. "Running late" and your new ETA. It's easy and it will show you in a very professional light.

Number 5. - Stop f*%^ng over posting on Facebook and other network sites.

Stop with the stupid posts that no one cares about. Yes, maybe some larger scale stars can post, twitter and update about eating a Twinkie, but a fair amount of them have the fame and the celebrity status that draws people's interest. For the rest of us, the technical name for that kind of post is "pointless crap." Use quality, not quantity with your posts. While you think that all these people are reading everything you are putting up on Facebook, consider how many people have you as hidden just so they don't have to read that stuff.

Separate your personal page from the music ones. On a music page, put up the info that will draw people to your links, your pictures, and your posts. If you are using it for a personal page, then by all means, do as you wish. But if you are trying to connect with other artists and fans, if you are trying to network and utilize the social networks as one more avenue to move yourself forward, then it is a professional tool, treat it professionally. 

Get away from the mafia wars, the farmer games, and anything that makes your page like a series of graffiti advertisements. As a musician, give them something that will draw them in as well as make them want more instead of giving them way too much information.


This stuff is basic and yet often ignored. Try professionalism, open communication, attention to detail, and give consideration and respect to those you are working with. It can go a long way for you and your career.

Wednesday, December 2, 2009

TechN9ne’s Success leads to 11 million dollars

  101 Distribution - We Are Music Distribution.

Check out the Billboard , July 4, 2009 issue.

The interesting thing is that there's really nothing that groundbreaking at all in Tech N9ne's operation. It's Business 101. Only in the fantasy land that is the entertainment industry could the ideas of "every dollar invested needs to make two dollars" and "everything is driven from the fan's point of view" be considered innovative. In fact, the beauty of TechN9ne's operation is that it's rooted in the basic ethos of hard work and common sense. And most importantly, they actually execute it.

In general, Strange Music, which is the company controlled by Tech N9ne and his business partner Travis O'Guin, is the model of a 360 entertainment venture, which is housed in a 18,000 square foot facility in Kansas City, and includes a label, publishing, merchandising, booking and touring business. All of it is built upon the music and touring that have made Tech N9ne one of the least exposed, but most profitable rappers. The Billboard article revealed that in 2008, Strange Music earned more than $11 million dollars.

How does he do it? Touring is certainly the cornerstone– he does more than 200 dates a year. Just the way the textbook outline says it should, the touring drives the record sales– which are significant, with over 1 million sold on 2008's "Killer". Then there's the merch, the licensing, and the publishing on top of all that. Sure– it's impressive. But not exactly something that's never been done before. By now, most of the independent artists out there are probably asking themselves "What has he got that I don't?" Here are four things that Tech N9ne has learned, that many artist/entrepreneurs have not:

1. Patience

This is not a fast road to success. The journey of a successful independent artist is a very long and winding one. Tech N9ne survived two major label deals, numerous failed independent ventures and abandoned business partners. Not many businesses get their plan right on the first try. You have to be willing to come back again and again, learn from failure, reinvent the model and keep moving forward. Tech N9ne is 37 years old, and just hitting the prime of his career. Pretty unusual for a rapper.

2. The Ability to Get Reactions

As a self-described "weird rock alternative warlock with crazy hair, a painted face, who raps backwards", Tech N9ne makes a strong impression– and that's something you can build a business on. You can not build an independent business on music, performances or artist identities that are passive– to which audiences have no great emotional reaction, either positive or negative. There are thousands of bands that play 200 anonymous dates a year, and have for twenty years. And every night, the audience applauds politely, and immediately forgets about them. The only way the indie model works is when the music and imaging are so dynamic, or at least so perfectly in tune with a very particular audience ("jam bands" being a good example), that they inspire a passionate response. If you're playing 200 dates a year, but your Myspace site has 200 friends and you're selling 1000 records, you're not reactive.

3. A Place To Call Home

Tech N9ne's success is strongly rooted in his core market within the Midwest. Very wisely, he built his following in a place where the competition was less challenging, and where he could get a foothold in the larger marketplace. His strength in one part of the country allowed him to bring a success story to other, more difficult markets. Too many artists think that being outside of a major market means they need to relocate. In fact, that small local market may be the best asset they have, provided that they are able to build a strong core audience there. Likewise, too many major labels spend a fortune in promotion costs trying to take an unknown artist and break him or her nationally, in every territory at once. Find one region that works, and then spread it out slowly.

4. An Ability to Control Costs

The other advantage to basing a business in a place like Kansas City is that the costs are a fraction of what they would be in a major market. Eleven million dollars a year in earnings is very impressive, but it doesn't pay for the Universal Music office in midtown Manhattan. One of the major problems of the music industry is not that lack of earnings, but the fact that the costs are outrageously, and unnecessarily high. There is no inherent need for major labels to be housed in the center of the most expensive cities in the world. But that's where they are, and consequently, they find it almost impossible to make money.

In the same way, many independent artists are seduced by the idea of trying to give the impression of power and success, and wind up wasting allot of money on unnecessary offices, too many employees, or inflated production costs. Tech N9ne's business runs on inexpensive office space, interns, street team promotion, and careful control of the finances. If the music is reactive and you're building on a solid local following, there shouldn't be a need for huge expenditures. All it takes is patience and follow-through.

The growing DYI approach to the music industry is not for everyone. Many artists try it, only to find that it's more work than they ever thought or that they simply don't have any of the skills they need to run their own business. Without a doubt, it is extremely labor intensive, challenging, slow and decidedly lacking in show biz glamor.

But it's not a mystery. There's no secret method that Tech N9ne used to build a successful business. It all comes down to making smart decisions instead of self-indulgent ones, caring for the customer rather than the corporation, and pulling in fans, one by one, show by show, every time you play. "We're Wal-Mart", Tech N9ne has been quoted as saying. "There's no Warner Bros., Def Jam or Sony in the Midwest, so we had to build our own." Good thing he did.

Tuesday, December 1, 2009

Making Money As An Artist In The Music Business

Artists need to focus on the tools to make money and stop wasting their time running around the Internet like chickens with their heads cut off getting nowhere but frustrated. Here's what you do, assuming that people other than your mother love your songs and you have a solid, hopefully exciting, live performance:

101 Distribution - We Are Music Distribution.

1. From what I can see, Facebook appears to be the best place to work on building a fan base, with MySpace a fairly close second. Don't just talk to fans, talk to other bands on FB and MS and offer to swap gigs or open for free for them. Check out the gig swapping sites and get on board. The more you play live the more you can sell merchandise and get booked.

2. MySpace is necessary only because the world knows they can find you and your music there. Don't waste any time friending people. Check your MySpace internal messages in case a fan wants to make a real connection. Message them back ASAP and get their contact info and put it into your artist data base immediately. They are a "true" fan. My partner and I designed a MySpace page geared to making money. Conceptually, it can work as a template for any artist profile you have. It's simple, direct and has a seamless user interface. Email me at and I will send a copy of the comp to anybody who wants one.


3. Use Bandcamp to post and sell your music but do so in conjunction with either Tunecore or Reverbnation's music distribution platforms. Make sure your music is for sale everywhere it can be so anybody can buy it at any time. Sell individual cuts. Sell albums if you think that's the solution for you. Bundles songs with merchandise, photos, videos or tickets to your shows. Get creative and make products that speak to your fans and make them BUY, BUY, BUY !!!

                                                                                                                                                  4. Design cool merchandise and have it readily available for sale. It should be front and center wherever you have a web presence. Maybe people won't buy your music but love the fashion sense of your merch and will buy that. Come up with a gimmicky but cool tag line and work it into a fashionable female appeal design. Women control most of the money spent in the music space. Don't be stupid, cater to their needs and interests. If you really want to make money, produce your own merchandise. It will be way cheaper than using one off services. You have to spend money to make money, NEVER FORGET THIS. 5. Use the user generated music booking widget found at Reverbnation. You can put it anywhere and anybody can book you anytime they want. Check out its default calendaring system from which you can be directly booked. Whenever you play live tell your fans that they can book you easily on Reverbnation. Wherever you promote yourselves, promote where people can book you, buy your music and buy your merchandise. Sell advance tickets to your own gigs. Ask your clubs to give you a commission for every advance ticket you sell. It truly amazes me how artists don't concentrate on aggressively promoting themselves to their fans for bookings. Everyone wants an agent and dates in the best clubs in their region. This is pie in the sky thinking. All it takes is one fan who loves you with some cash and you can be booked at a house party, private concert or any cool event that a fan can think up. Besides a fan will ALWAYS pay you more than any club or venue will. Don't waste your time sending EPK's to every club on the planet. They already know who they want to book or who they will listen to about new artists to book. Here is the place where you want to build personal relationships. These relationships will eventually turn into gigs and more cash. SomaliaQuantcast 6. Set up an ArtistData profile immediately. If you insist upon maintaining a billion profiles, any change you make to your ArtistData profile will be also be changed on every profile or event calendar you have on the Web. 7. If you really want to see what people who are really into music think about your music get involved in the process on 8. Ask people to donate money to you for lots of reasons. At gigs have a tip jar and if the gig went well personally walk around and ask for donations. Need money for your next recording, raise it on or Make up special songs for special occasions for husbands, wives and lovers. Give away exclusive content to get your fans more engaged. But whatever your do, whenever you give something away to your fans ALWAYS get their email address and any other contact information they are willing to give to you. Ask and ye shall receive. Information is power and money. 9. You can easily see that all of the above suggestions are focused on making money for you as an artist. Your level of success is directly correlated to the amount of work you put into your business. Work smart so when you work hard it really pays off. Wherever you happen to be on the planet always remember you are an ambassador of goodwill for yourself as an artist. Serve your fans and your customers well. Address them by name. Show them you care and they will show you their cash. NEVER MISS AN OPPORTUNITY FOR A SALE !!!!! Don't drive your fans crazy with pointless emails. Don't message them to death about your gigs. Think about how you like to be treated when you are someone's customer and that's how you should treat your fans. The GOLDEN RULE has never failed anyone who's used it. Read "The Secret" and Seth Godin's blog. Now is the time to stop screwing around and wasting your time on things that won't make you money. Never let yourself be fooled that selling yourself as an artist is not where it's at. Without earning a living your art can never be sustained. People who trade their passion for dollars survive and grow as artists. Those who don't starve to death. Focus, think, work hard and smart and grow rich. Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing Follow me on twitter

Paying the minimum due!

Get rid of that Bo Flex and get rid of credit card debt now!!

There's only one tragedy greater than standing in your driveway at 6 a.m. on a Saturday, selling your BoFlex for $8 to an early-bird bargain hunter -- and that's to still be making credit card payments on it afterward.

That's exactly what will happen if you pay by the guidelines put forth by your purveyor of plastic, otherwise known as "Paying the Minimum Amount Due."

Rule No. 1: Always pay more than the minimum amount required. A lot more.
We Fools don't pay according to the lending industry's standard rules. Revolving credit cards (unlike charge cards from American Express, which require you to pay the full balance each month) require minimum payments as low as 1.5% to 2.5% of your outstanding balance each month -- a calculation cleverly designed to prevent you from paying off your balance before your grandkids' grandkids celebrate their graduations.
Seriously -- if you pay by your lenders' rules, it'll take you 44 years and one month to pay down a balance of $4,500, even if you don't put another penny on the card once you reach that limit.
And how much will that $4,500 of CDs and weight-loss programs end up costing? About $17,000. If that doesn't make you drop 20 pounds, we don't know what will.

Rule No. 2: Keep your eye on the interest rate.
How come it's possible to pay off a mortgage during your lifetime, but your credit card balance can last well into the next century?
The way interest rates are calculated in the credit card business is different from those that lenders use on the mortgage side of the business. Mortgage loans are amortized over a fixed term -- say, 15 or 30 years. The term's interest rate and balance are used to calculate a fixed payment that results in the balance being paid to zero after the specified number of payments.

Credit card issuers, on the other hand, use a baffling, complex system of pulleys, ball bearings, mirrors, and Boolean algebra to calculate your finance charge. In the end, most come up with a figure somewhere between 0% and 32%.

OK, we'll get serious for a moment. Credit card debt is open-ended -- meaning there's no fixed term. Determining the terms of your loan is a numbers game for the industry. Looking at the population as a whole, the lenders set your minimum payment based on what makes them feel comfortable that you can handle the debt and won't default on your loan. Obviously, some borrowers will be unable to pay back their loans. And guess who pays for the deadbeats? That's right -- you. Credit card issuers set the rates higher for everyone so they can cover expected losses.

Mortgage Refinance?

The interest rate is the Rosetta Stone for those trying to pay down a balance. Watch it closely. Some banks charge a "fixed" annual percentage rate, while others charge a "variable" APR, which is tied to an index, such as the prime rate. The Schumer Box, which must legally be included on every credit card solicitation, contains all of a card's vitals. If you can't figure out your card's APR by looking at your monthly statement, call the customer service number for a translation.

Rule No. 3: Pay down your credit card debt before you invest.
Bar none, the best financial decision you can make is to pay down your debt -- before you even start investing. Ask your kid, your niece, or the crumbsnatching child behind you in line at the grocery store, "Which sounds better -- losing 18% of your cash a year, or making 12% on every buck you sock away?" Go ahead. I'll wait.

In fact, while we're waiting, we'll do the math for you. Take an investor who comes into a sudden $3,000 windfall. Although Jane Investor has $3,000 in debt, she's heard about the great returns she can get in the stock market -- well, at least the returns that folks got a few years ago. If an average year on the stock market pushes her holdings up 12% (we're being extremely generous here), can she beat the 18% growth rate on her debt? Nope.

Credit Card
At Launch
Year 1
Year 5
Year 10
A decade later, her debt has grown to more than $15,000, and her investments have grown to more than $9,000. Though she started with enough money to eliminate the debt, she's now in the hole by more than $6,000 -- until she sells those stocks. Then she'll have to pay some of the profit back to the government in capital gains taxes. So she's actually out even more.

Rule No. 4: Make every point matter.
In this instance, we think the numbers speak louder than any lavish prose we could compose. So here, in all of its glory, are the gory details of what it will take to pay down eight grand at four different interest rates, if you pay just the minimum balance each month.

Starting Balance
Interest Rate
Time to Pay Off
Total Interest Paid
30 years
20 years, 1 month
18 years, 2 months
16 years, 1 month
Calculations based on making minimum monthly payments of 2.5% of the balance.
Just to state the obvious (Mr. Dangerfield  occasionally do that, you know), it appears that the interest rate plays a somewhat significant role in your debt load. If you currently carry a balance, it behooves you to make sure you're paying as little interest as possible. In fact, the first place we suggest you look for a lower rate is right in your wallet. It's not always necessary to go to a new issuer to get the most competitive interest rate. Read on for ways to work out a sweet deal with your current lender.

Rule No. 5: Ask for a lower rate. Really, just ask.
If your current lender is charging you more than 12% interest, it's time to renegotiate, Fool. Persuade your lender to lower your interest rate.

Hundreds of people (Really! I've counted!) have used this tactic to get points knocked off their interest rates, win years of freedom from repayments, and save countless dollars in interest payments. According to a survey conducted by the U.S. Public Interest Research Group, more than half of the study's participants who called their credit card company were successful in reducing their annual interest rates by an average of one-third.

And what a difference one phone call can make: Jessica Simpson (name changed to protect the innocent), one of the 50 consumers who participated in the survey, was able to cut her APR almost in half, from 15.9% to 8.65%. Working with a balance of $4,474 and making the minimum payments of 2%, Simpson saved herself $324 in just the first year and $5,031 over the life of the debt. Because of her lower APR, she will also pay off her debt almost 10 years earlier.

Why does this tactic work? One reason is that the lending industry is filled with competition. The market is saturated with credit card offers, as you might have noticed. Your lender would rather keep you as a paying customer -- albeit at a lower interest rate -- than shell out anywhere from $50 to $150 to acquire a new customer.

Use your leverage and get your lender to lower your interest rate -- and waive a few fees, while you're at it.
This tactic works best for those with decent credit ratings, a history with their current credit card company, a low unpaid balance compared to their credit limit, and no late payments in the past year. Still, even if you have a few blemishes on your record, it's clearly worth a try.

If they won't play ball -- even after a few minutes of hearing you sobbing into the receiver -- it's time to move on and find a better offer. But again, read the rule book before you tread into teaser-rate territory.
In matters of credit management, it nearly always pays to pull out all the stops and set your own rules.

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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