the reason you are broke.

[Raazor]

cliffs?

[Aerovette]

Originally Posted by Mick

I got to the same point and couldn't stand it any more. First of all, she doesn't know the difference between gross income and net income, so she has completely ignored taxes. Second, in her example, she says the person at the end of the month is still "broke" because their expenses matched their income, except that she said they saved $1400 that month. In other words, she has no idea what the **** she is talking about.

And she said to not put in to savings and instead use the line of credit if something comes up. Well, good luck getting the second $12k to pay toward principal if you have $6k in home repairs on the line of credit.

I think her system is "adaptable" be sure doesn't work the way she spells it out. You have to KNOW you will have no surprises for 6 or 7 years.

[Aerovette]

Originally Posted by Raazor

cliffs?

Sammich maker teaching personal finance.

[BOTY]

Originally Posted by aerovette

I think her system is "adaptable" be sure doesn't work the way she spells it out. You have to KNOW you will have no surprises for 6 or 7 years.

Get back to me on how that works out.

[MrPeabody]

I don't think was even meant to be serious. I think it's a joke, a parody. Probably done by some college economics students. I mean really, Christmas lights around the white board?

[Aerovette]

Originally Posted by BOTY

Get back to me on how that works out.

[BOTY]

Originally Posted by aerovette

[bsmith]

Actually, when she started talking about the "line of credit" Visa card with a $15k limit, and a $12k balance at 21%...I knew the rest of the video was not for me.

[BOTY]

Originally Posted by bsmith

Actually, when she started talking about the "line of credit" Visa card with a $15k limit, and a $12k balance at 21%...I knew the rest of the video was not for me.

No chit.

[The_Dude]

Originally Posted by bsmith

Actually, when she started talking about the "line of credit" Visa card with a $15k limit, and a $12k balance at 21%...I knew the rest of the video was not for me.

Yeah well not all of us are accountants.

[Aerovette]

Originally Posted by bsmith

Actually, when she started talking about the "line of credit" Visa card with a $15k limit, and a $12k balance at 21%...I knew the rest of the video was not for me.

Well, I was watching because I saw the credit card balance and car payment figures and thought, "hey, this will be even easier for me because I have neither" then when she said to bypass the bank it went rapidly downhill and into a tree.

[bsmith]

Originally Posted by The_Dude

Yeah well not all of us are accountants.

indeed

[Raazor]

Originally Posted by aerovette

Sammich maker teaching personal finance.

copy

[Egnalf]

That method of paying down debt has been around for a while. I know a realtor buddy who used it for a while with success. Essentially what you are doing is using simple interest debt to rapidly pay down compound interest debt. By prepaying principal on the thirty year mortgage, you do save a ton over the life of the mortgage. two things really matter. First, you need a emergency fund, I dgaff what she said. Second, you need discipline.

When I bought my beach house I did this with a home equity line and paid down 250k in four years, but got tired of the shell game. Now I just send them a big check at the end of the year.

[Aerovette]

Interesting thing for me is that the source for my line of credit, would also be the mortgage lender. I wonder if their cooperation level would be impacted by that since they are the one losing in the game.

[Egnalf]

Originally Posted by aerovette

Interesting thing for me is that the source for my line of credit, would also be the mortgage lender. I wonder if their cooperation level would be impacted by that since they are the one losing in the game.

When I bought my place, it was recommended to me by the mortgage broker to do both kinds of loans in case I wanted to take advantage of the heloc. I am sure he got some spiff for selling two mortgages, but so long as what you do doesn't violate the terms of the agreement, they don't seem to care. They are still making bank in the early years of a mortgage. toward the end, not so much, so they would just as soon let it go.

[Mick]

Originally Posted by Egnalf

That method of paying down debt has been around for a while. I know a realtor buddy who used it for a while with success. Essentially what you are doing is using simple interest debt to rapidly pay down compound interest debt. By prepaying principal on the thirty year mortgage, you do save a ton over the life of the mortgage. two things really matter. First, you need a emergency fund, I dgaff what she said. Second, you need discipline.

When I bought my beach house I did this with a home equity line and paid down 250k in four years, but got tired of the shell game. Now I just send them a big check at the end of the year.

There is nothing counter-intuitive about sending some of the money you are planning on "saving" to your mortgage lender to reduce the balance on your loan. Your "return" on those funds is going to be the interest rate on the loan, which will be higher than the interest rate on any savings account available, unless you have a fixed rate loan and interest rates have gone up dramatically since you bought your home.

[Raazor]

Originally Posted by Mick

There is nothing counter-intuitive about sending some of the money you are planning on "saving" to your mortgage lender to reduce the balance on your loan. Your "return" on those funds is going to be the interest rate on the loan, which will be higher than the interest rate on any savings account available, unless you have a fixed rate loan and interest rates have gone up dramatically since you bought your home.

[bsmith]

Originally Posted by Raazor

Careful Mick, you'll end up being an accountant too.

[Raazor]

Originally Posted by bsmith

Careful Mick, you'll end up being an accountant too.

the world needs 'em

PK can math the shit outta numbers. Well most of the time.

*cough* 6er *cough*