Chasing the dollar
This week I am a bit disheartened. I have been reading stories, listening to pundits, and considering the future of our country. This is going to be a bit more direct than other posts and I don't have any funny quips or graphics to go along with it. If you will indulge me for a moment and let me rant I will promise a lighter subject next time.
RANT ON:
The media, Occupy, Democrats, Republicans, Banks, Friends, Family... Well everyone has told us that we should be "chasing the dollar" to live the American Dream. Ludicrous!
I heard that term "chasing the dollar" the other day and it really spoke the truth to me. We have been raised by a system that says you have to continually keep up with the Jones' (which don't exist by the way). You have to consume, consume, consume. Then while you are spending that money you will be guilt tripped to help those that are less fortunate. Even if they really aren't. You have to give till it hurts. So on one hand you have to spend to get more while giving all those things, and more away. God forbid you have anything left. Someone else will come in and tax that. Does anyone else see a problem here?
I heard from a friend, with weeks of back to back birthday parties to go to for her son's friends, that she is stressed out. She said it was because it is so expensive to be a guest to a birthday party. WHAT!!! She said that you can't just make something as a gift, you have to spend money. And on top of that if you get something cheap (like from Target or Walmart) you easily could be chastised. Then in the same breath, we have a parent friend that is giving a birthday party for their toddler. They have to have it catered, have the bounce house, have the clown, give thank you gifts to the parents and the kids that come. It is completely insane that we have come to this.
Yet another person I follow regularly said that they sat down one day and really looked at their bills and their income. He figured out that from January 1 - July 1 paycheck, 100% of that would go to House payments, car payments, and utilities (if you looked at the whole year). Then from the July 15th paycheck through October 1 he would use 100% of that to pay for credit cards, food and charity. From October 15th through December 15 paychecks he would spend that money on gifts, medical costs, insurance, and taxes. That leaves him 1 paycheck for savings and entertainment. He literally doesn't make any money for himself until 51 paychecks later. Then 15 days later the cycle starts again.
We are slaves. Slaves to a system that is not being used responsibly. Trust me I don't want to go off on one of those rants that our system is broken. Kill the rich, government help us, Government is the problem, blah blah blah. It is your and my fault. NOT anyone else. We did this to ourselves by believing the lies. If you say it is someone else that caused this problem or that someone else needs to do something, you are saying you are too incompetent to figure things out for yourself. Are there predators in the world that want to lie to you and take things from you? Sure. Are there cheats and grifters in the world that will do everything to separate you from your goals? Of course. Are there things outside of your control that happen that will stop you from your dreams? Yes. However, it is up to YOU and you alone to protect yourself from those things. If you blindly follow the scammers, cheats, and liars, it is YOUR fault.
We have all heard about the emails that someone in another country (usually a prince or princess) needs to send you money via wire and have you wire the money back minus a fee. You ask yourself, "who falls for that"? Well we all do when we believe the liars and don't look out for ourselves and allow greed and pride-fullness run rampant in our lives.
I know that sounds harsh, and maybe I am talking to myself more than anyone else here, but I personally can't blame anyone but myself when times have been tough. I wasn't diligent with my beliefs. I don't feel like anyone owes me anything. I don't think the government or society or the community needs or has an obligation to come to my rescue. I was told by my Grandfather, "you made your bed, now lie in it." God forbid we actually LEARN from our mistakes and failures.
It is time we all really evaluate our own lives. We are all at a tipping point. We can be crushed by our own selfishness or rise up and become the people we were meant to be.
Have you ever considered ultimately why things are so expensive like cars and houses compared to when our grandparents and parents were buying those things? I am no economics major but it seems to me that it doesn't matter what the price of these things are today. We pay for things with credit. That way we just have to be comfortable with the payments each month. You don't have to worry about what it truly costs or what it is worth. Just as long as the payments are manageable you will be fine. I know this is over simplifying things but really if everyone wasn't able or willing to pay for a $500,000 house, there wouldn't be $500,000 dollar houses. Take that same scenario and say that if you pay it over 50 years (yes California has had 50 year mortgages) the payment is only 2100 per month, they buy houses like there is no tomorrow. Forget the fact that over the 50 years it will cost them an additional $800,000 in interest alone.
If you pay the minimum payment on your house note over 30 years at even 4.75%, you will have paid almost 2 times what you "bought" the house for. Seriously 2 times or more. So if you bought a 155,000 house just the principal and interest would be ~800 per month and in 30 years you would pay 291,000 total. If you saved the 800 per month for 15 years you would have just almost the total cost of that same house. Plus you would own the property outright. I can hear it now..."well we get tax breaks for having a loan", or "houses will be more expensive in the future". And you are right. But why do we need the tax breaks? Could it be because we can't really afford the house any other way? If you are prepared raising house prices should not affect you.
Want to be really depressed. Look at your statement for your credit card when it comes in. They have to tell you what happens if you make minimum payments only. It will take 30 years and exponentially cost more than the item did to begin with. Buy a TV today for 1500 on your credit card, it could cost you OVER 14,000 by the time you pay it off if you just make minimum payments.
Our grandparents and great grandparents saved and in most cases paid cash for things. Granted the houses were less expensive then but I surmise that if you paid cash for everything and enough people did this the price of things would drop. Maybe more in line with the way things used to be.
I know things are tough. I know that it could be hard just to make the minimums but if you save now and pay cash later it really does get better.
Rant off!
Gary McCoy is Broker and Owner of Tartan Real Estate Services in DFW. Broker License number 0588837. Any opinions in this article are just that, opinions. If you have any specific questions or concerns please contact us at 877-498-7323.
RANT ON:
The media, Occupy, Democrats, Republicans, Banks, Friends, Family... Well everyone has told us that we should be "chasing the dollar" to live the American Dream. Ludicrous!
I heard that term "chasing the dollar" the other day and it really spoke the truth to me. We have been raised by a system that says you have to continually keep up with the Jones' (which don't exist by the way). You have to consume, consume, consume. Then while you are spending that money you will be guilt tripped to help those that are less fortunate. Even if they really aren't. You have to give till it hurts. So on one hand you have to spend to get more while giving all those things, and more away. God forbid you have anything left. Someone else will come in and tax that. Does anyone else see a problem here?
I heard from a friend, with weeks of back to back birthday parties to go to for her son's friends, that she is stressed out. She said it was because it is so expensive to be a guest to a birthday party. WHAT!!! She said that you can't just make something as a gift, you have to spend money. And on top of that if you get something cheap (like from Target or Walmart) you easily could be chastised. Then in the same breath, we have a parent friend that is giving a birthday party for their toddler. They have to have it catered, have the bounce house, have the clown, give thank you gifts to the parents and the kids that come. It is completely insane that we have come to this.
Yet another person I follow regularly said that they sat down one day and really looked at their bills and their income. He figured out that from January 1 - July 1 paycheck, 100% of that would go to House payments, car payments, and utilities (if you looked at the whole year). Then from the July 15th paycheck through October 1 he would use 100% of that to pay for credit cards, food and charity. From October 15th through December 15 paychecks he would spend that money on gifts, medical costs, insurance, and taxes. That leaves him 1 paycheck for savings and entertainment. He literally doesn't make any money for himself until 51 paychecks later. Then 15 days later the cycle starts again.
We are slaves. Slaves to a system that is not being used responsibly. Trust me I don't want to go off on one of those rants that our system is broken. Kill the rich, government help us, Government is the problem, blah blah blah. It is your and my fault. NOT anyone else. We did this to ourselves by believing the lies. If you say it is someone else that caused this problem or that someone else needs to do something, you are saying you are too incompetent to figure things out for yourself. Are there predators in the world that want to lie to you and take things from you? Sure. Are there cheats and grifters in the world that will do everything to separate you from your goals? Of course. Are there things outside of your control that happen that will stop you from your dreams? Yes. However, it is up to YOU and you alone to protect yourself from those things. If you blindly follow the scammers, cheats, and liars, it is YOUR fault.
We have all heard about the emails that someone in another country (usually a prince or princess) needs to send you money via wire and have you wire the money back minus a fee. You ask yourself, "who falls for that"? Well we all do when we believe the liars and don't look out for ourselves and allow greed and pride-fullness run rampant in our lives.
I know that sounds harsh, and maybe I am talking to myself more than anyone else here, but I personally can't blame anyone but myself when times have been tough. I wasn't diligent with my beliefs. I don't feel like anyone owes me anything. I don't think the government or society or the community needs or has an obligation to come to my rescue. I was told by my Grandfather, "you made your bed, now lie in it." God forbid we actually LEARN from our mistakes and failures.
It is time we all really evaluate our own lives. We are all at a tipping point. We can be crushed by our own selfishness or rise up and become the people we were meant to be.
Have you ever considered ultimately why things are so expensive like cars and houses compared to when our grandparents and parents were buying those things? I am no economics major but it seems to me that it doesn't matter what the price of these things are today. We pay for things with credit. That way we just have to be comfortable with the payments each month. You don't have to worry about what it truly costs or what it is worth. Just as long as the payments are manageable you will be fine. I know this is over simplifying things but really if everyone wasn't able or willing to pay for a $500,000 house, there wouldn't be $500,000 dollar houses. Take that same scenario and say that if you pay it over 50 years (yes California has had 50 year mortgages) the payment is only 2100 per month, they buy houses like there is no tomorrow. Forget the fact that over the 50 years it will cost them an additional $800,000 in interest alone.
If you pay the minimum payment on your house note over 30 years at even 4.75%, you will have paid almost 2 times what you "bought" the house for. Seriously 2 times or more. So if you bought a 155,000 house just the principal and interest would be ~800 per month and in 30 years you would pay 291,000 total. If you saved the 800 per month for 15 years you would have just almost the total cost of that same house. Plus you would own the property outright. I can hear it now..."well we get tax breaks for having a loan", or "houses will be more expensive in the future". And you are right. But why do we need the tax breaks? Could it be because we can't really afford the house any other way? If you are prepared raising house prices should not affect you.
Want to be really depressed. Look at your statement for your credit card when it comes in. They have to tell you what happens if you make minimum payments only. It will take 30 years and exponentially cost more than the item did to begin with. Buy a TV today for 1500 on your credit card, it could cost you OVER 14,000 by the time you pay it off if you just make minimum payments.
Our grandparents and great grandparents saved and in most cases paid cash for things. Granted the houses were less expensive then but I surmise that if you paid cash for everything and enough people did this the price of things would drop. Maybe more in line with the way things used to be.
I know things are tough. I know that it could be hard just to make the minimums but if you save now and pay cash later it really does get better.
Rant off!
Gary McCoy is Broker and Owner of Tartan Real Estate Services in DFW. Broker License number 0588837. Any opinions in this article are just that, opinions. If you have any specific questions or concerns please contact us at 877-498-7323.
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