Picture this…
You’re at mile 4 of your Money Marathon and feeling a little weak, and a bit confused. You just picked up some added energy (your new job) and you should feel invigorated, but others just seem to be doing better and going a bit faster. You are falling behind…
“I need to find a boost,” you think to yourself.
Then, you hear him. Faintly at first, but his message soon comes in more clearly as you plod on,”Get yer energy boost, here…sign up today, and get a big boost right here!”
There, off to the side of the race route in a stand decked out with banners advertising “Bart’s Carts – Energy Boosts for the Long Haul” is where you finally see him.
“Awesome,” you gasp as you shimmy over to meet with your savior. When you roll up you notice that he and the others at the stand are in their running gear and they’re surrounded by carts with a bench seat in the back and bicycle looking contraption attached up front. Odd, you think, but no matter.
“Hey dude – I’ll take some of that free energy.”
“Certainly. You seem to be a perfect candidate for the boost we offer here at Bart’s. Just sign this form right here and quick as that, I can give you all the energy you want!”
“Wait, why do I have to sign a form?” you ask a bit puzzled.
“Oh, it’s no big deal. It’s just a simple agreement between us that says in return for the boost we’ll give you now, you’ll pay us back a little down the road.”
“Pay you back?” you ask. Your Money Marathoner Pit of Pain BS meter starting to creep up into the danger zone.
Skeptically, you counter, “I don’t have any way to pay you back for an energy boost you give me, but assuming I did, what would it cost?”
“Aaah, yes. Let me explain. You see this Bart’s pedicab cart here? If you sign up now, you’re going to hop on that cart and I’m gonna pull you along for a mile. I have fresh legs now and I assure you, we’ll pass plenty of these runners who are beginning to feel like they don’t quite have enough in the tank to keep up the pace.”
“OK. And, what about the part where I pay you back?”
“It’s simple. After I’ve given you that boost for a mile, we will switch places and you’ll start to pull me along. I will tell you when we have to switch places.”
Your POP BS meter starts is registering at near max….
“Uh-huh, I see. And for how long will I have to pull you in return?” you ask, but you kinda already know what’s coming.
“Well, it depends. But, here’s the beautiful thing about my terms. I’m really flexible. If you want to switch for just a 1/4 or maybe a 1/2 a mile, that’s fine too. I’ve got some energy in reserve so if you need a bit more early in the race, I’ll be happy to pull you along a bit longer.”
“Uh-huh. So you’ll give me a boost for a mile or two, and all I gotta do is return the favor for a 1/4 mile. Wow – that sounds amazing. Who wouldn’t sign up for that? Lemme see that form…”
“Great. I knew you were a smart one when you strolled up. Sign right here.”
You grab the form and a pen, but you’re no dummy. Your POP BS meter – your common sense – tells you that last part about flexibility and getting a bigger boost than you gave back must be chock full of gotchas. Instead of signing, you start to read over the fine print on the form…
blah, blah, blah…..Client hereby agrees to repay Bart’s Carts equally and in full promptly upon request…blah, blah, blah…Client may choose to repay Bart’s Carts on flexible terms…blah, blah….should Client choose to repay on flexible terms, Client agrees they will accrue a 22.99% penalty increase on the balance of energy owed to Bart’s Carts for each mile thereafter…blah, blah, blah…the 22.99% penalty will continue to accrue on the balance until the entire amount is paid in full…
Yep. There it is. The Pit of Pain you knew was in the fine print somewhere is actually a really big, deep one. You’re proud of yourself for not being fooled by the too-good-to-be-true sales pitch from Bart about his wonderful, flexible terms.
“So Bart, tell me a about this 22.99% penalty that comes with the flexible terms?” you ask with the same smug disdain that a detective who already has video proof might ask a bank robber for his side of the story.
“Well, uh…” Bart stammers, but recovers quickly, “We’re providing an energy boost to someone when they need it most during the race. We’ll carry their load for a while in return for a promise to pay us back. It’s a valuable service…”
He’s about to justify how expecting 22.99% more energy back in return for offering flexible payback terms is fair, but you stop him before he can. You’re a little disgusted, but you also have something else in mind. Despite the potential pain here, you see opportunity in the first bit of the fine print in the form.
“Yeah, yeah. I get it. Now, tell me. Am I correct in saying that if I sign and you pull me along for a mile, as long as I then hop out and pull you equally for a mile, I will have completely repaid you without any penalty added?”
“Well, yes, but the best part of our service is the flexible…” Again you stop him mid sentence.
“Yeah, I know, your flexible terms are so flexible. I get it. Am I also correct in saying that after I’ve repaid you for the mile you pulled me, I can hop back on for another mile and you’ll pull me again, and we can repeat the give-take cycle without penalty, all the way to the end?
“Uh, yes. I suppose that is how it works, but…”
“OK. Here you go…”
You don’t bother letting him finish. Instead, you hand him the signed form, hop on his cart and smile.
“Let’s vamos! I need a boost, but I’ll be good and rested in a mile to pay you back. You and I are gonna make a great team all the way to the end of this race.”
With that, you’ve picked up the use of a valuable tool for the rest of the Money Marathon that, if misunderstood and mismanaged, might have dropped you into a Pit of Pain. A skillful move. I’m so proud of you!
Now, what the heck does this have to do with establishing credit? Hmm…
The Money Marathon 