Monday, August 24, 2009


By : Mr. George F. Schwender, B.S. (1984), Kankakee Community College (Financial Administration magna cum laude); High School Diploma (1980), Sheboygan Crossing High School (Prize for Excellence in Arithmetic); Owner, The Milwaukee, La Crosse & Rockford Loan Company, Inc.; Member, The American Pawnbrokers’ Union (1988-2004); Editor, I Like Loans Magazine (1990-present); Unmarried; Millionaire.

I have a good life. I am a pawnbroker and I am happy. People say that pawnbrokers are nasty parasites who prey on others’ misfortunes. They say that pawnbrokers profit from others’ misery and hard times. They say that pawnbrokers cannot love or experience happiness because they mercilessly track down debtors and sell off prized family heirlooms without a shred of concern. They say that pawnbrokers have no compassion and would sooner die than lose money.

Yet I defy the stereotypes. I am happy. I can love. I have compassion. Specifically, I love security interests.

Security interests made my fortune. Do you know what a security interest is? According to the Uniform Commercial Code, it’s an “interest in personal property or fixtures which secures payment or performance of an obligation.” U.C.C. Article I § 1-201(37). That might sound like legal mumbo jumbo, but it’s actually quite simple. Basically, it means I give you a loan. In exchange, you give me an interest in your personal property. “Personal property” means anything you can move, so I can’t give you a loan on your house. Banks do that. You don’t need to own a house to get a loan from me. Rather, you can come on down to the Milwaukee, Rockford & La Crosse Loan Company and get a loan on stereo equipment, candlesticks, family portraits, video game consoles, hickory chests, jungle gym sets, record players, old chairs, used televisions, table cloths, bottles, watches, clocks and anything else in your house, except maybe the kitchen sink or the furnace. I give you the money and you promise to pay me back. You also promise to pay me interest every month. And if you don’t pay up, I take your pledge because I own it by law. That’s what a security interest means. You can look it up in the Uniform Commercial Code, Article 9.

I run a brisk business. People always need money in a pinch. And people always have something somewhat valuable lying around the house, so they bring it down to my shop. I look it over. I do some calculations. I ask him how much he wants on it. If he only wants $100 after pledging me a $14,000 silverware set, I know he probably stole it. But if he wants $4,000 for the same silverware set, I know he probably owns it; and I make it out whether he pays me back or not. After all, I get a security interest in the $14,000 set. If he doesn’t pay me back the $4,000 I loaned him—plus 15% interest per month over 12 months—I get to take the set and sell it for $14,000. So it’s a great deal for me. True, sometimes people get emotional when they pawn family heirlooms like silverware sets. But who cares about them? I’m just trying to run a loan company. And I’ll tell you, in tough economic times like these, I couldn’t be in a better business. I’m not just recession-proof; I’m recession-powered.

I hear the craziest stories these days. People come in saying they lost their jobs and they can’t pay a medical bill. They tell me they just got divorced and can’t make a child support payment. Other people say the car company is going to repossess their car unless they pay the note. So naturally all this puts me in an excellent bargaining position. I don’t have to risk much money if the borrower is desperate. What do I care if the borrower doesn’t pay his child support with the money I loan him? That’s between him and the woman, not me and him. If he doesn’t pay me back the $175 I lent him on time, I get to keep his $1,500 golf club. Yes, people scream at me and call me an avaricious old leech. But it doesn’t faze me. I know success when I see it. If I make a $1,325 profit on a golf club for a measly $175 loan, that’s a success, no matter who calls me a heartless miser.

One woman said I would burn in hell because I took away her dead mother’s diamond ring. I hear this kind of thing all the time. But a security interest is a security interest; shrieking women and hell have nothing to do with it. I loaned her $1,000 for a very nice antique ring worth about $9,400. She told me she lost her job at an insurance company two months before and she needed the cash to pay her rent. I gave her six months to get her ring back, at 12% interest per month—that was a discount rate, too. After six months, she had only paid me $456.21; she told me she still hadn’t found a job and had gotten on welfare. So I foreclosed on the ring. She started hollering and yelling about her dead mother right in the middle of the shop. She scared some customers away. I tried to console her. I said: “Well, you got $1,000 from me. You only paid me back $456.21. By law, I can’t report your default to a credit bureau, so actually I’m helping you out. Your credit is still good. Would you like to pawn something else?”

She didn’t listen. She started saying the devil would get me one day and that I was a predator. She stormed out of the shop sobbing and even threw a pamphlet up in the air.

That’s the last I saw of her. Two weeks later, I sold her mother’s ring for $9,000. That was a good day. By then I had completely forgotten about the outburst.

I don’t allow my emotions to interfere with my loan business. But that does not mean I am not happy. Just because I keep my emotions under control in the pawnshop does not mean I do not feel happy. To the contrary, I am very happy with my life. I made $976,812 last year after taxes. My inventory is worth $1,200,000 and I have a $2,000,000 credit line through First Wisconsin Bank, N.A. I never have to worry about loaning money because I have a strong customer base. That’s the great thing about security interests; if someone defaults, you just take their stuff and sell it. It’s a beautiful thing. You win even when you lose. I feel happy because I am in a good business position and I have plenty of money for myself.

Yet people keep telling me that I am not really happy. They say that I can’t be happy because I take advantage of people every day and “peddle negativity.” They say that pawnbrokers cannot be happy because they profit from misery, and happiness cannot coexist with misery.

This is nonsense. I know how I feel. I feel happy. What does it matter how I make my money? I have been very successful in my life. I provide a valuable economic service to people in the community. I help people survive tough times with fast cash. If it weren’t for me, people might not make their car payment, even if I wind up taking their bracelets or silver chains. I feel good about helping others, even if they can’t see it. I feel happy to live in a country that allows people to make informed economic decisions without government intrusion. Yes, I’ve done well. But isn’t that everyone’s end goal? Why should I not feel happy that I have made a lot of money pawnbroking?

Frankly, I don’t buy the argument that you can’t be happy if you deal in misery. Lots of other business profit from misery, or at least involve misery. Bankers deal in misery every day. So do lawyers, doctors, accountants and even psychotherapists. Yet no one says they can’t be happy. Why do people single out pawnbrokers for dealing out misery? Making money requires misery somewhere along the line; pawnbrokers are no different from anyone else. Someone needs to lose money in order for another person to make money. That’s going to make someone miserable. That’s called “economics.”

I don’t let others get me down. Ironically, most people who say I can’t be happy are unhappy themselves because they owe me money. How can they criticize me about something they don’t even know? They are just angry because they defaulted and I sold off their jewelry to some wholesaler.

To hell with my critics; I can speak for myself. Here’s what I know: I love security interests and I am happy about it. You don’t need to love other people in order to know happiness. Quite the contrary, I am living proof that you can love security interests and still be happy. Security interests are not people. They are property interests that guarantee that debtors will pay me back for a loan. Property interests don’t talk back, they don’t cheat and they don’t suffer depression or anxiety. They don’t cost money to feed and they don’t complain. They just sit there until you sell them. They increase in value sometimes, too. And they never lose their looks or get ornery. I simply can’t understand why people say that happiness can only flow from human relationships. In my experience, happiness flows much better from property relationships. Just look at my house; I did not buy it because I cultivated nurturing “human relationships.” Rather, I bought my house because I cultivated nurturing property relationships.

Property pays. People don’t. In that light, why bother with people?

Philosophers waste so much time debating about happiness. If they only knew how simple it could be. By loving security interests, I found happiness. Security interests opened the door to happiness for me. That is my precious secret. There is no need to love people. You simply must learn to love interests in property that secure payment or performance of obligations that run in your favor. When you love security interests, you don’t care what people say about you because they owe you money and you hold their lacquered dining room table as security. When you love security interests, the law lets you take stuff away from people without consequence. Security interests immunize you against anything people will ever say about you. Security interests save you from depending on people. In my book, that is a good recipe for happiness.

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