Saw something 2 days ago that Walmart was expanding its financial services in stores and was worried that they may encroach on ezpw pay day. I understand that the banks have successfully killed Walmart becoming a bank but can they do some payday type products? They claimed to be targeting the customers not currently served by the banks. Sorry I don't have a link. Could this be the cause of the recent downdraft?
There is nothing wrong with splurging on occasion. Life should be enjoyed. Those with larger incomes can more easily splurge than those with more meager salaries. However, I've seen stories of actors and athletes who eventually went bust not because of their incomes but because of their spending habits.
"One other thing I find amusing is when people assume that if you have money you know what to do with it."
As HL Mencken said "No one in this world has ever lost money by underestimating the intelligence of the great masses of the plain people."
And that suggests a very sound path for investing in things like MO, LVS, BUD, BYD, AEA etc
"I have met more people that make 100k+/year that are working pay check to pay check and literally own NOTHING as they are on long payment plans for everything they "own""
Thus they get caught short, and its off the PDL shop to get help.
Anyone with an ounce of common sense about personal finance, just doesn't get into these situations. They save and they don't fritter.
The core customer for this sector is people who don't manage their personal finances. Denial is not just river in egypt.
"Indeed, if we are to define "Stupid" from its traditional roots, we would discover it literally means 'intellectually lazy". Thus, it would appear that the only "stupid" person here is, in fact, Divi." Well said. I believe the word for Divi is ignorant, not stupid.
One other thing I find amusing is when people assume that if you have money you know what to do with it.
I have met more people that make 100k+/year that are working pay check to pay check and literally own NOTHING as they are on long payment plans for everything they "own". Some of them aren't even putting anything into their 401(k)s (passing on free money...now that's dumb). One guy dropped his health insurance and life insurance so he could pay for an expensive vehicle he can't really afford...
My neighbors spend their money on BMW's, Covettes, in ground salt water pools, boats, motorcycles/toys for their 5 year olds, nannies, etc... Meanwhile they are barely getting by, never see their kids and have nothing saved for retirement.
Just because you earn a lot of money doesn't mean you know what to do with it. They screw up their financials just as much if not more. Only difference is they are able to hide it better with home equity loans and large CC debt...
A co-worker explained to me the other day how smart he is with money. "I took out a loan against my 401(k) to buy a new Harley. The best thing is, the interest of the loan I pay back to myself! Pretty sweet deal eh!?"
oh and EZPW is still cheap.
"The greatest danger to the PDL industry would be a nationally required high school course in personal finance."
Exactly, and for people to remain ignorant about such an important and central part of adult life is stupid.
A good education in personal health and probability would also help reduce other similarly self inflicted costs such as obesity, smoking, and gambling.
And that is the last I am going to say about this topic.
Sorry on that earlier post by gina11gian -- that was me, but my babysitter had logged in.
The common misperception which Divi falsely perpetuates is that users of alternative financial products are "stupid". In point of fact, and the demographic analysis of clientele has borne this out repeatedly, they are not. Most have college educations. Most have, in fact, performed a cost-benefit analysis of a PDL product versus other options. NSF charges are one comparison, but so is the humiliation of having to borrow from friend, family, or employer.
Yes, some people do not do a cost comparison, or examine the pitfalls of being unable to repay the debt on time. But this segmentation exists in all forms of the retail populace. It is equivalent to the person who walks into one car dealership and buys at the sticker price, or someone who walks into Best Buy for a television without doing an online search for a better deal first.
There is also an issue of time and convenience regarding check cashing. One thing that ACE has over Walmart is that they specialize in check cashing. You get in, you get out. That has value. It is worth paying for that, rather than stand in a line at Walmart to receive inferior customer service. To call someone "stupid" for that behavior would to discount the many years of success ACE has had (not to mention the very real concept of convenience as having a monetary value).
Finally, there is a distinction to be made between people who fall into the 20% category, as Benarata pointed out, and those who are not educated in fiscal responsibility and personal finance. The greatest danger to the PDL industry would be a nationally required high school course in personal finance. Using a PDL product does not make stupid, but it MAY suggest a lack of proper personal finance education.
Indeed, if we are to define "Stupid" from its traditional roots, we would discover it literally means 'intellectually lazy". Thus, it would appear that the only "stupid" person here is, in fact, Divi.
Ben--don't worry about the spelling, it was the message that counted and it couldn't have been said any better. Here at my shop, with the building trades being slow, my best repeat customers are not idiots and are not the result of frittering away money. I have a small group of construction sub-contractors who have to make payroll every Friday regardless of whether or not they have been paid for the job so they will come to me rather than try to explain to the bank who finances their trucks etc. that they need 5to 10 grand to keep afloat until their draw is paid by the general contractor on the job. If they pay me before the 30 day pawn is up, I don't charge the full jolt, but pro-rate it for the time period. Sometimes I will be paid off by the next week and we negotiate something fair, but less than the full pawn. These guys are an important part of my business and send me lots of customers. I know you too must have some of these kinds of borrowers and I am happy to be there for them Friday evening when they really need me. I have had several who have gone on to be very successful and still come to the shop to buy jewelry. Yes, a couple have gone belly-up, but the Rolex, or whatever the collateral was has made me whole. Regards--Zyk
Making decent returns by picking individual stocks is hard work. Some stocks work out while some don't. Spending hours reading and responding to posts on the General Motors or American Airlines or Lennar homebuilding message boards where I have no investment would make that task even more difficult.
Divi, you obviously has no sense of what it is like to live with limited means. EZPW's latest presentation shows the APR of pawn and payday loans compares favorably to NSF charges and late fee charges. The late rent fee at my apartment complex is $100 plus receiving a nasty note from your landlord (they misplaced my check once).
If you own shares of MO, your customers are smokers. Stupid people who are going to smoke, get cancer and die.
If you own shares of LVS, your most profitable customers are compulsive gamblers who put every last dime into a slot machine.
If you own shares of EZPW, your most profitable customers are compulsive borrowers who can't balance a checkbook.
Those gold scrapping revenues are the result of somone pawning a wedding ring five times, and on the sixth time they can't redeem it.
If you can't accept that these are EZPW's best customers, and that this is how EZPW makes money, then this sector might not be for you.
out this link about the issue:
the way i read the article (as a european not familiar with much cultural and/or legal background on USA issues) it seems WalMart is offering prepaid debit cards - no word yet about credit cards. the idea of these cards is to allow money transfer from them in order to pay bills - no word to help their customers out of a difficult financial situation.
if anyone else finds a better link or has a different read on the story - please post it here.
Basicly, in the US, normal people have bank accounts and have paychecks directly deposited into said bank account.
Poor people, who are stupid, avoid having bank accounts. And so pay a fee to have checks cashed. The downside is that many places won't take cash, hence the development of pre-paid cards.
Let us not forget that PDL's require having a working checking account with direct deposit. So issues of check cashing are only tangetially related to issues of Pawn/PDL.
IMHO the whole reason they got associated was b/c of some check cashers offering PDLs.
While not per se getting involved, its just one step for WMT to make a deal with CCRT to offer credit cards etc.
they are closing their own walmart debit card down and if i understand the article in usa-today correctly replacing it with a visa-branded card. it may be an issue with acceptance in other places outside walmart, also visa's better reputation may help to convince consumers to use the new cards more than the old card. and then of course there are banking services for paying bills ...