[lindismith]

This is a really good question that comes up a lot on here. There are some very good threads from over the last year, especially during the summer, with all the answers.

You would have to do a search on Piggington….

The bottom line is you should still wait. Another 6-12-18 months is not going to kill you guys.

If I can recall the names of the threads, I will post them, but you would be very smart to wait a little longer.

[lindismith]

hmmmm. I personally would not dip into my 401K to pay off the credit cards. If the house is almost paid for, then allocating what they would have spent monthly on the mortgage is what should be paid towards the credit cards until they are paid off.

The thing is, they need to be really committed to paying them off, else, they will just keep that revolving debt. They have to really want to be debt free, you know?

A very clever man once told me, ‘paying an extra 13% (in their case) for the privilege of using credit, it just stupid.’ What item is so important that we should be willing to tack on an extra 13% just to pay for it?

I am personally a huge fan of American Express. Using it is good because it keeps you honest about what you really can afford. And, they have amazing customer service. I am consistently impressed with their organization.

Your relatives have quite a bit of debt that will only grow if they do not get a handle on it. Whatever you can do to help them would be good. You may have to have the conversation with them a few times.

I believe that anyone with a little debt going into this next recession is really going to pay for it. Credit card companies are increasingly becoming more sophisticated and aggressive, and they have figured out how to grow the balances of card holders very easily. You can imagine if consumer spending slows, the card companies will still be looking for income, and increasing fees, interest, and service charges will only grow in the next few years.

Does anyone else have any ideas?

[lindismith]

Good question. Do you know what the mortgage payment is each month? Do you know what the credit card payments combined is each month?

To reduce costs right away, they should look into a very low interest rate credit card, and put the other two balances on it. BE SURE TO TELL THEM THAT IF THEY ARE EVEN A DAY LATE ON THE NEW CREDIT CARD, THE INTEREST RATE COULD SKYROCKET. I cannot impress this upon you enough.

[lindismith]

To each his own, but man, some people have more money than sense.

[lindismith]

Great post! I share your indecision, on everything. I guess that’s what makes me a bleeding-heart-liberal, sock-it-to-em-capitalist.

I dunno, I’m idealist. I wish things weren’t the way they are, but they are, so I deal. I think there’s a solution to everything. You know, the hydrogen-fueld Hummer….

[lindismith]

Yeah, it’s just that that $6.99 t-shirt at Target comes with a big social cost.

As for the oil issue – maybe we wouldn’t have all these political problems if we weren’t so dependent on foreign oil. And is the cost of a barrel really a free trade price? Or is it set by a cartel that has us by the you-know-whats?

I’m all for free trade, but I keep wondering what it means to my kids. We’ve said it so often on this board, but what is this country producing anymore? The jobs are leaving. Even the good jobs. Will my kids have as high a standard of living as us?

[lindismith]

yeah, I’m a total capitalist, but capitalism comes with some serious problems. You name some good ones. I’m not sure why we need free trade either. Maybe our standard of living has gone up because we can buy more stuff for cheaper, but honestly, I’m not sure that really raises the standard of living so significantly. My cousins in Australia pay more for clothes and electronics, but they are more content than us.

[lindismith]

The Chinese are very dependent on us continuing to buy everything they produce. If we stop buying, they will suffer.

My people in Taiwan tell me that more and more, they are looking to their number 2 market, Europe, to replace our buying power. I think that’s unrealistic though – we’re just too big.

Regarding the males, bgates – I’m not really sure how it manifests itself any differently to any other developing country, of which, most seem to value men over women. Usually you just see men in the streets, and obviously men are always in charge. I can say that when I’m there doing business though, they always treat me with complete respect, even though I’m a lowly woman.

As for us manufacturers being immature, Poway – hey, I’m just trying to earn a buck. The government officials I elected should be protecting my interests, but they’re not. Don’t get me wrong, I’m not complaining, but that’s because my business is growing. I’m not sure I’d feel the same if it was dwindling. And just so everyone’s clear on why everything comes from China: I pay a labor rate of about $12.00 to $17.00 per hour, depending on the skill. When I produce something offshore, I pay 60c an hour. When did we last pay our workers that? 1920?

The Chinese culture is very sophisticated, and very deep. I would recommend it as a must see for anyone interested in travel and other cultures. I read an interesting article recently in the NY Times about how they are investing in Africa – for their resources of course. Very smart.

Lastly, my agent in Taiwan tells me across the board, orders are down the last few months. “It’s been very quiet, Linda”

[lindismith]

It’s all so sickening.

Here’s the answer I got from my mortgage broker friend about the commissions on option arms: (I changed the name of the party to X, and the name of the company to ABC)

“A lot of brokers rip off the clients on this loan. One of X’s loan officers just closed one last week and made over $20,000 on a $450,000 loan, not uncommon. ABC Co. is a local brokerage notorious for this. The reason so much money is made on these loans is that the lender will pay the broker up to 3% of the loan amount if the broker jacks up the margin on the index to it’s maximum, therefore increasing the actual interestrate on the loan. The borrower is usually not aware of this because it does not affect the monthly payment which is based on a 1% intererest rate. The actual rate the borrower pays is the index plus the margin, which might be, say, 7.0%. The difference between the 1% the borrower pays every month and the payment at 7.0% gets added to the loan amount every month.

Many of these brokers will also charge the borrower 2% (2 points) on top of the 3% they get back from the lender which is not often disclosed. So although the broker might say he is not getting a rebate from the lender, he most likely is.

On regular fixed rate loans it is much harder to do this because people shop the rate, which is directly related to the brokers rebate. On the option arms, people don’t shop the margin, and they should.”

[lindismith]

I have a friend who is a mortgage broker, I’ll ask him about the commissions.

Ben’s blog had over 300 comments on this article. It really had an affect on my all day yesterday – I just keep thinking about how many people are in the same boat as this guy. Can anyone put my mind at ease and show me how this is all going to be ok?

This guy is only 55 years old. He has no savings. No plan. How many more are like him? Are we going to foot the bill for all these people when they ‘retire’?

[lindismith]

(coffee has higher levels of antioxidants than green tea does)

jg – will you tell me where you found that info? I am a nutrition nut, and have not read that before.

[lindismith]

I read that article, Perry. There are some frightening stats in there. And that guy profiled makes me so sick. What a complete lack of personal responsiblity.

[lindismith]

Yeah, the consumerism here is completely out of control. I have friends with credit card debt up to their eyeballs. Literally, they make close to six figures, and cannot go on a vacation, because they have no extra money. And they seem unable to stop spending. They have to have everything they see. I have one friend that has to buy something everyday. When I asked her if it was possible not to purchase something, she assured me it was, but honestly, I think she’s addicted to shopping. It’s her daily fix of feel-good. What a drug! What kind of life is that? It’s not really living in my book. Just the time spent finding the parking to do that much shopping puts me off. Never mind the complete waste of packaging, etc. I could on and on. It’s my pet peeve. As for the eating out… don’t get me started.

[lindismith]

thanks guys!

Looks like Analysisguy is adding DC to his blog too.

[lindismith]

Love those chairs! not.

Perry, we have the same tastes. Do you get Dwell magazine?

I’m hoping we have an end to Britney, Paris, and Lindsay. “They just need to go away.” (Ok I stole that from Chris Cantore on 91x this morning.)

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