Be careful on house closings. We've been unpleasantly surprised in the past when showing up to a closing and the closing costs were thousands of dollars more than we expected. Hidden fees and much more escrow for property taxes than we expected. Most mortgages - the bank pays your property taxes and adds that to the mortgage payment to make sure that the town doesn't foreclose on a home that the bank is financing. High escrow at closing protects the bank for a while from using their own money to pay property taxes when the homeowner is late with a mortgage payment. If you lose a job and can't pay your mortgage, sell it as fast as you can to prevent bank foreclosure. Banks love to foreclose because they, not you, keep the equity you put in your house when they sell it and do not return any excesses above the mortgage amount, but instead keep all that equity. Also, never voluntarily increase your mortgage payment to pay the loan off faster. If you lose your job or are in ill health and therefore can't make mortgage payments in the future the bank could foreclose and keep even more equity. Plus most of that extra payment pays down interest not principal. It's equivalent to you giving an interest free loan to the bank. Who wants to do that?!! Instead, invest that extra mortgage payment until it grows large enough to pay off the loan. Double advantage - if you lose your job in the future, that savings gives you more time to sell the house while continuing to make your mortgage payments before the bank can foreclose when you run out of money and stop making mortgage payments, plus by investing your money, you will likely be able to pay off the mortgage sooner than increasing your mortgage payment as your investment grows in value over time. Finally get a 15 year mortgage, not a 25 or 30 year mortgage. The mortgage payment isn't that much higher for the 15 year mortgage, and you will save lots of interest paid on your mortgage. Get a fixed rate mortgage, not a variable rate mortgage. People who got variable rate mortgages are getting huge increases in their mortgage payments with the recent large increases in interest rates. If you have a fixed mortgage and interest rates go down substantially, you can always refinance (usually closing costs are much less on a refinance). Finally, as property taxes increase each year, expect your mortgage payment to also increase. If the bank allows it (some do) structure your mortgage so that you pay it, not the bank. But be careful - its normally paid to the town in one lump sum per year which can be several thousand dollars, and you need to be prepared to have that money available. If your other tax deductibles are large, you can deliberately plan to pay two years of property taxes in the same year, by paying one year a couple of months early. This can raise you tax deductibles sometimes enough to "itemize" your taxes and get a tax refund or pay less total taxes. This strategy would be an every other year strategy. If it doesn't raise your deductibles enough to get taxes saved by itemizing your taxes, then it's not worth doing.
Getting it Right - Welcome
The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.
I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.
My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.
It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.
An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.
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