Monthly Archives: November 2015

Daymond John’s Live Talk

A few weeks ago I had the pleasure of seeing Daymond John speak live. If you’ve never heard of him (do you live under a rock?!), Daymond John is the founder of the apparel line, FUBU, and an investor on the hit reality show, Shark Tank. He was a great speaker and extremely captivating. He spoke about his life up to this point and gave some insightful thoughts incorporating 5 main points into the story (naturally these points spelled out S-H-A-R-K).

S – Set a Goal

Daymond worked as a waiter at Red Lobster in his 20’s. He talked about how he learned how a business worked from this job and a bit about the art of selling. I also thought he had an interesting viewpoint about when he decided to actually pursue his own apparel line. He said he was 100% sure he could go back to being a waiter if he failed, so what did he have to lose? I thought this to be a profound statement. Do you have a great idea or the urge to run your own business? What is holding you back from making the leap? For me, the answer to that question is focus, but setting a goal is a good start.

H – Homework

If you are old enough, you might recognize the picture at the top. That is LL Cool J rapping for a 1999 Gap commercial. What you may or may not know is that LL Cool J just happens to be from the same Queens neighborhood as a Mr. Daymond Garfield John. What you also may or may not know is that LL Cool J is wearing a FUBU hat and snuck in a slick, “For Us By Us” (FUBU) lyric into this Gap commercial. The Gap marketing folks didn’t do their homework on the up & coming urban apparel market. And FUBU was handed one of the biggest, accidental marketing campaigns of all time (FO FREE!).

A – Amor

Amor is spanish for “Love”. Everything is a balance in life and this is the one that I definitely felt for Daymond because it was clear that though I’m sure he loves his family, he became extremely busy building a FUBU empire in the early 1990’s and 2000’s and probably did not devote enough time for his family. This struck me because I am always trying to think about prioritizing the problems & things going on currently in my life. It’s a personal decision, but for me, everything I ultimately do in life is for my family’s well being and security. For Daymond, it could have been too, I don’t know. Whatever your priorities, it’s important to remember them & nuture them.

R – Remember, You are the Brand

If you’ve ever seen Shark Tank, you might agree that the sharks have bought into some pretty terrible sounding ideas and they have also passed on some pretty great businesses. But as Daymond pointed out, that show is almost always about investing in people, not products. If they see something in a contestant (not sure of the correct term here – HA!), their current idea might fail, but they will continue fighting and keep coming up with great business ideas until one is successful. I think I remember Mark Cuban saying something about all it takes is “one good idea”, so it’s definitely a mindset. Which leads to tonight’s final thought…


K – Keep Swimming

You don’t even realize things sometimes until you just stop and look around you. The week after I saw Daymond John speak live and heard him say, “Keep Swimming”, I realized I walk by this window art every week when I work out after my evening class. But it resonates with me deeply. No matter who they are or what they do, it’s what successful people do, “Just Keep Swimming”.

Should I Buy or Lease a Car? – The Long-Term Solution

If you hate reading, found this through google and just want an answer to this question: DON’T LEASE!

For everyone else:

Over the years, I’ve seen numerous blog posts and webpages asking the age old question, “Should I Buy or Lease a Car?” One thing that I haven’t seen is the long-term analysis of this question. Usually the tools focus on a singular decision, but the reality is that life is about a long-term string of choices. Below serves as a guide for a long-term scenario to this common question.

The Scenario:

In our fictional scenario, we will assume we are sitting in the magical year of 2016. We just graduated from college at 22 years old, got a spankin’ brand new job, and we need a car to make that hour long commute in. Three options are presented to us for acquiring said car. We can:

  1. Buy Car (Cash)
  2. Buy Car (Loan Financing)
  3. Lease Car

Because we are looking at the long-term implications of this decision, we will also assume that once we go down one of  the 3 yellow brick roads, we stick with the same acquisition method for the next 48 years (until we are 70 years old). Obviously, our method of obtaining a car could change over time, but in effort for a meaningful comparison, we will stick with this simple assumption. Below are some of our additional base assumptions:

  • Purchase Price of Car in 2016: $33,560 (this is average – people are cray cray…)
  • Annual Depreciation Rate: 17%
  • Inflation Rate: 2.5%
  • Interest Rate: 4.5%
  • Both Buying Methods: New Car every 7 years
  • Lease Method: New Car every 3 years

So just a couple of notes on these assumptions. I know cars don’t straight line depreciate, but this gets us down to about 57% of purchase price after 3 years. This is probably pretty realistic for most cars. You may be thinking the interest rate assumption is too high, but remember we are looking at a long-term case here. Though car loans today are lower than 4.5% for prime borrowers, they will likely increase over time (since we are in a historically low interest rate environment). I believe this assumption is actually quite conservative, as over the next 50 years I would expect this average rate to be more in the mid-to-high single digits (I don’t know why I typed this – no one knows where interest rates will be 50 years from today).

For both buying methods, we will assume that we get a new car every 7 years and also that we will take out a 6 year loan on the car for the financing method (DAYUM – that’s a long time). Not unrealistic, since amazingly the average car loan is up to a whooping 67 months. Crazy. At the end of the 7 years, we will also assume we use all the proceeds from the sale of our current vehicle towards the purchase of our next vehicle.

On the leasing side, it was interesting to research all the pieces of the math puzzle that make up a lease. If you’re not familiar with a car lease, here is usually how it works:

You make a down payment on the car (usually 10% of purchase price). The remaining value is something called the capitalized cost. At the end of the lease (3 years in this case) you have an assumed residual value based on depreciation rates (remember this is 17% annual depr. rate).  The other important piece of information in this calculation is this weird term called “the money factor”. It sounds like a fun game show, but later you’ll see how this kills you slowly over time and is not a fun game show.

Money Factor = Interest Rate / 2400      or in our case      4.5/2400 = .001875

So with this information we can now see our total cash outflows on each 3 year car lease:

  1. 10% down payment of car price
  2. Monthly Depreciation Cost (we are paying for the depreciation that is used up in our 3 year lease)
  3. Monthly Interest Cost (which equals [(Capitalized Cost + Residual Value) x Money Factor]/12)
  4. Monthly Sales Tax Cost (assume 7% because the seller has to pay taxes & stuff)

Now the craziest part of this whole calculation is #3 because you are paying interest on not only the capitalized cost, or the 90% value of the car you haven’t paid for upfront but also the residual value of the car after 3 years, remember this was 57% based on our assumptions from above. So think about that with me – you are paying interest based on: 147% (90% + 57%) of the value of the car, even though you are also paying 10% downpayment. Ouch.

Now for the results:

Screen Shot 2015-11-11 at 10.33.58 PM

A lot of numbers to decipher through, but not surprisingly buying your cars for the next 48 years in cash is the cheapest method in terms of total cash spent. The only difference between the financing vs. cash method is the interest that you pay. Since we are financing each of our cars over 6 years, instead of paying for them up front in cash, the bank wants to be compensated via a healthy interest cost. Okay, makes sense.

But let’s now turn our focus on the total cash spent in the lease column. This column consists of three portions of cost. 1) the principal cost (10% down payments every 3 years) 2) the interest cost (remember that high multiple of car value you are paying – 147%) and 3) depreciation / other cost (the value of the car you use up in your lease + local sales tax). Hopefully you notice the total cash spent in the column is significantly higher. But I think it’s hard to quantify or really see the simplified meaning of this comparison in the above table. So consider the following:

Screen Shot 2015-11-11 at 10.45.45 PM

Over the next 48 years, in each buy method you will drive 7 total cars for 7 years each (7x cars driven multiple). In the lease method, since you are leasing a new car every 3 years you will drive a total of 16 cars (16x). But when we look at the cost of each method in something called the equivalent cars paid multiple – the results are STAGGERING. Over the same 48 year method, we are paying for an additional 5.7 cars or an additional $180K total cash spent by leasing cars vs. buying our vehicles in cash. By the way, we aren’t leasing anything that’s a nicer car, the base assumption was with the same purchase price!

So what’s the point & why the difference?

Some others disagree, but I still would argue it’s best to buy vehicles in cash (and for way less than $33,560 – by the way), but the point is even over a 48 year timeframe financing your cars isn’t too big of a deal (especially in a low interest environment). You are basically paying for an extra car over your lifetime (7.9x vs. 7.0x). Not ideal, but not a life-changer either, and not everyone has the circumstances to buy cars in cash. But by consistently leasing a car, you are committing financial suicide. It hurts big time because in a car lease you are paying for the depreciation of a car but you don’t get any of the benefit (because you don’t own it!) and you are paying massive interest costs (though they disguise it well).

On my local radio, when I hear a leasing commercial that says, “Lease your car, but drive it like you own it” it makes me want to punch my radio dial in the face. Ha, yeah right. Don’t do it. Don’t lease.

How I Got American Airlines to Refund My Non-Refundable Ticket

Short answer: annoy the sh** out of them.

Below is the epicly frustrating monologue outlining my story of getting American Airlines to refund my non-refundable ticket. Overall, this process took about a month. I didn’t do anything special, but I took every avenue possible and just didn’t take no for an answer.

A few months ago, my wife decided she wanted to visit a friend in Nashville. So we did our usual shop around and the best rate we ended up finding was a $202 American Airlines round-trip fare on Kayak (best travel search engine, still waiting on the sponsorship). A few weeks go by and long story short, this ended up being the weekend that her friend had to move to her next location because of a rotating job. I was pretty upset. For a while. Mainly because I had enough knowledge from previous encounters with American that I knew this money might as well have been thrown out the car window while driving 80 down the highway. For all intents and purposes (NOT intensive purposes – I need a better editor – LOL – thanks to reader Mara for pointing out), this money was gone and the fare was unuseable.

The first step was a phone call to the amazing AA customer service department (HA! sarcasm much?). The lady on the phone told me that there would be a $200 change fee, no exceptions, blah blah blah. She explained to me a situation where I could still recover some of the fare with a re-booking strategy even with paying the $200 change junk fee. I asked, “so this could save me between $2 – $4, seriously?”. She said yes without laughing. How helpful. Thanks lady. Next.

Next strategy was social media. I tried to keep it respectful, but still get the point across:

Screen Shot 2015-11-03 at 12.41.06 AM

About an hour later, I was greeted with this helpful reply:


Are you effin kidding me American? You send me a link that shows that I can get boarding group 1, same-day flight changes, and other misc. crap (for a large fee). Next.

So next, I found a very helpful consumer advocate named Chris Elliot that helps steer consumers in what to do with situations like this. His website can be found here. Basically, the strategy was to write an email explaining my situation and hoping that I catch the right person that day. Here is what I came up with:

Screen Shot 2015-11-03 at 12.11.01 AM

Notice, I was intentional in mentioning the words “family emergency”, but kept it very generic. I instead focused the meat & potatoes of my message on the fact that they have competitors (your turn, Southwest) who don’t penalize customers when circumstances come up. I emailed this to the AA customers relations email and also submitted on their cute little customers relations form website. After no response for a week, I forwarded the email to their executive contacts in the order that Chris Elliot suggests.

Also, make sure that you do go ahead and cancel the flight before it takes off (I did this the day before the flight) and request a refund through that method, as well. If you have talked with people on the telephone or have actual humans that have responded to your emails make sure to include these names and a quick synopsis of their response (only if it helps your case) in your next round of emails to AA.

After a couple of more phone calls and another email back to the original customers relations department. I got this and just about stood up and screamed in joy at work:

Screen Shot 2015-11-03 at 12.26.17 AM

I couldn’t believe it, my persistence had paid off and I’d been successful in getting American to FULLY refund me on a non-refundable ticket. Persistence. That’s the name of this game. Funny thing, I got an email later that week (YES – after I received said refund) saying they were still looking into my potential refund and explaining their non-refundable policy. HA! Just goes to show you how on top of things they are.

In case you got lost in the story, here is a summary list of resources to help, I’m sure other airlines would follow similar suit:

  1. Tweet @AmericanAir – I like Twitter better than Facebook, because companies can’t delete your tweets directed at them.
  2. AA Phone Number List – if you are an AAdvantage member – talk it up!
  3. AA Customer Relations (12/30/2016 – updated link – thanks to lora b for pointing out) – email, send them a letter, submit the form, all of the above!
  4. AA Refunds – make sure to cancel the flight (preferably the week of)
  5. Elliot’s great list of AA contacts
  6. BE PERSISTENT. This is most important, you can’t just do one of these and expect to get your money back. Don’t take no for an answer.


What other methods have you all been able to deploy to get refunds on airfare or other travel tickets?