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Your Money

Toy Recall; Thinking Global Could Make You a Smarter Investor; Your College Loan Balance; Spending Smarter on Your Wedding

Aired August 05, 2007 - 15:00   ET


UNIDENTIFIED FEMALE: So happy for the celebration. I can't say more.

DAN RIVERS, CNN CORRESPONDENT: You face says it all.


RIVERS (voice-over): With the team gone, there was chaos as everyone hurried to leave. A fleeting moment of unity and happiness in a land otherwise be rest of hope and heroes.

Dan Rivers, CNN, Baghdad.


WHITFIELD: YOUR MONEY is just straight ahead but first here what is in the news right now. President Bush was in Minneapolis today to view the wreckage of the collapsed bridge. He spoke with survivors and rescuers and he promised federal help to help rebuild the bridge as quickly as possible. President Bush is praising the Senate for passing a bill that would expand the government's powers to eavesdrop on expected foreign terrorists. Somehow Democrats say the Senate bill goes too far. The House could vote on the measure today.

A NASA probe is on its way for the northern ice cap of Mars. The journey began when the predawn launch from Cape Canaveral, the Phoenix Mars Lander will look for signs that life is or was possible on that planet.

We'll update your top stories at the bottom of the hour now time for YOUR MONEY.


CHRISTINE ROMANS, CNN HOST, IN THE MONEY: I'm Christine Romans. Coming up on today's program. Why thinking global could make you a smarter investor.

VELSHI: Also ahead take students loan debt from overwhelming to under control.

ROMANS: That's right. Throwing a wedding to remember without a bill, you can't forget. VELSHI: But first, China's representation for safety took another hit this week when Mattel recalled nearly a million of its Chinese made Fisher Price toys because they were made with lead paint.

ROMANS: That's right. The uses of lead point in children's toys have been banned in the United States since 1978. But as Kitty Pilgrim reports, Chinese manufacturers have been coating millions of toys with toxic paint, toys that toddlers put directly in their mouth.


KITTY PILGRIM, CNN CORRESPONDENT, (voice over): Lead poisoning in young children can lower IQ, affect learning ability and damage the liver and kidneys but there are no immediate symptoms so parents wouldn't know if their child was ingesting lead from a toy.

DR. JAMES ROBERTS, MEDICAL UNIVERSITY OF SOUTH CAROLINA: Lead poisoning starts without symptoms at all. They can be a normal child running around playing but have an elevated blood lead level. You never know it without testing them.

PILGRIM: Fisher Price found lead paint on nearly a million Big Bird, Elmo, Dora and Diego figures made in China between April and July of this year and imported into the United States. The Consumer Products Safety Commission says, it's a particularly bad case. The lead was in the yellow paint surface coating the toys. A blatant disregard of the ban on lead paint in children's toys. The Consumer Product Safety Commission manned with 100 field inspectors is struggling with rampant Chinese safety inspectors. 80 percent of all toys in the U.S. now come from China and from October of last year, of the 306 recalls of products, 100 percent of recalled toys were made in China.

JOAN LAWRENCE, TOY INDUSTRY ASSOCIATION: There are a couple of bills being talked about in Congress that would enhance the safety system and we would be in favor of those.

PILGRIM: While there is a ban on lead paint, there is no ban on lead content in children's jewelry. Since 2004, the Consumer Products Safety Commission recalled 165 million pieces of jewelry with lead that could leak out.

LORI WALLACH, PUBLIC CITIZEN: These kinds of problems where you have really unsafe imported products flooding into our homes will continue until we change the trade rules.

PILGRIM: The CPSC wants a total ban on lead in children's jewelry by 2008.

Kitty Pilgrim, CNN.


VELSHI: So far this year has brought 26 toy recalls in the United States, and as Kitty said they are all involving products that were made in China. ROMANS: So for a look at what is being done to check the safety of the imports you buy, we're joined now by Don Mays, he is the senior director of Product Safety Planning and Technical Administration at "Consumer Reports." Thanks for joining us.


ROMANS: First of all, I want to start with the idea of lead paint on some of our toys. Almost a million products recalled this week. It's going to cost this company, what, $30 million, I think. It is a huge recall with huge expenses. What is the problem with lead paint on our children's toys first of all, lay that out for us?

MAYS: Well, part of the problem, lead is toxic, it is toxic to humans and children are particularly vulnerable. It can cause learning disabilities, behavioral problems, and in high dosages it can causes acute toxicity, which can actually kill you. We need to get it out of toys completely; it should have been out of there. And we need to get it out of jewelry and other products that kids come in contact with.

VELSHI: Don, Fisher Price, a unit of Mattel. Mattel has enjoyed a very strong representation as a company that has had good standards on this front and hasn't had these types of problems. If that was the standard, where is the problem? Is this a Mattel problem, is this an American company problem, is this an American inspection problem or is it a Chinese problem?

MAY: It's a very large problem. Let's first look at Mattel. Mattel had four recalls so far within the last 12 months. That's not a particularly good safety record. In fact, one of the recalls involved 2.4 million Polly Pocket play sets that had little magnets that fell out and could jury injury a child if they ingested two or more of those magnets. This is not new to Mattel; they almost become used to it.

The problem in this case with the Fisher Price characters, is that Mattel encrusted the testing of these products to the same company that was manufacturing those products. It was the same factory. Mattel trained their staff. But to a certain extent this is like the fox watching the hen house. It's very bad business. What needs to be done is there needs to be independent third-party testing and inspection that would catch these kinds of things before they ever leave the country and certainly before they wind up on the shelves of retailers as well as in the homes of consumers.

ROMANS: Actually that independent third-party testing is something that is in very, very early stages that folks in the industry and government are starting to talk about. The Consumer Product Safety Commission, that's the agency in this country that's responsible for overseeing recalls, they tell me this week that they are in close communication with the Chinese government, that there are meetings that they are going to be having in September to talk about toy safety and standards. The Toy Industry Association just had a big conference with its counterparts in China as well.

Is enough being done do you think by industry and by the government I guess to say educate the Chinese manufacturers of what the standards are here?

MAYS: You know, we are working on that. Certainly the effort has been escalated in recent months. That can be helpful. But we also have to look at the funding for our government watch dog agencies. Consumer Product Safety Commission, the FDA, the National Highway Traffic Safety Administration. They are just not funded or staffed properly to deal with the rising number of imports coming into the country. They don't have enough people at the ports to make sure that those products are safe before they cross our borders. That's the first step.

We have to work on the government agencies, make sure they're funded properly. But the other issue, the people that bring the products to the market, not only the manufacturers, but the importers, the distributors and the retailers have to be held accountable for bringing unsafe products to the market.

VELSHI: Don, we have a unit here at CNN where we just monitor recalls. I know "Consumer Reports" does. We have several a day, they're upwards of 10 or 12 a day. This has now gone from being a news story to a story about your house. Parents have had to go through their houses. If they haven't done so, what is it they're looking for. They're looking for these toys that have been recalled. There have been several others. How do you know as a parent what you should do right now? What should you do right now?

MAYS: What we've been advising the readers of "Consumer Reports" is to go to and arm themselves with the information they need to know about current recalls coming out of the federal government watch dog agencies. Arming yourselves with information is extremely important.

We also ask people to go to the safety blog at Consumer We're reporting on this situation on almost a daily basis. We're also warning consumers about being cautious about shopping at dollar stores. Based on some of the testing that we've done, we've found more substandard counterfeit and unsafe products from dollar stores. We think the risk level goes up when you shop at those stores. If you can avoid it, do so.

ROMANS: That's what is so kind of confounding about this case. This is Fischer Price the gold standard in brand recognition. Mattel a company that everyone said is the one said to model yourself after and these were main line retailers. So it wasn't a dollar store that is what is kind of interesting.

Don Mays, "Consumer Reports" thank you, Don.

MAYS: Thank you.

VELSHI: Still to come on YOUR MONEY how looking beyond U.S borders can pay off when you make your investments.

ROMANS: Why the guy in your workplace, you know who should have been fired years ago, why he wasn't fired.

(COMMERCIAL BREAK) ROMANS: Another wild week on Wall Street, job numbers and that big recall we just told you about. A lot of things going on if you're an investor looking at 401(k) or your retirement plan. It's hard to figure out what to do.

VELSHI: If you're a professional it's hard to make sense of what theses markets are all about. We have to remember some basics about investing, whether it is here or frankly making sure you're invested around the world.

ROMANS: Right, diversification. This is how you weather these moves in individual asset classes. Joe Quinlan chief market strategist for the Investment Strategies Group of Bank of America joins us now where you want to put your money and by where, and by where we don't necessarily mean what asset class, we are talking about wherein the world.

JOSEPH QUINLAN, CHIEF INVESTMENT STRATEGIST, BANK OF AMERICA: Right now I think the emerging markets is a good place, it has been for the last couple of years. Developed Europe and really across the board.

VELSHI: What does the term "emerging markets" mean anymore? It used to be very clear that it was a few countries that we were concentrating on. What is the emerging world?

QUINLAN: Well now it includes Vietnam and countries in Africa, so it is very broad based and it is a tremendous opportunity. The Middle East is breaking open as well, Southeast Asia. So it is a very broad definition and great opportunities.

ROMANS: There are some good stories happening outside of the U.S. stock market and U.S. assets. As a part of your overall portfolio, how much should you have exposed outside of the U.S.?

QUINLAN: It depends on the person. Some people travel a bit, 50 percent or higher. We tell our clients at least 15 percent.

ROMANS: At least 15 percent.

QUINLAN: At lest 15 percent. Combination developed and developing.

VELSHI: It's really easy to figure that out. Sort of these calculators about how old you are, who you are, what your risk tolerance is. And it will give you some sense of somewhere between 15 to 50, where you should be. Fundamentally, this is where mutual funds come in. We can't expect our viewers to know what the right investment in Africa, or Israel or Brazil is.

QUINLAN: Right. Let the professional money manager who goes to the countries, talks to the companies that do the work for you. There are some really good ones out there. When talking about Brazil, Poland, you have to go over there and see it over and over again.

ROMANS: Lets talk a little bit, you're not going to give individual stock picks. We respect that. Let's talk about exposure, some safe bets. Hong Kong and Singapore, this is an area for you. Why?

QUINLAN: Well, we like Hong Kong, it is a play in China. China is too speculative in the markets right now. There's a lot of Hong Kong companies that do a lot of business in China. They are part of the mainland China history. In Singapore, similar same story in the sense that Singapore is between India and China and now Vietnam. So if you want to play Vietnam, you can't do it directly as an individual investor, but do it through the Singapore companies that are there on the ground.

VELSHI: You mentioned Europe. Central Europe, some of companies that are growing, Poland you talked about, Czech Republic is doing well. Tell me what you look for if you are investing in Europe?

QUILAN: Well central Europe is really, I call it a mini China. Best way to place central Europe is through Austria. Because Austria those companies have deep historical ties. The Austrian Index has done very well, there's an upside. But there's a tremendous amount of emerging coming out pen up demand in Central Europe, a lot of infrastructure building. A great place to put money to work.

ROMANS: Latin America, another six to nine months of money to be made there.

QUINLAN: I think so as long as China continues on this pre- Olympic boom. I would be a little cautious ailing in 2008, but so far, so good. China is going by 11, 12 percent, needs commodities. South America provides them.

ROMANS: So Latin America, South America, the China story. I love that.

QUINLAN: it is amazing, yes.

VELSHI: We talk about the Middle East, and mainly we talk about things that don't relate to business opportunities. Yet what we keep on seeing is business opportunities emerging from the Middle East. You mentioned Israel. What should you be looking at in Israel?

QUINLAN: Israel has tremendous high profile very deep companies when it comes to technology. They are a technology place. Jordan has good companies as well. Turkey, we like, it has pulled back a little bit here. A lot of companies doing a lot of business in the European Union. But the best plan in the Middle East itself is the large luxury good providers in Europe. Because the Middle East is booming with consumption. The best way to play that indirectly for investors is through the large cap European luxury stocks.

ROMANS: One of the things that got us thinking about this was not only some of the returns that some of these industries in other countries. But also the fact that when we look at U.S. multi national earnings so much of that is coming from abroad, so you know that there is some kind of a story going on elsewhere and there must be money to be made or the average American investor too.

QUINLAN: If you're invested in large cap U.S. stocks you're doing well in that respect. I would go back 25 years ago, the large cap stocks, and best way to play emerging markets. That's not true today. You can be right there on the ground participating.

VELSHI: the one lesson of course is don't throw all your eggs into one international basket. People hear that India is great or China is great.

ROMANS: Diversify your diversification.

QUINLAN: There's plenty of opportunities and there is no reason to be concentrated in one country, stock or region.

VELSHI: Joe good to talk with you. Thank you for being with us.

QUINLAN: Thank you.

VELSHI: Coming up after the break we'll kick the tires on some of the America's biggest auto makers.

We are going to check out some of the week other top stories. Stay with us. You're watching YOUR MONEY.


VELSHI: So Ford and FM reported profits in the last quarter.

ROMANS: I'm sorry?

VELSHI: I know everybody was surprised by this. But it didn't last long. Bad news about Detroit's big three is on top of us. Jennifer Westhoven here now with a look at that story and other stories in the business this week.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: This is the trend we've been seeing for years. Detroit losing market shares but still this was a tough milestone to have to see. It was the first time ever that Detroit lost its lead right here at home. More car buyers chose foreign brands over those American names that we all know GM, Ford and Chrysler. Overall though for everyone sales fell 10 percent. Even Honda and Toyota had declined. There's a signal maybe people are slowing down on their spending.

Now a very different sale, Rupert Murdock won his prize paying more than $5.5 billion to buy Dow Jones after years of coveted the Wall Street Journal. Now a big question is will his opinions slant the paper's coverage? The paper's prestigious name and trust are exactly what makes it such a critical weapon as Murdock's News Corp. starts up Fox business channel.

And finally a mid life turn around by North West Airlines management, it had blamed pilot for all of those cancellations that stranded thousand of flyers at the end of June and again at the end of July. Well management said pilots called in sick. The CEO is now acknowledging that mistakes were made on management's part and said that employees might have been overworked. They will be paying overtime and attendance bonuses. Bosses are hoping that workers will stay on the job at the end of this month. I hope it won't happen again.

VELSHI: The end of the month thing is because there are limits on how much a pilot can work. So at the end of last month as you said these problems, the end of this month. Passenger doesn't care whose fault it is. Northwest pilots need to get together and sort this out.

ROMANS: And we know that this has been the worst summer on record, outside of Northwest. But delays and cancellations and weather. The whole system is scheduled to the max. And one little thing and its absolute turmoil.

WESTHOVEN: Yes but this was one of those stories where you're seeing the pilot stand up say you're asking us to work all these extra hours, you are not paying us any over time, why would I stay away from my family without getting any kind of incentive. Meanwhile they're pointing the fingers back at management who when that company came out of bankruptcy. You know the workers were stuck with their smaller contracts, less benefits, everything lower for them; management got big million dollar bonuses.

VELSHI: We also heard from viewers by the way this week who were experiencing these cancellations. Lots of them could not get proper service in Northwest in terms of refunds. We heard from people who booked another ticket at their own expense. We tried to clarity from Northwest on this and we couldn't so in the end these airlines have got to get their act together.

ROMANS: One thing to remember is that you only -- are the only person who can bring your patience to the airport airline experience. Customer service is so bad cross the board, it really behooves the customer to go in there and try to keep your cool. It's really irritating.

WESTHOVEN: Well if it stays this bad. The governor has put in a bill of rights. He's pushing for that again. If they can't get their act together, the government will make them.

VELSHI: Very interesting. This story is not going away.

ROMANS: Jennifer Westhoven.

Coming up next on YOUR MONEY, college debt can hang around long after you picked up that diploma. Learn how to finally zero out your college loan balance.

And later, get the wedding you want by spending smarter, not spending bigger.


WHITFIELD: Hello, I'm Fredricka Whitfield with the top stories. President Bush getting a first-hand look today at the bridge collapse in Minneapolis. The president toured the disaster site both by air and on foot. And met with officials, rescuers and survivors. He promised help in rebuilding the bridge as quickly as possible. President Bush is also praising the Senate for passing a bill that would expand government's powers to eavesdrop on suspected foreign terrorists. Some house Democrats say the Senate bill goes too far. The House could vote on the measure today.

Britain is halting all its live stock exports after an outbreak of foot and mouth disease on a farm west of London. All cattle on the farm have been culled and the area has been cordoned off. It was the first out brake of foot and mouth disease in Britain since 2001 when about seven million animals had to be slaughtered.

Blast of to Mars, the unmanned Phoenix Mars Lander begins a 422 million mile journey to the red planet early this morning. If all goes as planned, it will land on Mars in May. It will scoop up and analyze soil and ice samples.

Monsoon floods are causing misery in India, and Bangladesh, more than 35 million people have been affected. Many of them are homeless. Hundreds have died in hospitals, are now packed.

More news at the top of the hour. Now back to YOUR MONEY.

ROMANS: Ouch, $19,200, starting fresh in the world with an awful lot of student loan debt more then. Doubling in the U.S. over the past decade

VELSHI: You don't have to drag that debt around for decades. Especially if you make the right moves from the start. Lynnette Khalfani joins us now to tell us how to do that. She is the author of "Zero Debt for College Grads."

LYNNETTE KHALFANI, AUTHOR, "ZERO DEBT FOR COLLEGE GRADS:" It's not just a pipe dream. You can get there.

VELSHI: You're writing this from knowledge. You went from a situation where you were heavily in debt with credit cards and college debt.

KHALFANI: $100,000 of credit card debt and $40,000 in student loans. Yes, it can be done. When you think about it, students come out of school and student loan debt is a huge one, almost $20,000. They also have credit card debt. Startup cost for buying a new wardrobe to look the part at work. Some of them relocate, utilities to hook up on their apartment, et cetera, et cetera. Challenge is not just student loan debt but it is also managing your finances in the context of everything else you have to pay.

ROMANS: You have to be smart and hustle to try to be sure you don't get out of school with all of the debt, something that drags you down really. You got tips. You got to save early and often. Tell us some tips for staying out of debt.

KHALFANI: One of the things that I do encourage students and their families to do is save early and often. Because so many times I hear from people who say my son is 18 or he is 16. We're afraid we won't be able to afford college. Better strategies to think about it as soon as he is born. Start socking away money in 529 plans if you can, those are the state sponsored college savings vehicles, a great way to invest.

VELSHI: Put your money in there and hat money grows.

KHALFANI: Essentially mutual funds that you are investing in, but it grows and appreciates over time. Professional money managers look after it. You don't have to worry about it. It is a great way to save. Frequently so often we spend money on the kids' birthdays, tell your family listen I've opened a 529 plan for your son or daughter. Let them make contributions. I would rather have that.

ROMANS: Hear that grandma and grandpa.

KHALFANI: And they want to. A lot of times family members want to. We all know that making investment in our kid's future is something for the family and something for our community, for the country. You're helping somebody to increase earnings potential to be productive member of society. We all want our kids and our community members to be better educated.

ROMANS: You also say to look for different ways for financing and always negotiate. I kind of feel like I don't have a lot of leverage here.

VELSHI: I don't know, you have college financing plan that you can negotiate.

KHALFANI: This is one of the biggest myths about college financing. First of all, seek every other alternative before you turn to the loan market. So that means scholarships, grants, paid internship. Work study and any finances that the family helps can contribute. Let's say you get a financial aid package and they offer you loan and then other parts in grants. If you have two colleges that have offered you two different packages. Go to the college of your choice, your number one choice and say, listen. This other school has offered me a better financial aid package. What can you do in can you match or beat this? Believe it or not, a lot of schools will in fact alter their financial aid package especially for a student that's hot and in demand that they really want to come to that university. Don't be afraid to ask.

VELSHI: The issue of being able to look for other sources of money other than the normal loan application. It's exhausting, it is complicated and it is not in one central place.

KHALFANI: Sure. It's time consuming. A lot of young people that I talked to, they say I applied for this scholarship and didn't get it. Applying for a scholarship is not enough. You really have to apply for at least seven, a dozen or more. It's worth it. If you wind getting 30, $40,000 worth of scholarships. It's that much less in student loans you have to take out. You don't have to pay those loans off the next ten, 15 years. If you don't have to pay for a week, six months it will be worth it.

ROMANS: If you apply for a scholarship. You don't have to write different essays. Just hone in one good essay about why you feel you need this education.

KHALFANI: Exactly. Massage it if it needs to be tailored for different schools. Also letters of recommendation that you will get from people who know you and can attest to your character as skills as a student or working person. Use the same ones with multiple applications. There's ways you can get creative and reduce the amount of time that it takes.

The idea is that you really do want to minimize he student loan burden. Because this is a growing problem, we're talking about student loan industry being 85 billion dollar a year industry. Everybody talk about the credit card debt that students have but not enough attention is given to the student loan issue. It is a real problem.

ROMANS: All right Lynette Khalfani.

VELSHI: Zero debt for college grads. Good luck with that.

ROMANS: Thank you, Lynnette.

VELSHI: Up next on YOUR MONEY, here comes the bride and there goes the budget. Find out how to have a wedding that looks like a million without spending a million.

Plus see how far you have to go to get fired and not from personal experience. And what bosses have to do to get rid of you. Stay with us. You're watching YOUR MONEY.


ROMANS: That time of the year, you've gone to a bunch of weddings or you just got done with your wedding. The cost of planning a wedding can be immense.

VELSHI: Or like me, you can find a way to not be around when the weddings are on.

ROMANS: But make sure you send a gift.

VELSHI: Always do that.

A recent report says the average American wedding costs $27,000.

ROMANS: Yeah. That is about 7.5 months of the average household's median income. Kathleen Murray, deputy editor for the "Knot" has some ideas about how you can save big money on the big day.

VELSHI: Do it.


ROMANS: $27,000 is incredible.

MURRAY: It is incredible. But when you think about it, you're paying for the cost per person. If you have 200 people at the wedding at $150 per person. It starts to add up. Flowers, dress, wedding bands, it can be a tremendous amount of money, all about picking priorities and figuring out what you should spend your money on. And where you can cut corners.

VELSHI: And not come out as a cheapskate right around you needs to actually save this money. This is not the place that people think they can or should be cutting some corners.

MURRAY: Exactly. It's all about being realistic with your budget. You need to determine your budget from the start. Finding out how much your parents have to contribute to the wedding fund, how much his parents and the couples themselves, 70 percent of couples pay for and contribute to their own wedding which is huge. You definitely have to put all this money together. Figure out what your nest egg is and spend it wisely.

ROMANS: And then prioritize. Figure yes, you love to have your elaborate bouquets for everyone, but it might not make sense to spend $4,000 on flowers.

MURRAY: If you are all about the bank just readjust accordingly. We have this budgeting tool in where you put in the amount you have to spend and it calculates the averages. If you want to spend more on your gown, bump that up and we'll recalculate so you can figure out you can spend on everything else.

VELSHI: What do you spend on gowns these days?

MURRAY: The average is about $1500.

ROMANS: I got mine at sample sale so it didn't cost that much.

MURRAY: Sample sales a great idea, also Target. Wedding dresses under $200.

ROMANS: Let's talk about some other ways that people can cut costs. So if any is listening right now and they're planning a wedding and they can take home some good ideas for cutting costs without cutting corners.

MURRAY: Exactly. Well the first thing is your guest list. That's the easiest way to save money. You don't have to invite everyone you ever met. If you were invited to someone else's wedding you don't have to invite them.

VELSHI: You just face book those people. You don't have to put them on the wedding list.

MURRAY: Another thing with the flowers. You know peonies are very expensive blooms. They're about when out of season $19 a stem, but if you look for a substitute, like roses from Holland have that same gorgeous look. They are only about $3.00 a stem.

ROMANS: What about invitations? Some can be very elaborate and they can be very expensive per piece.

MURRAY: Yes, invitations can be very expensive. And especially now with marathon weddings, there's welcome parties, rehearsal dinners. A lot of information to pass on to your guests. So we skip all of the inserts. Have the invitation and one card that leads them to the wedding Web site where they can just logon and learn everything they need to learn about the wedding.

ROMANS: You know what my final piece of advice is for everyone. The bride sets the tone. If you spend 100 thousand and the bride is not having a good time and not enjoying herself. That sets the tone for everybody else. That's something you can't pay for. Which is a good night's sleep and really enjoying yourself, smiling and talking to everyone, having a nice time.

MURRAY: It's true. We get so wrapped up in how much things cost. You have to realize what this is; it is about celebrating the two of you and just having so much fun with it.

ROMANS: All right. Thank you so much.

VELSHI: Thank you for joining us. This is interesting. This is good. I have something for you. Does your husband watch this show?

ROMANS: Yes, he does. What does do you have for me?

VELSHI: Make sure he doesn't like this part.

I would like you to be my co-anchor. Let me unravel this for you. You don't have to say yes.

ROMANS: Is it for life?

VELSHI: Let me see how I get this open.

ROMANS: I will be your co-anchor even though you didn't get down on one knee.

VELSHI: We were discussing weddings and one of the things, one of the biggest costs involved is the one that comes before the talk of the -- flowers.

ROMANS: Bridesmaid colors, yes, it is the engagement ring.

VELSHI: It is an expensive purchase ant the whole experience can be a little bit intimidating. So resenting that I can partake in this discussion I sat down with Mark Vandon he is the CEO of Blue Nile, the online diamond jewelry retailer and I wanted to talk shop with him a little bit. I asked what advice he would give to someone looking to buy a diamond ring for the first time.


MARK VADON, CEO, BLUE NILE: I think that's a very personal choice. I think with any consumer. Some people are more concerned with the size. They want to buy a look. Other people want to make sure that it's the finest of the finest. It's a very personal decision.

Across the board what people need is to be educated. Go out, read a bunch. Make sure you buy a certified diamond with a GIA certificate, or an AGS certificate, those are nonprofit testing labs that tell you what you're buying so there's no bait and switch going on. If you're doing those kinds of things, and you are doing a little bit of comparison shopping to make sure you are getting good value that's really smart. Some merchants and retailers will make you feel bad if you're trying to comparison shop. There's nothing romantic about overpaying.

VELSHI: What's the average engagement that you sell go for?

VADON: Our average engagement ring is about $6,000. We're focused more on the high end of the market. The average in the U.S. is $2700 or so. We're going after the higher-end customer. We do a lot of business at very high price points. Last week we did a $260,000 ring. Yesterday we did a --

VELSHI: On the Internet. Somebody pays that kind of money on the Internet?

VADON: Over the Internet.

VELSHI: If I buy a diamond there and it gets sent to me and it doesn't show up what happens?

VADON: It's fully insured. We try to take all of the risk out of this process. Everything we ship out is a 30 day money back guarantee. The product is fully insured from the time it leaves our hands until it gets to your hands. You're buying it sight unseen. If there's any risk involved at all. That's really hard for you as consumer to stomach. We're trying to make it easy as possible.

VELSHI: What's the trend? What kind of diamonds are you selling more of? What are people interested in?

VADON: We see a couple fashion trends. People are more interested in square diamonds, princess cuts, emerald cuts, Asher cuts. That's definitely on the upswing; vintage looks are definitely in, a little bit more antiquity. You see fashion trends like that coming and going. People are buying larger and larger rings in the United States. One carat used to be a huge milestone for people, now the bar just keeps getting higher which we like.

VELSHI: What are you seeing in terms in the of price of diamonds. Is the demand that we see for pretty much everything else in the world because of the growth in Asia. Is that affecting diamonds as well?

VADON: Yes, I mean diamond prices over the last five years are up substantially. Especially for large diamonds. I think you just have world demand for this product that is growing. There's a large demand out of Asia and Russia especially for very high end stones. Ten years didn't exist. As oil prices rise you have more demand out of the mid East for the really, really high end special diamonds. This is really a global market. It is a limited supply coming out of the ground. As demand rises, prices are definitely going up.


VELSHI: It is very interesting story how this company got started. Ten years ago Mark Vadon was trying to get engaged. He knew nothing about jewelry. He goes on the Internet for information and he comes across this little diamond store in Seattle which happen to have a great Web site. So what does he do, he bought the company and made it into a $250 million internet retailer.

ROMANS: All right. Coming up next on YOUR MONEY we'll look at what it takes for a company to show you the door. Why it doesn't happen for people that should be shown the door.

VELSHI: We'll be right back.


VELSHI: Are you scared of being fired? Well, don't be. A little known fact is that my human resources department is far more afraid of me than I am of the boss.

ROMANS: Whether you're a slacker or whether you know of a slacker, our next guest who is not a slacker is here to give us the scoop on why it's not so hard to be fired for poor performance. Joining us now is Stanley Bing a columnist at "Fortune Magazine" and an author of the book "Crazy Bosses." Welcome to the program.


ROMANS: Why is it hard these days to get - how hard is it to be fired in Corporate America?

BING: It's pretty hard. In my opinion it should be hard to fire people, people depend on their jobs. There are a lot of incompetent people who keep their jobs. As examples to aspire to over a long term, so in general.

ROMANS: Also they make us look better right?

BING: And they make people look better and there are a lot of people in the upper regions who wonder how do they keep their jobs. The answer is, it should be hard. But it's very, very hard and the person really has to mess up big time.

VELSHI: We all know people. I might be one of them, who we work with who people think should be fired.

ROMANS: I don't think you should be fired.

BING: Or why do they have that job. Exactly. Most things people ask about me, how do they get that job and how do I get a job like that.

The question is, how do people hang in there over a long haul and the answer is by being consistent and not doing anything dramatic that gives management the reason to toss them out the her medically sealed window. ROMANS: In Corporate America it's extraordinarily expensive to fire somebody, isn't it?

BING: It is at a certain level, but there are processes in place in most corporations. If you're the boss and you are really unhappy, you keep a file, you give a person warning, you handle it in a business like fashion. The days people can say I don't like what you're wearing you are fired, or I'm in a bad mood, I didn't like my muffin this morning you're fired. All of that stuff is certain examples notwithstanding on television is pretty rare to see. And, you know, I think it should be. It shouldn't be hard to fire somebody who is really lousy, though.

VELSHI: The issue is what is lousy. What you're talking about is people who embarrass the boss or company. That's easy to idea.

BING: There are several things. First of all, there are crucial moments when you are called upon to perform. Everybody knows what it is. Its game day, the stakes are big. It's a breaking story here or something like that. And -- or in the workplace it could be the day they announce earnings or major announcement of some sort and that person just is not there.

How about being there is like, as Woody Allen said, 99 percent of the job. You would be amazed how many people show up on game day, in the wrong outfit, they're a little late. People have a desire to punch themselves in the nose. They're late. Being there is good and performing in critical times. And as you just said, not causing embarrassment for the person who you work for, because that's rough.

ROMANS: Let me ask about the dead weight. Everyone thinks in their own workplace, they can identify the people who they think are dead weight. Are -- is it dead wood, the dead weight already been whittled out? Is the low hanging fruit already picked out?

BING: To an extent, the dead wood is hard. The sponge, it's squeezed for several years. Of course there is always dead weight, sort of upper, senior, middle management that's where we have executive departure lounges in our building. I'm sure in this building, a whole floor of people who have disappeared but still getting paid in one way or another.

It's interesting; people say so and so are fired but still making money. It's really hard to get fired personally. To have yourself fired, it's rough. It takes a long time to get over. That's why people take time to get a new job afterwards.

VELSHI: Do people look to get fired. Everyone has a fantasy of getting a confrontation with their employer.

BING: Well there is a number of things; one is the emotional satisfaction if you want that over a period to time of going in there and saying I quit. Usually you should have another job, just as a tip. The other thing is, there's a certain level of corporate life where, if you're fired, it's like paradise. It's heaven. You got a big package, you're on the beach. Talking to reporters about what you would do if you're running this or that company. We all dream of that.

ROMANS: That's the cream. There's an awful lot of people who get fired.

BING: It's terrible. You don't want to do it to people if you can help it. The obvious thing with somebody who is not working out is to say to them, look, you're not working out very well. Why don't you take time? Take three months, six months, do what you need to do. That's a good way to deal with it. Then there are people who are just intolerable and you just can't stand look at them. Then they can be posted to weird locations or given road jobs that you never see them. But it is very tough to get rid of people. But sometimes it's really worth it.

I mean the weight off your shoulders as a boss to not have a person around filling a job that could be filled with a better person. That's a good feeling to not have to see, you know, Jack anymore who you just, you know, couldn't stand for years. It's liberation, it is a lovely feeling.

VELSHI: Stanley the book is a good read. Everything you write is a good read. Good to see you. Thanks for being with us.

BING: Great to be here.

ROMANS: Still to come on YOUR MONEY a retired soldier who is putting his golf game to work. We'll be right back.


ROMANS: Golf courses around the country play host to many retirees who spent their days, their retirement working on their game.

VELSHI: Well for one former soldier he is learning how the game he loves can help injured veterans work on their recovery.


VELSHI (voice over): Mr. Arunah Straussberger is practicing for his next round of golf. The course he goes every week might surprise you. It is inside Walter Reed Medical Center.

LT. COLONEL ARUNAH STRAUSSBERGER, U.S. ARMY (RET): I found out they were using golf as part of the therapy here in the occupational therapy clinic. What I do is instruct them.

VELSHI: Straussberger has been giving putting lessons for the last two years to soldiers who are recovering from serious injuries.

STRAUSSBERGER: The people I see are those who have no leg, one leg, one arm. There's equipment, that even though you have one arm, you can still putt.

VELSHI: Straussberger spend 24 years in the army himself before retiring. The 93 year old credits playing golf as key to his good health. In some small way he hopes it helps these soldiers too. STRAUSSBERGER: We try to get them to get back to where they were before they were injured. Their morale is wonderful. That's what amazes me.

VELSHI: His volunteer work personal when one of his grandsons became a patient because of a serious head injury sustained in Iraq.

STRAUSSBERGER: When I first saw him, it got to me. When he got well enough he would come down here and use the putting green with me.

VELSHI: His grandson went home to Texas with plans to become a teacher. So Straussberger continues on with his students.

STRAUSSBERGER: Encourage them to play golf. There's equipment that you can still play golf and please do.



ROMANS: I love that story.

VELSHI: It really is excellent. Well thanks for joining us for this edition of YOUR MONEY. You can catch Christine later today at 6:00 p.m. Eastern on "Lou Dobbs: This Week."

ROMANS: And you can see Ali every week day morning on "American Morning." We will see you back here next week.

VELSHI: Saturday at 1:00 and Sunday at 3:00.