How Much Stuff Do You Really Need?

How Much Stuff Do You Really Need?

USA Today and The New York Times (among many others) have published articles about the Baby Boomer generation starting to pass down treasured heirlooms to their GenX and Millennial children.  Unfortunately, those trinkets and other items are being looked upon with some disdain.

We don’t want them.

We don’t value these items the same way our parents did or their parent’s generation did.

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Amortization 101 - #2 - Your Friendly Neighborhood Bank Isn't So Friendly

Amortization 101 - #2 - Your Friendly Neighborhood Bank Isn't So Friendly

At the end of my last post, I asked the question:

If so much less interest is paid on a 15-year term versus a 30-year, why would the banks ever encourage you to take out that loan?

Let’s compare two loans, all things being equal except the term.

(click the links to download the pdf's of the amortization schedules)

$200,000 initial loan @ 4.5% interest

(Please note - I realize that you will normally get a better interest rate for a shorter term loan, but for this discussion we need to control all variables except one.)

On a 30 year loan, the total interest paid will be $164,813.42.

On a 15 year loan, the total interest paid will be $75,397.58.

That’s a difference of $89,415.85.

You would think the banks would hide a 15-year loan from consumers, wouldn’t you?  Wouldn't they prefer you pay that huge interest amount on the thirty year loan? 

Why don’t they?

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Amortization 101 - #1 - Where Does Your Interest Lie?

Amortization 101 - #1 - Where Does Your Interest Lie?

Smart People Saying Dumb Things

We’ve currently experienced the longest run of low interest rates in history.  It’s got many smart folks saying dumb things.  A college educated friend of mine says the current rates equate to “cheap money.” 

While I agree that low interest rates are great for purchasing investment properties and spurring development, is it really “cheap money?”

Do you think banks would really loan “cheap money?”  Before you answer, considered which entities usually have the largest buildings around: government, casinos and banks

What is that telling you?

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Twenty and a Day

Twenty and a Day

If you’ve read this site with a keen eye, you’ve probably caught the fact that I spent a handful of years as a police officer.  During that period, I had the opportunity to meet Frank Scalise, a sergeant who became a friend and writing partner.  While on the department together, we shared and edited each other’s work while encouraging each other to keep putting words to paper.

Sometimes life gets in the way and people go different directions.  Frank and I lost contact for extended periods of time, but would occasionally meet to catch up on where we were.  Frank was always forging ahead with his writing career, while mine had stalled, due to my own self-doubt and loss of vision.  After a recent move, Frank and I reconnected via email and have corresponded more in the past several months than we have in years.  It’s a friendship I’m glad that’s been rekindled.

Frank, writing under the pseudonym Frank Zafiro, released several books in his River City series before we collaborated on Some Degree of Murder, a tale set in his fictional world.   This isn’t a tale about how our book came about, but rather how Frank left the police department to pursue his passion.

He’s got a great story about reaching for your dream that I’ve asked him to share.  I believe it dovetails nicely into what we’re all trying to accomplish in the pursuit of financial independence, lifestyle design and/or early retirement.

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