So I know that 30 year mortgages are "the normal" thing. But anyone who keeps up with things going on in our country knows that the normal thing financially is bad.

I know my place that I'm in right now is a two bedroom, two bath condo that cost about 60,000 initially. If you have to put down 10%, then your mortgage will be about 54,000.

If you decide to go for the thirty year with a monthly rate of .5%, your mortgage will be about

$323.76. So all in all you will pay $122553.60.

If you will just pick the fifteen year with the same rate, your mortgage will only be $455.68 monthly. But pick with the 15 year mortgage you only pay $86022.40.

$40531.20 is how much extra you pay since you picked the 30 year.

I know the normal house is probably more like $25o,000 overall.

For a $250,000 place 30=$1,498.88/month 15= $2109.64/month

You are paying $159,861.60 extra if you pick the thirty year!!!

## Thursday, June 12, 2008

## Saturday, June 7, 2008

### Not Smoking equals LOADS OF MONEY!

This isn't a "smoking is bad for your health" blog, but it is a quit smoking to retire early blog. I just wanted to show how much you can save by not buying that expensive pack of cigarettes every day. For the people who don't smoke, think about something that you buy almost every day that you could live without.

Ok I don't smoke, but I know that a pack of cigarettes that isn't an off brand is getting more and more expensive. So I am going to estimate that a pack is $4.49 and that the smoker I'm talking to smokes one pack a day.

Now let's say you stop and start saving $4.49/day about 30 days a month = around $135/month

$135 a month for 40 years (480 months) at 6% interest.... You could have almost $270,000 in your bank because you quit smoking. I know that cigarette probably makes you feel so good but wouldn't a quarter of a million bucks feel pretty dang good too?

Ok I don't smoke, but I know that a pack of cigarettes that isn't an off brand is getting more and more expensive. So I am going to estimate that a pack is $4.49 and that the smoker I'm talking to smokes one pack a day.

Now let's say you stop and start saving $4.49/day about 30 days a month = around $135/month

$135 a month for 40 years (480 months) at 6% interest.... You could have almost $270,000 in your bank because you quit smoking. I know that cigarette probably makes you feel so good but wouldn't a quarter of a million bucks feel pretty dang good too?

## Friday, June 6, 2008

### More on Interest

According to wikipedia, the median household income in 2006 was just over $48,000 a year. So, let's just say this is your average lifetime salary and you saved 10% before tax (with 401k, IRA, savings account, whatever) every year. Finally let's also say you were getting 6% interest compounded monthly, and you did this from the time you are 40 to 65 (or 25 years).

$48,000/year -- putting $4,800 away a year -- that's only $400 a month

After 25 years, just from 10%, you will have $269,657 in your account!!

BUT if you started early, say at 25, and put away $4,800 a month till you are 45 and then added NO MORE MONEY when you turn 65 you will have over $595,000!

Talk about the power of compounding interest!

$48,000/year -- putting $4,800 away a year -- that's only $400 a month

After 25 years, just from 10%, you will have $269,657 in your account!!

BUT if you started early, say at 25, and put away $4,800 a month till you are 45 and then added NO MORE MONEY when you turn 65 you will have over $595,000!

Talk about the power of compounding interest!

## Thursday, June 5, 2008

### Interest

Interest...MAKE IT WORK FOR YOU!!!

This right here has caused more people to go bankrupt and many other to become filthy rich.

Let's say you max out your $1000 credit card, then just pay initial minimum payment of about $25 dollars at 18%(nominal, I'll talk about this later). If you continue just paying the initial minimum of $25 it will take you 62 MONTHS to pay it off!!!

You would owe the credit card company for over 5 years.

But in turn if you start saving that $25 a month, at 6% interest compounded monthly, at the age of 25 and continue until you want to retire at 65 you would have around $49,800 in the bank from that!!!

So like those people helping Ethiopian kids, if you will give less than one dollar a day (but to yourself) you will have about 50 grand in the bank after 40 years.

This right here has caused more people to go bankrupt and many other to become filthy rich.

Let's say you max out your $1000 credit card, then just pay initial minimum payment of about $25 dollars at 18%(nominal, I'll talk about this later). If you continue just paying the initial minimum of $25 it will take you 62 MONTHS to pay it off!!!

You would owe the credit card company for over 5 years.

But in turn if you start saving that $25 a month, at 6% interest compounded monthly, at the age of 25 and continue until you want to retire at 65 you would have around $49,800 in the bank from that!!!

So like those people helping Ethiopian kids, if you will give less than one dollar a day (but to yourself) you will have about 50 grand in the bank after 40 years.

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