Can Money Actually Buy Happiness? More Cash on Hand Just Might!

If you are like me, you are keeping a close eye on your investments these days.  With stock prices at record highs, and bond yields still very low, it is not easy to find places to park our hard earned money that provide a low risk of loss paired with good returns. 

Trying to figure out what’s next can practically make you nuts.  Check out these headlines from CNBC:

  • “Bill Gross says all financial markets are ‘increasingly at risk.’”
  • “Bob Doll: Tech sell-off may not be over but it will breathe new life into the market.”
  • “Billionaire Ron Baron says the stock market and economy will double in 13 years.”
  • “The tech wreck is a sign there could be a summer swoon.”
  • “A record number of investors believe the stock market is overvalued, survey shows.”
  • “RBC raises stock market outlook into the tech wreck, sees 7% S&P 500 rebound into the end of the year.”
  • “Analyst Mark Mahaney on why tech stocks are not in a bubble.”

And these were just from the last two days!  No wonder most of us don’t sleep very well at night.  I can’t recall a time when so much has been riding on the economic performance of our country which translates directly into the growth of our investments—particularly those in our retirement accounts.  In the face of shrinking pensions and the instability of pension funds, combined with the potential of further modifications to Social Security, there are not just a few of us biting our fingernails.

So when our youngest daughter came to me the other day and asked if she should put some of her hard earned college savings into an investment that would earn her a higher rate of return I just sort of locked up.  I think I just blinked blankly for a moment or two before saying “Don’t do anything.  Leave it right where it is in the bank if you want to sleep at night.”  Those were the best words of investment wisdom I could come up with.

Ah, for the days of recommending she buy, ala Forrest Gump, as many shares as she could in a “little fruit company.”  True, banks in general hardly pay anything for the use of our money, but by and large they are safe and may, in fact, provide an even more valuable return: “Life Satisfaction.”

The American Psychological Association published a study done by Peter M. Ruberton (University of California, Riverside), Joe Gladstone (University of Cambridge) and Sonja Lyubomirsky (University of California, Riverside) entitled “How Your Bank Balance Buys Happiness: The Importance of ‘Cash on Hand’ to Life Satisfaction.”  (American Psychological Association, 2016).

Their study looked at the relationship between types of wealth and our feelings of well-being.  They pointed out that there have been a number of studies done that show a “…small, but discernible, relationship between income and well-being…”  They note that “Superficially, it appears that wealthier individuals—or at least, those who have sufficient wealth to meet, or marginally exceed, their basic needs (Kahneman & Deaton, 2010)—are also happier.”

Yet their study found that wealth alone provided an “…incomplete portrait of the link between wealth and well-being.” For example, someone who is wealthy but overspends their income, or is in significant debt, may be less satisfied with their life than someone who is more frugal and smarter in how they save and invest. 

To look deeper into “Life Satisfaction” their study was done using a large, but random, sample of customers of a large national bank in the United Kingdom. 

Their conclusion?  “Our results suggest that having a buffer of money available in checking and savings accounts confers a sense of financial security, which in turn is associated with greater life satisfaction…This finding suggests that people with low liquid account balances may feel more economically distressed—and thus less satisfied with their lives—than their peers with higher balances, even if their incomes and spending, considered separately from their account balances, would predict high financial security.”

So, if “Life Satisfaction” is your goal, nothing quite seems to beat cash on hand.  Take it to the bank.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded innorthern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 14 years.

Want Success Collecting Debt? Understand Your Audience

Have you ever watched a comedian bomb?  It’s painful to watch, right?  You squirm around in your seat counting the seconds (which seem like minutes) until their routine and the misery ends.  But here’s the thing, sometimes the reason they aren’t getting any laughs isn’t because their jokes aren’t funny. It’s because they are delivering them to the wrong audience. The right group of people could find the same comedian hilarious.

Same goes with debt collection. If you have a one-size-fits-all collection strategy you might find yourself bombing more often than not. If you want to be more successful, try to tailor your tactics and techniques to your debtor audience. Many factors need to be taken into consideration before deciding which collection practices should be used. For example, considering the age of a consumer can really make a difference. A particular collection tactic that works well for one age group may not for another.

I recently read an article by David R Glezerman in the Collector magazine that did a nice job describing why varying your approach works so well. The article’s opening line grabbed me immediately. “Understanding the unique characteristics of each consumer group can help you make stronger and more productive connections.”

Who doesn’t want that, right?

As mentioned earlier, the age (think generation) of the consumer owing the debt is a key characteristic you should consider when deciding which communication strategy will be most successful.   Over the years, we’ve written several blogs you might find useful that discuss the strengths (or weaknesses) of a particular age group such as The Lost Art of Conversation. Help is on the Way! 

Glezerman’s article presented in the ACA International publication did a nice job of compiling a lot of data in order to list the strengths and weaknesses of each generation. It explained that when you understand the characteristics of each generation you gain insight into the how and why the debt exists. And that can make a big difference on how you go about getting it paid.

Here are the highlights of the article:

Baby Boomer generation:  Their strengths include a good work ethic and strong communication skills.  Their challenges?  Poor financial literacy skills (they aren’t alone. Read why here.) and many, 59 percent of those who have kids, are still financially supporting adult children. This group still responds well to traditional communication methods like telephone calls and letters although many also use current technologies when buying and more importantly paying bills.

Average nonmortgage debt for this generation: $27,500

Generation X:  Even though this is the first generation not expected to do as well financially as their parents they are highly educated and tech savvy. But they are also cynical when it comes to creditors and exhibit a strong sense of entitlement.  Preferred communication for this generation?  Cell phones.

Average nonmortgage debt: $30,300

Millennials:  Are considered the most educated generation. They are extremely tech-savvy and well-versed in digital tools. Unfortunately, they don’t respond well to authority and want what they want now. Consequently, they spend their money as fast as they make it. Even though riddled with compliance issues their preferred communications tools are texts, emails and voicemails.

Average nonmortgage debt: $22,800

As you can see, utilizing traditional collection strategies on Gen-Xers or millennials oftentimes will not be as successful as when used on baby boomers. These tech-savvy consumers want to communicate through more up-to-date technologies.

Armed with insight into these generational differences, we, here at A. Alliance, recommend you modify your “consent to call” agreement and upgrade it to a “consent to contact” agreement. This can help mitigate compliance issues while improving your collection efforts by giving the younger generations what they want. Win-win!

Here is sample language for your “Consent to Contact” agreement

You agree, in order for us to service our account or to collect any amounts you may owe, we may contact you by telephone at any telephone number associated with your account, including wireless telephone numbers, which could result in charges to you. We may also contact you by sending text messages or e-mails, using any e-mail address you provide to us. Methods of contact may include using pre-recorded/artificial voice messages and/or use of an automatic dialing device, as applicable.

I/We have read this disclosure and agree that the Lender/Creditor may contact me/us as described above.

_____________________                     ______________

Borrower/Customer:                            Signature date:

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.

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What’s Your One Thing?

If you’re like me you’ve probably heard the buzz around the catch-phrase: What’s your one thing? Wondering how it all got started I did a little research. Turns out it’s from a self-help business book, The One Thing: The Surprisingly Simple Truth behind Extraordinary Results by Gary Keller and Jay Papasan.

When I first heard the question I knew our one thing right away.  Since we are a collection agency you might think the answer is a no-brainer: to collect money.  And yes, you’d be right, we certainly collect a lot of money. But honestly that’s not our one thing.

Is it compliance?  Another good guess. The debt collection industry is highly regulated at both state and federal levels. Compliance is extremely important to us here at A. Alliance. We spend a lot of resources and work hard to stay abreast of all regulations and what’s happening with court rulings and proceedings. But that’s not our one thing either.

I could go on and on, but will cut to the chase.  Our one thing is caring! Everyone here at A. Alliance cares about our clients, consumers, patients, communities and each other.

We are blessed with excellent, caring leadership which binds us together as a team and keeps us focused on our goals while providing a terrific work environment marked by intelligence, compassion and kindness. Our Mission Statement includes values of honesty, balance, integrity and fair play. Our leadership team lives these values every day.

By caring about what we do, who we do it for and each other together we are committed each and every day to doing our best to collect each and every dollar owed to our clients, professionally and in a timely manner.

This is a tough industry, oftentimes it is difficult working with situations that are inherently negative. By always focusing on being helpful we all maintain a positive outlook which translates to better experiences for patients and consumers as well as outcomes for our valued clients.

One of the passages in the book that spoke to me was, “Passion for something leads to disproportionate time practicing or working at it. That time spent eventually translates to skill, and when skill improves, results improve. Better results generally lead to more enjoyment, and more passion and more time is invested. It can be a virtuous cycle all the way to extraordinary results.”

Don’t get me wrong, A. Alliance knows we must never stop trying to find creative solutions, advanced technologies, or services that create value for the Company or our clients. But if extraordinary results are what you are after first and foremost you gotta care!

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded innorthern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 14 years.