The Skinny On

What Are Your Miranda Rights?

In writing our company's newest book, Street Smarts: Beyond the Diploma, I have spoken with police officers and criminal defense attorneys about what to do if you are arrested.

Here's what I learned.

The question of when the police are obligated to read you your Miranda warnings (the right to remain silent) is a little fuzzy. Technically, they are supposed to Mirandize you upon arrest - before they start asking any questions.

So if the police are investigating a crime scene and you start talking, they have no obligation to stop you. As far as they're concerned, you can blab on and on (perhaps even incriminate yourself) without having to remind you of your Miranda rights.

A poor decision, unfortunate circumstances or just bad luck could lead you to a difficult situation with the police. Of course, you might be scared, nervous and even upset. But if there's only one piece of advice you remember about what to do if you're arrested, it's this:

Don't. Say. Anything.

For more advice, see 'What To Do If You Get Arrested.'

Stop in the name of the law! If you're arrested, how will you protect yourself?

Credit Cards Are Not Your Friends

The banks are at it again!

They're offering credit cards in numbers we haven't seen since 2005. But unlike 2005, when credit cards were seductively inexpensive and card companies made money if/when you tripped up, credit cards aren't booby-trapped today.

Instead, they're pricey right from day one!

Annual fees are back. Starting year interest rates are much higher than they've been recently. Rewards programs have been generally scaled down.

The changes stem from the 2009 Credit Card Act, whereby banks no longer have the same flexibility with regard to interest rates and other card terms as they once did. In other words, it will be harder for them to make money the old fashioned way (increased rates, fees). Now card companies – still after your money, of course – are more transparent.

Now they say how they'll make money off you right upfront.

It's your job to keep their gains to a minimum: shop for the best cards, make your payments on time, and use your card wisely.

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For more tips on how to use credit cards wisely, read '15 Most Important Lessons For Avoiding Credit Card Debt'. Also, be sure to check out our book, 'The Skinny on Credit Cards.'

No. 33 - Burning Boats and Bridges

Legend has it that when Spanish conqueror Cortes landed in Mexico, he ordered his men to burn their ships to prevent any change of heart (read: escape) should they meet resistance. He created a situation of total commitment – a very real example of the expression "there's no turning back."

You can create situations where you are totally committed, leave no alternative. If you believe that "necessity is the mother of invention," then you can create necessity. In doing so, you tap into reserves and powers you may never have known you had.

Dr. William James, the father of the American psychological movement, said:

"We all have reserves of which we are not aware. We are all living well below our potential."

Dr. Norman Vincent Peale, author of The Power of Positive Thinking, said:

"We fail not due to lack of talent but rather due to lack of commitment."

Of course, it's frightening when you can't turn back. But it does force you to call on the best inside you – you may surprise yourself at how resourceful and creative you really are.

So burning boats is sometimes worth it. Burning brides, however, is a whole different story.

Burning bridges is never a good thing. The expression means to destroy a relationship because of some incident between two people.

It never makes sense to burn a bridge.

You just never know how and where you may meet again. You may think you'll never see that person again, and so what. But those of us who have been around the block a few times have learned that life is serendipitous. Never assume anything.

There may be times in your life when you started to write off someone (burn a bridge) who could later help you (or hurt you).

Sometimes it may make sense to burn the boats, but it never makes sense to burn a bridge!

No. 34 - Understand Automobile Insurance

If you own a car, you must have automobile insurance. Yes, it's the law, but you also need it to protect yourself.

Here are the most important things to know about automobile insurance:

1. The premium is what you pay the carrier to be insured. The deductible is what you must pay before your carrier pays anything on a claim.

2. The higher the deductible, the lower the premium.

3. There are two types of coverage – collision and liability.

4. Collision insurance covers car damage whether caused by you or another driver. If someone else was at fault, your carrier – after it pays you – owns your claim against the other driver and can sue him to recover its losses. This is called subrogation.

5. You may not need collision coverage if your car isn't worth much. You need to do a cost-benefit analysis. What's the cost of collision insurance when weighed against the benefit that you'll be reimbursed for your car's value if it's totaled?

6. Liability coverage offers protection if you or someone driving your car damages another car or, worse yet, injures someone else.

7. Even if your car is worthless, you must have liability insurance to protect yourself against lawsuits. If you damage another car or hurt another driver, you could be sued. Your legal fees (including punitive measures levied by the court) will be paid by your liability coverage.

8. Carefully consider the deductible when choosing your collision coverage plan. If you have a $500 deductible and the value of your car is $2,000, your premium should be pretty low because you will pay the first $500 in the case of any damage.

9. There are no deductibles for liability coverage.

10. Different auto insurance companies have different appetites for new customers. We recommend you speak with an insurance broker (someone who works with more than one carrier) when you shop for automobile insurance.

11. You can also procure valuable information regarding automobile coverage. Two good ones are Progressive and Esurance.

No. 35 - Take Chances In Your Youth

Most financial advisors suggest you have at least six months of living expenses in your savings account at all times. Just in case.

We suggest trying to bank closer to 12 months because you can never be too careful. However, it's nearly impossible for young adults to achieve that level of savings in their first few years out of school.

There's nothing worse than making decisions based on financial duress. The important choices you make in life should move you toward your goals. When you make decisions influenced by pressing bills, you often have to sacrifice long-term objectives for short-term needs.

For a young adult, it's difficult to accumulate 12 months of living expenses. You should consider making careful decisions as if you do have that money in the bank.

Although this isn't easy, young adults should make decisions based as little on immediate financial needs as possible. Yes, easier said than done. Financial pressures have a way of creeping into every part of our lives. Of course, we would never suggest ignoring financial realities and demands altogether. But when faced with an important life decision, young adults should make the best long-term choice possible - even if it means juggling bills or making sacrifices for another few years.

As you get older, you must make decisions with increasing care and tact. But your youth is meant for taking chances, for deflecting financial pressures and for making decisions that will (hopefully) lead to the best eventual results.

Yes, it would be terrific if you had 12 months of living expenses in the bank at all times. But that's not always possible. Take on life's chances anyway. In this way, you may make a tough decision that leads you where you want to be in twenty years.

No. 36 - The Importance of A Prodigious Work Ethic

Of course, there are no certainties in life. Many decent and hard-working people never achieve their full potential. The truth is there are many variables involved in the equation for ultimate success.

No one can control all the factors. That's just life. But one factor you can control is your work ethic.

Here are four lessons to remember about work ethic:

1. Each person must decide his/her own definition of 'prodigious.'

Life is a balancing game. When you work, you don't do something else. You need to decide what objectives - personal and professional - to pursue and how to allocate your hours accordingly.

2. Do not fool yourself.

There is a correlation between input and output. The more you commit yourself, the more likely you will achieve your goals.

3. Working smart is more important than working hard.

A woodcutter chopping a tree with a unsharpened axe is working hard, no doubt. But he's certainly not working smart. If he took 15 minutes to sharpen his axe, his efforts would be much less.

Of course, the metaphor rings true. But in today's competitive world, players work both smart and hard. Don't assume you work smarter than the next guy and are therefore entitled to work less hard. That's mentality simply spells disaster.

4. Ignore those who belittle your efforts

'Workaholic' is a derogatory term - it means a person works just for the sake of working. But in fact, this kind of name calling usually belies jealousy or an unwillingness to compete. Expend your hours as you see fit. Don't let someone else set (or limit) your dreamscape.

"The harder I worked, the luckier I got." - Leo Durocher, famous baseball manager

Read more on how to achieve personal success, or check out the work-in-progress book 'Street Smarts 101: Lessons Textbooks Miss.'

Click here to learn more about the book The Skinny On Success.

No. 37 - How To Spot Disingenuous Recommendations

When you read an advertisement or watch a TV commercial, you are naturally wary. You know the marketer has a clear agenda to persuade you to buy.

A friend's recommendation, however, exists at the other end of the spectrum. If a friend suggests you read a book or see a movie, you tend to trust that recommendation as it comes with no strings attached.

But some people get hurt when they follow someone's recommendation and don't recognize an ulterior motive.

A good example occurs in the real estate world.

Most people work with real estate agents when buying a home. Usually they don't take the agent's word at face value since the agent has a financial incentive to induce a purchase. So far, so good.

Now suppose you decide to place an offer on a house and the real estate agent suggests ABC Home Inspections to inspect the building. Would it occur to you that the agent may want you to use ABC because they are unlikely to do a thorough inspection?

Some real estate agents would suggest ABC because they do not want anything to stand in the way of their pending deal. ABC understands it can receive many referrals from the real estate agent if it works to keep her happy (i.e. doesn't conduct a complete inspection).

Therefore, you should always ask yourself whether a recommendation is disinterested. Does the stock broker have a reason to recommend a certain financial advisor? Does the home builder get a kickback from the painter he suggests? Does your real estate attorney have a fee-sharing deal with other attorneys?

Most recommendations are reliable. However, some suggestions aren't as innocuous and altruistic as they seem. Be alert and aware in order to protect yourself.

No. 38 - How To Develop Mental Fortitude

Many of our suggestions require you to exercise strength of mind. So, let's spend some time talking about that very thing.

In Napoleon Hill's famous book Think and Grow Rich, he wrote: "Thoughts are things."

Wonderfully put!

Hill believed a people's potential was limitless so long as they learned to control their mind.

He suggested we regard our thoughts as tangible objects. In this way, we better conceptualize our ability to reject harmful thoughts. If thoughts are just things, it's easier to eject it from your mind – like you would anything else you want to get rid of.

Other people use different metaphors. The famous martial artist Bruce Lee used to write down negative thoughts on a piece of paper and then set the paper on fire. He visualized actually burning negative thoughts such that it would be out of his consciousness forever.

We've already discussed on the most important gap between your actions and your thoughts. Thoughts came from many different sources - some known to you, others not. As Eckhart Tolle suggests, you are not your thoughts. Instead, you exist at a higher plane, just someone who hears the thoughts.

As the higher being, you can accept or reject thoughts as you wish. This concept is the core of mental fortitude.

Eject thoughts that don't help you grow as a person: feelings of inadequacy, fears, procrastination, impulses, etc. Take control of your life.

Mental fortitude is the ability to control the thoughts that dominate your consciousness. Napoleon Hill also said we can only process one dominant thought at a time. So when negative ideas seep into your mind, you must immediately replace them with something else – a strong, empowering thought that will dominate and evict the pessimism.

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Read more on how to develop willpower, or check out the work-in-progress book 'Street Smarts 101: Lessons Textbooks Miss.'

Click here to learn more about the book The Skinny On Willpower.

No. 39 - Debit Cards, Checking Accounts and ATMs

Here are 7 ways to make the best use of debit cards, checking accounts and ATM's:

1. Give some thought to the PIN (Personal Identification Number) you select.

The more digits, the better because it's harder for thieves to steal. Do not write your PIN on the back of your ATM or debit card! Use a number that has meaning to you but would be hard for thieves to discover (read: don't use your birthday).

2. Ask about minimum balance requirements for your checking account.

Some checking accounts require you to keep a minimum amount in the bank. If you fall below the minimum, the bank may charge you fees.

3. Write your account number on checks you endorse for deposit.

Most people deposit checks with "For Deposit Only" written on the back. If this check were to fall into the wrong hands, it could be deposited into anyone's account. That's why you should include your account number: "For Deposit Only to Account No. 12345."

4. Don't use blank deposit slips offered at the bank.

Here's one of the most creative scams we've ever heard: A thief took blank deposit slips and encoded his account number on them. Then he replaced the slips at the bank. Whenever people took one to make a deposit, the money actually went into the thief's account. Don't let that happen to you!

5. Be wary of float.

We spoke about how to utilize float in Lesson 97. Unfortunately, banks do the same thing. Sometimes they take your deposit but don't give you access to the money instantaneously. You need to ask when your deposits clear so your debit charges aren't rejected.

6. Prepare backup systems for your checks and debit card.

Protect your checking account and debit card use with a small line of credit or transfer from your savings account. This insures that checks won't bounce and debit card charges won't be declined.

7. Always try to use an ATM operated by your bank.

Foreign ATM's usually mean double fees.

No. 40 - Overcome Procrastination

We all deal with procrastination: the desire to put off something unpleasant.

As Mark Twain said, "Never do today what you can put off until tomorrow." Of course, he was kidding!

Procrastination is nasty because it builds on itself. Once you get in the habit of putting something off, one day leads to two, and then two to four. Before you know it, you're either in a crazy rush to get something done, or worse, it's too late.

Here is how to beat back procrastination:

1. Recognize the feeling.

The it-can-wait sensation that comes over you when you'd prefer not to do something. Procrastination lives in your head.

2. Debate yourself.

When procrastination begins to creep through your brain, start a debate with yourself. What are the consequences of putting this off? Will it hurt me in some significant way?

In fact, perhaps you CAN put off whatever it is without any real harm. Just be honest with yourself.

3. Take on a small increment immediately.

Suppose you need to clean your car but the idea of spending an hour doing so is just too much. Can you sacrifice five minutes? Can you start an undesirable project with a mini-step? Something that gets some momentum going?

4. Reward yourself.

So you have to start a chore immediately, but you still can't bring yourself to do it. Can you build yourself a reward system? Persuade yourself by promising yourself something once you finish.

Many of us hesitate to treat ourselves well. Sometimes we feel guilty, or a sense that we're undeserving. So get specific. If you complete A (the chore), you deserve B (the reward).

Procrastination is part of life. There will always be activities that are more enjoyable than others. Putting off some for the pleasure of others is just human. But when procrastination prevents you from reaching your goals, you may be paying too high a price.

"It's not that successful people enjoy doing what others do not. It's just that successful people do them nevertheless." - E.W. Grey

See a related post with even more tips entitled 'How To Defeat Procrastination.'