News depicts economy far worse now than Great Depression

Squalebear, keep up the good work and keep your eyes on the prize, retirement. People who haven't worked inside the walls have no idea what you endure on a daily basis, and the dedication that the majority of the correctional staff bring to the job ... just a few bad apples occasionally tarnish your image and unfortunately, they are the ones seen on the news.

Wow, that was something special. Not only did you make me feel good,
but, you actual make me feel that I'm not alone. Thanks so very much !

The media depicts most of us as either being on the take, assaultive
bully's or jack booted thugs. Damn it, I'm not on the take ! I'll quit
while I'm ahead. :nuts:
 
Wow, that was something special. Not only did you make me feel good,
but, you actual make me feel that I'm not alone. Thanks so very much !

The media depicts most of us as either being on the take, assaultive
bully's or jack booted thugs. Damn it, I'm not on the take ! I'll quit
while I'm ahead. :nuts:
SB, don't let Buster see those jackboots..he'll want to borrow them.;):toung:
 
Squalebear, people who haven't worked inside the walls have no idea what you endure on a daily basis, and the dedication that the majority of the correctional staff bring to the job.

SB, I totally agree. Guys get arrested and are back on the street before the arresting officer has the paperwork done. So by the time you get'em they're totally ugly dudes. You're one of the unsung heros! :):):)


We got our mortgage amortization schedule from our lender and made double payments of just the principal. That way the extra mortgage payment was low while we were paying off our credit cards and toy loans, and by the time we'd made enough extra payments that our principal payments were way up there, we had the extra $ to do it because we weren't making any of those other payments in addition to our mortgage.

Switching gears, I'm curious if anyone else on the MB has tried this method of paying down their mortgage, and if so, did it work for you? And if not, what was the glitch? And is there something else out there that DID work for anyone?

Lady
 
SB

I totally agree with Mamikin and Lady. You are one of my heroes.

Lady, we did that years ago during the oil bust and S&L debacle with a mortgage and car note. We were both unemployed for about 18 months. We started out the wrong way, making interest-only payments on the bank's advice. My parents, who both grew up in the GD, sat me down and turned me around on it, and we started making double principal payments on both. We had 3 credit cards that we used for living expenses - food, gas, etc. - and played what I call "credit card roulette." Instead of paying the minimum balance each month, we simply transferred the WHOLE balance to another card BEFORE the due date, and just kept rotating the balance through those 3 cards. That way we were always "paid off" and had immaculate credit. In fact, they kept trying to raise our credit limit. Of course, the balance kept getting bigger and we knew we'd have to pay it sometime, but at least that way we kept up all our payments on home, car, utilities, etc. We ended up owing about $10K in credit by the time we found jobs. Once we went back to work, we kept up the double principal payments, paid both cars off early, and paid the house off in 13 years (total on a 30 year); paid off the credit card in 6 months. It works. When "working things out" with your bank, remember they're looking out for #1, and it's not YOU.
 
Switching gears, I'm curious if anyone else on the MB has tried this method of paying down their mortgage, and if so, did it work for you? And if not, what was the glitch? And is there something else out there that DID work for anyone?

Lady

XL-ent Lady

I did a similar method. I had a simple interest fixed rate loan on a house. I began by making a full monthly payment. 2 weeks later when I got paid, I made a $500 payment to principal only, then the next 2 weeks, I made the regular payment (prin and interest). (26 payments per year). Then repeated the process. I don't remember how long it took to pay off exactly, but as I remember it cut a 20 year mortgage down to about 9 years. The prin and interest payment was a little less than $500. This was back in the 80's when a nickel was worth a dime and interest was 9.5%(a good rate at the time). The first house I purchased back in 1984 was at 13%.....it really paid to knock that principal down ASAP back then. It still makes sense today.:)

PS: a sign of the times....In 1982 I purchased a CD that paid me 14.5% Interest. It was a good time to have money and not have to borrow.
 
Switching gears, I'm curious if anyone else on the MB has tried this method of paying down their mortgage, and if so, did it work for you? And if not, what was the glitch? And is there something else out there that DID work for anyone?

Lady


Lady,

I thank you for your suggestion but must admit that the glitch for me would be making the double payments on the principal, which I can't afford on my income in this high-cost area. I do dutifully pay a few extra dollars towards the principal - practical, but not nearly as effective.
 
We had 3 credit cards that we used for living expenses - food, gas, etc. - and played what I call "credit card roulette." Instead of paying the minimum balance each month, we simply transferred the WHOLE balance to another card BEFORE the due date, and just kept rotating the balance through those 3 cards. That way we were always "paid off" and had immaculate credit. ... When "working things out" with your bank, remember they're looking out for #1, and it's not YOU.

L2R, my congratulations on being exceptionally smart during a tough time! :D

One caution for anyone else out there who might be thinking about doing the credit card roulette thing now: A couple years ago or so, banks smartened up and began charging a 3% to 4% balance transfer fee and put it in itty bitty print at the bottom of the card agreement where most people wouldn't notice. :notrust:

Credit card roulette can end up adding severe $$$ to your amount owed now. :sick: When we don't read the fine print, "bank" can be just another 4 letter word these days..... :rolleyes:

Lady
 
"The US financial crisis is spreading from subprime borrowers to wealthier consumers, with evidence mounting that more affluent people are failing to pay their mortgages and credit card balances," the Financial Times reports. "Growing concerns over the financial health of richer borrowers are prompting banks and card issuers to tighten lending practices in moves that could futher dampen consumer confidence and spending more."
"Home prices in 20 U.S. metropolitan areas probably fell at a faster pace in May, indicating the three-year housing slump hasn't stabilized, a private survey today may show. The S&P/Case-Shiller home-price index dropped 16 percent from May 2007, according to the median forecast of 25 economists surveyed by Bloomberg News."
"The nation's top financial regulators and four of its largest banks announced plans yesterday to expand a method for financing mortgages, called 'covered bonds,' in an effort to reinvigorate the frozen housing market," the Washington Post reports. "Covered bonds are securities that a bank can sell to raise money for home loans. In return, the bank receives monthly payments from homeowners and pays back the bonds. "
"As carriers from American Airlines to Thai Airway International respond to high oil prices by shedding jobs, culling routes and grounding aircraft, Middle Eastern carriers are expanding as fast as they can in hopes of redefining their region as the aviation crossroads of the globe," the New York Times reports.
I want to see regulation on speculation in oil AND a windfall profits tax on oil. There's already two "windfall profits" taxes on taxpayers...the WEP on retirees, and the ATM on everyone. Time for oil companies to pay their fair share out of their obscene profits instead of letting them use it to buy back their stock and speculate in their product.
 
L2R, my congratulations on being exceptionally smart during a tough time!

One caution for anyone else out there who might be thinking about doing the credit card roulette thing now: A couple years ago or so, banks smartened up and began charging a 3% to 4% balance transfer fee and put it in itty bitty print at the bottom of the card agreement where most people wouldn't notice.

Credit card roulette can end up adding severe $$$ to your amount owed now. When we don't read the fine print, "bank" can be just another 4 letter word these days.....

Lady

Wow! I did the same thing to pay off my credit card debt. A good friend up in DC was 'playing' credit card roulette and told me how to do it. I went from making little to no headway in my principle debt to being totally debt free in 5 years using this method. Towards the end the balance transfer fee was introduced, but I just avoided those credit cards. At that time I was getting two to three 0% introductory offers in the mail every week. Paid very little in interest using this method over 5 years. The balance transfer fee would have still been worth it for large debts as most fees are capped at $50 - $100.

On the mortgage front, I also pay double my principle every month. It will shorten the 30 year mortgage to 15 years. It's easy now as the principle payment in 20% of the bill, but in 5 years that will increase to about 40%. My plan is to have the house paid off near the time I retire:D
 
I guess I'll tell my little secret....

Envelopes...I learned to write an item (bill, want, need) on an envelope and sort my money that way....great for kids who need the training and they can actually do it with cash to get the "feel". They watch the money go in, the watch it come out. The things they want and have to save for sits until it is full. No credit, you can't play the credit game with just envelopes.....No money, no glory. That's how you teach kids, who grow up to be big investors some day.

Also, you can provide interest in the form of allowance. If they have a savings envelope, you can reward them by "adding" a percentage for being thrifty.....My mom hated my savings envelope. Her extra was 10%. When I had $2500 one month, she told me I could move it to the bank and get "normal" interest rates. Man, I sure do miss the bank of MOM.:cool:
 
I'd be interested in knowing more about that system - if you have time to share some of the details!

Mamikin, finally had the time to get back to you on this. Long post.The system basically has you run an equation (very simple math), on all your debts to help you figure out how to systematically pay them down 1 by 1, with least amount of interest lost and debt gone fastest. Pay off the highest priority 1 (according to the equation by paying extra principle as much as you can squeeze out of budget elsewhere until that debt is gone, then take that debt payment and apply it to paying down the 2d priority debt (per the formula) until that debt is gone, and then use $ from the 1st and 2d nolonger existing debts to pay down the 3d priority debt and so on. Mortgage is usually last to pay off per the formula at which point the course advocates paying it off w/ 30% of your gross! monthly salary toward principal every month.

I wasn't willing to do that, but did decide I was willing to put down 30% of my takehome on mortgage every month. I didn't want to lock myself into a 2x/month mortgage payment. Too much attention to detail for me, I like paying bunch of bills 1x/month. I liked having flexibility to pay off an emergency bill with that $ instead of making a extra principal payment once in awhile if I needed it, just took a little longer paying off the house, but that monthly allocation doubled as part of my emergency funds for several years, for the just in cases.

Anyway it sounds like other people here have found other creative ways to deal with this issue and have gone through the darkness far deeper than I have and come out the other side alive for which they deserve full kudos. I just know what worked for me. I bought a couple books from the guy teaching the class afterwards and that's all the more $ I've ever given them. Here are a couple links about the class providers if you want to follow up with any of this. I found them on the internet tonight.

http://www.programcritique.com/subc...l=/subcategories/onlinegurus/JohnCummuta.html There are also some negative reviews on that review site about how the company does business, but since I dealt purely facetoface and hardcopy, I didn't run into any of the problems mentioned on this site and have never regretted the 3 hours and $25 (plus a couple books-maybe $50 total at the time).http://www.johncummuta.com/Meet_John.htm

The Dave Ramsey radio show also advocates similar debt-reduction principles per a friend of mine. My friend thought I was dumb to give up the mortgage interest tax deduction when I first started paying down the house, but then started listening to DR on his morning commute and 4 years after me, HE started doing what I'd already been doing for 4 years at that point. I just had to smile. He beat me by a month on his last payment this year (I think he'd been a homeowner longer than me already and had less principle to pay down than I did tho.):suspicious::o

Frixx, I've had 2 friends in my life, one current, who practiced the envelope method. It works!
 
Thank you, Alevin, for your post and the websites you copied. Yes, I'm trying to live a simple, debt-free life, and like you, I learned a lot from my depression-era parents.

In case anyone is interested, I'm posting a link to a show that will air on PBS with a tax advisor named Ed Slott. I saw a portion of his show previously but was not able to watch the entire show. Remember, our TSP accounts are going to be taxed eventually so if he can provide any tidbits or pearls of wisdom, this should be worthwhile.


http://www.kbdi.org/tv_schedule/program_details.cfm?id=120080804190000
 
I've listened to Dave Ramsey for years while commuting each day. He believes in no debt....good idea. When there is a crisis....the financial effect is lessoned. DR went thru some hard times which he discusses and that's why he talks/practices the way he does. He's learned the hard way...and wishes to teach us. Good Luck
 
I remember years ago while working for the Feds when they would talk about RIFs...Reduction In Force...ie layoffs which are rare. Anyway a co-worker would always chuckle and pull out his envelope which contained a bundle of savings bonds. The point was well taken....be prepared for hard times. Not just we individuals but the govt as well....which they haven't thus far. Even foreign govts are saying we need to prop up the dollar and reducing the deficit would help.
 
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