Category Archives: credit

The Pilgrims had their money problems, too!

Just a little something about me. I live in Mystic, CT, and I frequently walk around Mystic to get some exercise. On November 2, 2016, I stopped on the boardwalk that’s part of a park along the Mystic River. I couldn’t understand why there were so many people standing around with very expensive cameras. Less than 5 minutes later, the Mayflower 2 was sailing towards the Mystic Bridge. I caught this picture with my iPhone! The Mayflower 2 was headed towards the Mystic Seaport where it is being renovated. The renovation will take 2 or more years to complete.

I thought it might be interesting, for some of us at least, to review some history about the settling of America as well as some information about its financial beginnings.

I have taken the following information from the website of the Pilgrim Hall Museum, located in Plymouth, MA.

We all know – or think we know – who the Pilgrims were. We know them as people on the cutting edge of a religious reformation that altered every aspect of European society.

But what many people may not realize is that Pilgrims were also on the cutting edge of a great economic change. Their voyage was not just an adventure; it was an investment.

Most of the Pilgrims were not wealthy. They knew they would need a lot of money if their new colony in America were to be a success: money to rent a ship and crew, money for supplies for the voyage, money to support the colony until it could become economically self-sufficient.

And so, the Pilgrims asked some London merchants to invest in the colony. After much negotiation, 70 merchants decided to form a joint stock company with the Pilgrims. Because this was a risky venture, they were known as “merchant adventurers.”

We know that the merchant adventurers invested between 1200 pounds and 1600 pounds before the Mayflower sailed.

Shares were issued, each worth 10 pounds. The merchant adventurers bought their shares. The adult colonists – who were after all, putting life and livelihood on the line – were each given one share and given the option to purchase more shares. For the first 7 years, everything remained in the “common stock,” owned by all the shareholders. The common stock would furnish the Pilgrims with food, clothing and tools. At the end of 7 years, the shareholders (Pilgrims and merchant adventurers alike) would divide equally the capital and profits (land, houses and goods).

In the meantime, the Pilgrims planned to engage in businesses such as lumbering and fishing, sending wood and fish to England to be sold.

In actuality, however, instead of sending back goods, the Pilgrims had to ask the merchant adventurers for even more money, again and again and again. The Pilgrims’ debt became very large very quickly. The merchant adventurers were not happy and the Pilgrims agreed to buy them out.

Beginning in 1628, the Pilgrims were to pay the merchants 200 pounds a year until they had paid 1800 pounds.

By that time, with the extra money invested in the struggling little colony, the debt may have been as high as 7000 pounds. The merchant adventurers decided, however, that they would rather be sure of having some of their investment returned instead of running the risk of losing it all. Only three of the merchant adventurers continued as partners with the Pilgrims as they struggled to pay off their debt.

Although the money to be repaid was not nearly as much as they had borrowed, it was still a large amount of money for the Pilgrims. One of the ways they found to make the money they needed to repay their debt was through the fur trade, particularly the trade in beaver fur.

While it lasted, fur trading had a very important effect on the development of America. However, the fur trade was far from simple.

The reason? Financial rules were still being invented. Bookkeeping was not standardized. Communications were poor. Not only were there many unethical businessmen as there are today, but the rules of business ethics were not universally agreed upon. Commercial practices were largely unregulated. Even the simplest of transactions were fraught with potential danger.

There is much more to read on the Pilgrim Hall Museum website.

 

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What credit reports say about you

Hello Friends,

What your credit reports say about you is important information for you to know.

Your credit report contains detailed information about you and your credit history.  Your credit report contains the following details:

  • Who you are, other names you have used and where you have lived and worked.
  • How much you owe creditors, including how many accounts you have and how long you have had them.
  • Whether you have made payments on time and as agreed.
  • Whether there is negative information about you in public records, such as liens, collection lawsuits, bankruptcies and judgments.
  • How many inquiries have been made and by whom which may indicate how often you have applied for credit.  Applying for credit too frequently may be viewed by creditors as an indicator of high credit risk.

Information remains on our credit report for 7 years.  This includes delinquencies.  Bankruptcies can remain on your credit report for 10 years.

You should review your credit reports for the following reasons:

  • Credit reports can be reviewed by many entities, such as lenders, employers, insurance companies and landlords.
  • You need to confirm that the reports are accurate, to correct any information that is inaccurate and to monitor for fraud or identity theft.  In my counseling sessions, I saw problems particularly  with people who had names such as “Smith,” ” Jones,” “Baker” and the like.  Many times information on their reports belonged to another person with the same surname.

Studies show that consumers who read and understand their credit reports do a better job at obtaining, responsibly using and maintaining good credit.  Also, reviewing your report will help you identify and improve weaknesses in your credit history.

You are entitled to one free credit report annually from each of the national consumer reporting agencies (Experian, TransUnion andEquifax).  You are also entitled to free copies of your report if you’ve been turned down for credit based on information in that report.

Order online: http://www.annualcreditreport.com.  This website (authorized by Federal law), however, will not give you a credit score.

Play the Money-O game on Credit.  It’s just another tool to help you become more knowledgeable about the whole topic of credit.

Thank you for reading my blogs, and I wish you continued success with your desire to learn more about personal finance.

 

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