Friday, March 15, 2013

Local Toy Store "Saved"

This post is going to rub some people the wrong way, locally at least, but that's okay.  If you're not from around here, this may not mean much, but it might still be educational. 

Let me just start by saying our family does shop at the toy store, and we do love it.  This is not an attack on the owners, or people who donated to the store, or anything like that.  I have no affiliation with the bank (I don't even know which one it is) or the store.  It is just an observation, and perhaps a little education for those who don't have any experience in the business world.  I certainly don't have any inside information on this, I'm just going by what I've read/heard from other people and the owners.  I intentionally waited until the campaign was either successful or time expired on it before posting this so as to not sway anyone away from contributing.  If you made a gift based on your desire to see the store remain open, then that's great, I'm not making any judgments - Mama donated.  If you made a gift because you thought you were helping fight some sort of injustice, I'm sorry I didn't post this earlier for you, but now you know, and...
The first time I read anything about the store having to close its doors was when I read a Facebook post by a friend.  The post (paraphrased) said the big bad bank is forcing this business to close by calling their loan five years before it's due. 

Then I saw a flier posted which said "The bank has called our loan and wants their money now" (I can only assume the use of the word "our" attributes this quote to an owner) and "We all love these stores and find it appalling that a bank is calling their loan 5 years before its up!".

Call me crazy, but I don't think it's appalling.  If I lend my car to a friend for the week, is it appalling that I want (or need) it back after three days?  No.  It's my car, not theirs.  They are just borrowing it.  Even if we have a contract where the friend is paying me to use the car, there are things my friend could do to breach the contract and allow me to legally get my car back, such as failing to pay me.

So let's start here.  Banks do not operate in the "Not For Profit" arena.  They are owned by investors who expect some sort of return on their money, or at the very least the return of their money.  Some are publicly traded while others are privately owned.  Regardless of that, the bank and the Board of Directors have a duty to the investors first and foremost, not to their customers.

As noted by the owner in the above statement, "The bank...wants their money".  Yes, it is their money, and if the risk they are taking is not worth the reward, they have every right to call the loan.  The bank loaned them the money at a point when the risk they were expecting to take was justified by the return on the investment, but things don't always go according to plan.  The bank also could simply have underestimated the risk and made a loan they shouldn't have.  They screwed up, so they're trying to make the best of a bad situation.  Who knows?   
It's capitalism.
Maybe they don't want to call it, but are being forced to.  Bank regulators can put pressure on banks to raise capital and reduce the risk of their portfolios if they believe the bank itself is struggling or could be exposed to more risk than they should be.  This could result from bad loans, a bad economy, or just bad luck.  Whatever the reason, they can't reduce their risk by calling the loan of someone who has made all their payments and is running a financially viable business.   

If a bank looks at the underlying financials of the business it lent money to, and sees only losses and other debts, they may call the loan to force the business to liquidate assets and repay them what they can.  If the business files bankruptcy, the entire debt may be forgiven and the bank loses.  From the bank's perspective, getting 40% of what they are owed is better than nothing.

Again, I don't know if that is the case here or not, but I think it is.  On the fundraising page, this quote is posted right under the update which shows $21,023 has been raised: 
"If $75k is raised, the plan is to use a large chunk of those funds to satisfy the bank.  The remaining funds would be used to pay toy vendors who are eager for their money". 
Obviously, there are many creditors here, not just the bank.

In summary, I think it's great that the community pulled together to save a struggling business they love.  It would appear from the rest of the quote on the fundraising page that the owners are doing what they can to stay afloat and are not the ones who initially started the campaign, and I applaud them for their efforts.  Other local businesses got involved and either did matching gifts or offered to donate a percentage of their profits for the day. 

SIDEBAR - What a great move on their part!  It's a great way to bring in income for their business that they may not have otherwise had and build goodwill in the community, but if someone really wanted to give to the fundraising efforts, it would've been more effective to give 100% directly instead of 10% of profits.  Why?  Simple.  If the company making the 10% of profits gift only operates at a profitability margin of 20%, spending $100 at their business puts $20 in their pocket and of that, $2 goes to the campaign.       

You have to wonder, though, if the business can't get a loan from any other bank, and hasn't been able to raise private equity from any investor, how viable is the business?  And next year are we going to see the Second Annual Save the Toy Store campaign?

Comment as you see fit.  I won't edit or delete anything unless you're inappropriate or vulgar.  Anonymous posts will be deleted, no matter their content, so if you have something to say, make sure you claim it.

Thursday, March 14, 2013

What a great service

I got a call today from our health insurance carrier, or rather, someone they contract with.  This company offers health coaching.  It is included in my plan so there is no additional cost.

What, you may ask as I did, is the benefit of having a health coach?

The coach can help you with any questions you may have.  It could be living a healthy lifestyle, smoking cessation programs, reducing stress, access to a dietician, tips to improve your total health and reduce your overall medical costs.
Maybe we could get this coach!
You name it and they can do it!

Sounds interesting, and it's free.  The only thing I had to do was confirm the year in which my daughter was born. 

Ruby, that is.  They were offering to coach a newborn to better health.  I should've put her on the phone.

They were so concerned with the health of my family they wanted to get my two month old to stop smoking, eat better, exercise more, and maybe, just maybe, cut down on her medical expenses.

That's interesting.  I'm not exactly sure how they were going to keep her from catching a virus and being admitted to the hospital, but apparently they were willing to try.  They "work with people of all ages". 

I assume they've called Mama as well, since she blew through her deductible three days into the year giving birth.  Birthing a child, in case you didn't know, is something you can avoid with a healthy lifestyle.  But you'll need a coach to do that.

I'm not a candidate for a health coach currently, even though I am probably the unhealthiest member of my family.  Guess I'll need to come down with an expensive illness if I want to be considered.

Monday, March 11, 2013

The art of negotiation

Brynne is a fantastic negotiator.  When I make an offer, she is quick to counter with her own terms.  In working through the actual negotiation she is concise and clear with what she wants.
I don't make her wear a costume, but I have offered her door #2.
Unfortunately for her, she doesn't understand the basic principle.  Follow along here and see if you can find where she goes wrong.  Brynne in red, me in black.

Please finish your chicken.

I don't want to eat chicken, I just want a cookie.

If you eat two more pieces of chicken, then you can have your cookie.

No.  Three more pieces.  (She also holds up three fingers, just to make sure I see her terms).

You drive a hard bargain, but I agree to your demands.  If you eat three more pieces of chicken you can have a cookie.


She then eats her three bites of chicken and gets a cookie. 

For those of you not seeing what went wrong in her process, I'll shed a little light on the art of the negotiation.  Typically, when negotiating, the goal is to give up less in order to get what you want, or at the very least, get more for the same amount you're offering.

She could've asked for one bite of chicken to result in the receipt of a cookie.  Conversely, she could've asked for two cookies in exchange for two bites of chicken.

For now, I'll let her negotiate this way, but as soon as she starts dealing with a third party I'll step in and give her a lesson or two.

Wednesday, March 6, 2013

Potty mouth

So I had a very interesting discussion with one of my little ladies last night.  She was walking around, in obvious need of some potty time, but not willing to do it.  Her words are in black, mine are in blue. 

Do you need to poop?

No, I pooped today.


No, I pooped last night.



Do you want to try and poop?


What if I tickled you until you pooped, would that be okay?

No.  It would get all over my pants, and we don't poop in our pants.

That is true.

And the carpet.  We don't want to get poop on the carpet.

Also true.


Point taken, I won't tickle you.

AND RUBY'S TOYS ARE ON THE FLOOR!! WE DON'T WA  Who wants to play Hungry Hungry Hippos?


Hippos, the ultimate distraction.

Monday, March 4, 2013

Go ahead, fire it up

Our new house has four chimneys, two fireplaces and a wood burning stove.  The stove is the only functional one as the rest are not lined.  Our last house had one fireplace, which we used to use regularly.  I think we stopped using it right around the time the girls were born.

I want to start bringing in wood (which is stacked outside, just waiting) and using the stove to help heat the house (since our electric and gas bills have been astronomical with the cold weather we've been experiencing while the temperatures are in the 20s).  Mama claims it's too dangerous as the girls could easily burn themselves.  Others have advised even if they do burn themselves, it'll only happen once and they'll learn from it.
We don't have this much wood, but we do have enough to last for quite a few fires.
Not sure how I feel about that, but my argument is we can teach them: 

1 - how to build a fire (inside, without smoking everyone out of the house or burning it down)
2 - to respect a fire and the heat it provides
3 - to not touch the stove
4 - to love the aroma of (properly aged) wood burning  
5 - there are other ways of providing things you need in lieu of paying for them

Even when I recommend using it only AFTER they've gone to bed, I get a negative response.  I realize they can't learn much if they're asleep when I build and maintain a fire, but I thought this might get Mama more comfortable with having one.  It didn't, obviously.

We just had it cleaned and inspected, so it is ready to be used. 

I'd love to hear your thoughts whether you think a fire should or should not be allowed.