Principle of Giving to God's Work | How to Use This to Build Your Church | Your Commitment | Credit Cards | Snowman Principle | Principle of Rock Salt | Myths and Other Lies | Owning Your Own Home Based Business | Investing for the Future | Books I would recommend you read | Learn From My Mistakes | The Disaster of Indebtedness | Links to Other Helpful Sites | My Web Map-Table of Contents
Become Debt Free In 4-9 Years
Myths and Other Lies

Several years ago, I was injured in an accident and unable to work. I got into debt over $140,000 in credit cards, lines of credit and building supply houses. Someone sent me a tape and the title was "People are lying to you, and it's costing you a fortune." It was an ad for a tape series and I purchased it for $79.00 and it changed my life. I was able to liquidate some assets and pay all the debt off completely in about three years.

I guess the mortgage industry is the biggest lie. We pay them several thousand dollars to loan us some money, and they triple the cost of the money over thirty years.

Let me ask you a question? How much is the interest on your home? You might tell me 7.5%. Well what would you think if I proved to you that you really paid about 89% interest that first year?

This principle about blew me away when I first learned it. OK, get your amortization schedule out. In this loan of $95,000 on a thirty year schedule, you will pay $7095 interest in the first year, and only $875.00 on the principal. Around 89% which you can calculate by division.

Monthly payment $664.25 times 12 payments for the year, equals $7971.00 house payments for the year, and if you divide $7095 by $7971 you will get 89%.

You have to pay on this loan for 20 years and 10 months before you pay more principle than you do interest. That means twenty years into the process, you are still paying 50% for that loan.

Think of it this way. That first year, you paid them $7095 to use their $875.00. If that doesn't make you want to pay your home off quickly, I do not know what will motivate you to do that.

And to complicate the problem, we usually move every 5-7 years and start the process all over again. Most folks reach their retirement age, with a house and a mortgage.

OK let's look at the credit card lie. Most of the companies entice you with a teaser rate to get you started. Then they add in their fee structures and if you are late, the charge is usually $25.00 or more. They encourage small paybacks, and if you make them a large payment, they will send you a bill with nothing due.

They do not want you to pay it off every month. If you make the minimum payment on an 18% card, it will take you over 20 years to pay it back, and you will have paid 3-4 times as much back in interest and fees.

Financing a car is another lie. We are sold a 5-7 year loan package. Don't do it. Never finance a car for over three years. Never take out credit life insurance on any loans. They usually fold the cost into the loan, so you are paying interest on the insurance.

You would probably be better to protect your family with term life insurance that will produce enough money to pay off your home loan and other debts.

Do not take out extended warranties on anything you buy. Most folks never use them.

Another lie is that your home mortgage is a great tax writeoff. Think of it this way. If you are in the 28% tax bracket, you are paying a dollars worth of mortgage insurance and getting 28 cents back. Pay off the home, and keep the 72 cents for yourself.

Advice given on this website is only a suggestion for you. I am not a financial planner, and I do not know all the anwers. I am just a pilgrim like you, trying to pay off my real estate and be totally debt free.

It is sad, but I have to put a disclaimer on this site, and tell you that any thing you do that I suggest is totally up to you. I take no responsibility for the consequences of your actions. You are just like me. It took you several years to get in debt, so do not expect to get out any faster. I would suggest you contact a local financial planner who can help you and monitor your efforts.

The Christian Counter