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Making Major Purchases with Minimum Debt

G. Edward Reid
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Hosting its seventh annual conference, GYC's 2008 theme this was "For This Purpose." How do we find this purpose? By listening to and studying God's Word. Featuring inspirational speakers such as Justin Kim, Randy Skeete, Radim Passer, Chelsy Jourdan, Alistair Huong, Doug Batchelor, and more, this conference leads us in studying how we can reflect Christ's character.

Presenter

G. Edward Reid

Former Stewardship Director, North American Division of Seventh-day Adventists

Conference

Recorded

  • December 18, 2008
    3:45 PM
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okay I hope you were not ready to prayer I want to go through this again our goal in life is not to become super rich but to get ready for heaven so what our needs are met then God wants us to share with others as you understand so I like this when it should be our highest aim in life to get ready for happiness the volume of manuscript releases page fifty five who are sharper and then begin heavenly father I thank you today for the privilege we have of knowing you and I pray that you bless each of us as we look at these important principles regarding things that will be valuable to each of us in Jesus name amen dominant how you something just as about with a little repeat and that is it is clear in the Scriptures from Deuteronomy twenty eight one to fourteen and from Proverbs three five to ten that God wants us to prosper and be blessed you understand so I believe personally that though God me knows when you do it unless you live in a large city and can do no public transportation it is likely you will need a car so I wanted to talk to a logo in the system and ultimately to jump Sabbath because it's not too practical almost want to talk to you but you know you can lose your life over money management so not sure what the important talk about insurance on Sabbath but this one can be a little bit different than that and this was really making major purchases how you can do that this one is pretty interesting and I salute the fourteen twenty eight which of you intending to build a tower by the way to understand this is a house in the wall of the city does not sit down first and count the cost whether he has investigation whether this process because if you don't you may get you partly starting all your friends listen and laugh at you okay all major purchases require a strategy that seeks to things first of all its quality and economy in the same transact him shall talking to the scene faded and switch things where they'd have somebody go to the start is not that I have this one for the same price but as you know cheaper post of the way cheaper item what you want is a good item at a good price those two things are important okay this strategy is often overlooked when impulse buying is practiced and that I wanted to do something interesting that frequently before people get married they get the admin get the idea that women are budget bashers are going as a credit card to buy closer shoes of the offense funny stuff it is my personal observation after some twenty five years of teaching this is almost always it is the men who bust the budget is when men are involved as an airplane or mass voter of pickup truck or something like that we understand it's not just the opposite it is serious about this person really for business decision so I will just tell you that people need to work together to make their decisions I sometimes you seen this out maybe a TV commercial something about some guy that drives home in a new car video shows his wife she comes out polio whenever I would never do that I wouldn't even think about Kathy not always make joint decisions together anything over a hundred dollars we talk to each other is almost building because stuff costs a lot nowadays minimal and when not just priceless items of hundred dollars for my car is that you understand the principle there you guys are in this together and not one person manages all the money you doing together one person is not managers but you make joint decisions that's the thing I want to understand and understand okay so we're not transportation decisions first document use cars or new cars and the new muley it was a bottle if you have any question here what would it have our cars first in that houses but all I will you know this by the way the whole segment of the US car market is currently shambles right now because of the financial crisis and so on but dealers have to sell a certain number of cars each month to maintain their business and their ordering status from the manufacturer so they are ready to discount the sale price at the end of the month and especially at the end of the year the very best price you can ever get on a new car would be the week between Christmas and New Year's this is automatically true as they wanted inventory author listed familiar Stockton 's on and of course people are not thinking about buying cars and then think about buying gifts for all their friends you understand that you show up on a car dealer 's lot the swarming with thousands on a dead sheep guys is really interesting is the whole point is the US some homework before you get there so you know you're getting a good deal but in the meantime when I talk about things should use of our new if you like to trade cars often by the late model used car will keep his things and less depreciation but if you keep your cars for about ten or twelve years or more you may wish to purchase the best price new car by the way if you buy a new Honda Civic agenda for twelve years it will pay for itself twice I went all out in the book you will see that it is very very important understand when people buy new cars a solid majority is having a new car than you been a lot of depreciation as you know anyone will get into this hobby averages are the United States sells for about ten thousand dollars in Americans spend over a hundred billion a year to purchase more than twenty million used cars I'm there to show you in just a minute I think it is personally to your advantage to buy a new car if you can afford it but in the meantime I will tell you every here scar that is for sale is for sale for some reason this venture now might be the man's wife are divorcing major salary that having a baby and then only if the you are whatever you should figure that out because most people get out of the sums wrong with it I'm telling the truth about this a little look in just a minute to hear them see this here's the deal appear new-car dealers there's a place you can buy used car they supply the supply usually comes partaking in this trade and for new vehicles warranties are often better than the cars generally have lower mileage the other car sellers of this is on a new car dealers used car lot of the narrow used-car dealers most of the cars that used car lots come from auto auctions where dealers go there anyone dealer 's license and I myself that no one can get rid off typically these cars are generally older and have higher mileage they also think some Carson and poorly maintained they at least get it for some reason and then there also another third source private party vehicles can be a market defendant maintained and they are a nightmare if they're not I would tell you something interesting I traveled on New Hampshire Avenue every day to go to the General conference rival Oakland A's and I'm home and there is a guy that sells cars in his yard he is right on there is never more than one car there cited by the sauce things as his car that he's selling but he buys them from other people 's cells and their GM no idea whatever of that car was what happened to it whether somebody ran an oil dry and engineering geologist filled with STP are some who knows the understand the whole idea is unless you know the history you should what's this caveat emptor buyer beware you understand that's the idea now relevant a couple of others here most used cars in that a new car dealerships are sold as is they even have a sticker on them I says as he has was that made if anything is wrong with you just bought it even is and the seller assumes no responsibility for any needed repairs regardless of the need for all claims by the seller did you hear what I just said now listen I'm telling you as an attorney in less kids in writing when you sign the contract you're not going to get free service somebody will tell you almost anything to make a sale you seem to understand that okay regardless any moral claim so if the warranty is mentioned you must get it in writing that's important another one is inspections a good idea when I was younger when I went to high school Academy everybody all the guys to go on mechanics and you learn how to change a tire and I don't believe that the engines apart and rebuilt and is on an auto classifieds but nowadays cars are so sophisticated with computers and everything the average guy can only do like rotate the tires and change the oil was about all he can do everything else is the only really know what you're doing one of the I think there is that we tried that earlier would you try just a little bit into English what it does is it seems that what we need to do is to move that speaker farther back I think but anyway didn't just push up to the person maybe that can go back to the low back and that will help a little bit okay there's actually three seats on the front row if anyone wants to come all the biographies of the Adventists closed Tuesdays the sky of your interview seat away all of a sudden appeared to raise your hand this don't get better and better so if you don't hear well and I appreciate you doing that there's Tuesday's appearance and she's right here that you can come again okay there's also one that here by the way I'm really thankful you're here and I sorry that I can't in all get better out of this there's only one speaker that's the problem but it's in the book is like tomato sauce in our spaghetti sauces in there so anything is all about sex all the quotations in their so you'll be able to get it okay I was promised legal of Atlanta but only half of the the idea maybe that will help a little bit in the market that help at all with Internet a little bit okay alternative project will be stronger as well so what I'm than using Verizon these may be deceptive a rusty body may have a well-maintained engine inside cleaned John yesterday concealed a major trial of drivetrain problem by the way many cars are showing up on the market there were clear underwater during Katrina and that could be a very serious problem if you lack are like that so what you have to do to find out what it was like that because they seem to think of everything you can pick up the carpet smell underneath and see what's in the saltwater review is all kindly stuff but there's no no warranty so you haven't trained and trusted mechanic of your choice to check out the car to estimate the present condition and to determine the cause of any repairs that might need these are important things for you because there is a need to have transportation of all here's what the factors that influence the price the number of miles the car has on the features and options and the age of the car is pretty interesting you can find the price of a similar car in the newspaper in car lots on the Internet such sites as Edmonds used cars Consumer Reports this camping should find most people are very savvy today the answer to the ER caffeine are remembered as recently when we know there's been some common with one or less carbon anyway when I went in there typically a carcinogen cannot talk to you once you know the aliens go back and check it out with the sales manager so I will tell you deal with the sales manager start with and then you have a problem but anyway they'll typically check out all weekend and that young could you do this whenever but I'm just tell you something very very interesting when I went to buy a car of something that assessment talk to me and I heard him I told him what I was willing to pay for the car he went back to his sales manager he said your price on the Internet and I heard them say that so again there was Internet price was pretty amazing they typically don't I think they're much more easier to sell now as you may know but anyway what about new car decision to buy new car should never be based on impulse or emotional need is that it should be based on your transportation needs and your financial readiness Summit talk about that one she determines your research was model car you want to purchase you can check out the available options for that model on the Internet come up with a ballpark estimate of the price that you expect to pay the sticker price which is on the window is a printed form usually posted on the side of the vehicle for the suggested retail price if you are unsophisticated let me just tell you as an attorney I had a family come to me that were totally unsophisticated repurchasing vehicles they were immigrants from Central America they went to our dealership in Atlanta Georgia and they were sold in a band a passenger van it was not a camper van Jason Winslow site for the full retail price on the sticker in addition they charge them when we try to think what we call this no-no in various markups for it all different things but they also charge them in insurance and independent insurances is a definite gentlewoman credit life insurance at some two thousand dollars is incredible and do it additional payments so they drove to Arizona and back to visit friends when the first payment came in the mail I realized he could make payments that you know what to do and what they did they drove the vehicle to the bank to finance the loan parked it and put the keys in the night deposit box that was in there for them they thought was given back to you but become him or suing them for this extra money will I was able to improve the range of the undue advantage of these people and so they really think the carpet without having to pay anything but I will just tell you something incredible thanks again most car dealerships do not love you as you is I'm telling you the truth for your own benefit is okay the dealer 's actual cost or invoice prices an amount less than the sticker price by considerable for most cars the difference between the sticker price in the dealer 's cost is the reins is available for negotiation now there are some car dealers that do not negotiate with you Saturn is one of those they does price or by present price but most dealerships expected to enable even by way of Ford has recently had all their cars in the Maryland area eight thousand dollars off the sticker price which part is this is incredible really because they're so desperate to move the vehicles by the way most of the dealerships have what's called a floor plan thing that they have to vent all the cars and credit in their paying interest on their credit loans for these cars the whole family sitting on their law and so it's really important for them to move the cars as you know so Edmonds Consumer Reports and Libra 's bookstores can give you ideas about this so buying a new car you can use the dealer cost information negotiated deal that's only a couple of hundred dollars typically over what the dealer paid for and are not to mention a moment and tell you this please understand that the Bible indicates that Christians should be wise as serpents and harmless as us so what I want to show you now is not at all deceptive it is just being smart and here is to prevent confusion in determining the true price of the car the dealer is offering do not mention that you're going to trade in a car until after you have set the price for the new vehicle do you understand what we mean by that him him how much he will give you for your car based on the price and then you can understand that is really not to give you anything for your most families take your car in your better off selling them in the newspaper to a friend or whatever if is the now well-maintained so I just say if the price is not acceptable you sell the old car on your own or even given to charity does everyone take you for it anyway don't you guys have place where you are we live in and you use cars away inelegant your receipt for your income tax young Catholic okay now to avoid death especially long-term debt to the purchase money from your transportation savings account so let me just give you this anybody who has a budget should have a transportation line item and let's just say that you're making payments on car and it's three hundred dollars when you your car off while you're still driving the rest of the good out of it what you do you'll be doing during that time putting your three hundred dollars in your transportation account so the next time you go to buy you can pay cash for is very simple and you can easily do that if you would be willing to do it however what most people pay off their car guess what they now three hundred dollars free so they trade their current starting all over again or they start spending on something else but if you have a transportation budget you'll understand you should have a savings budget just like you transportation budget he left money to pay cash for your car by the way most dealerships will is will try to persuade you not to pay cash for your car I actually had a nice salesperson tell me what would be a Toyota Avalon is one of our cars when they bought that car the dealer said how either pay for this we have no display of this letter despite of this plan or you could lease it should never lease a car is an individual I understand that talking about it just went on here but I'll just tell you this is really really valuable to know Daniel was still three years at two percent or neo- whatever it is and by the way if they don't tell you the number of years it is almost always six years now which is really really interesting but I'll just say what what about paying cash I'm just trying to write a check would be okay he looked interesting status money guys are back together he said why would you want to spend all that money on a car to put that money in the stock market just be making lots of money and what I said was because I like to sleep well at night and if I'm debt-free is a whole lot easier that way okay I'll let me back in just seconds if you don't have enough in that part of your budget spending plan then you need to borrow the balance but eventually was student loans it is always to your advantage to pay as much as you can not get as much financed as you can be using the same as you pay it off and that's really important to know take any remains the car dealer offers you and get your own financing said taking the low credit rating getting no rebate it is always your guys opinion rebates and not take low interest is if you take the low interest two percent one percent whatever the event of a much higher amount for the car under this is what I just described you under ideal circumstances when you car straight off you should put the amount equal to the payment each month into your transportation savings account so you can make cash was time to replace all very interesting another one is this is just dust off and that is if you plan to ignore a lot of them take care of it this is very very valuable to me even if your lady you don't get on your current change on you can drive the Jiffy Lube or someplace and change whatever starting to do that oil changing is the number one value to anybody with a car keeping clean oil to get the full mark him for selling in June two thousand miles in fifteen years it is a mismatch is what he originally spent on the car and save as much less important what about leasing a car here is what I would get a losing is a contractual agreement with monthly payments for the use of an automobile over separate of time typically two to five years at the end of the lease term the vehicle usually returned losing organization however three reasons why you shouldn't lease for twelve no ownership of the vehicle in spite of all the money but including a down payment and paying for three years you have no equity in it at all must meet the requirement some of them doesn't qualify for credit and you may have to pay additional costs like over mileage allowed away most of them have twelve thousand miles on them on a lease and very few people drive less than fifteen thousand and eighty five cents a mile for every mile you are over your allowance don't this is really bad and stuff and has visited Japan and also try to return the car early this is really a headache in addition if you moved to another state you have to renegotiate the whole thing it may cost you more in Vietnam were going in housing and this one is very very interesting so let me just ask you out let's try to describe right now and ideal housing arrangement that I wanted tell you what is an ideal so you can begin thinking and is an ideal would be if you lived in an apartment building and yet people below you and about you when a full-size view all four of your neighbors that like to play loud rock music on Sabbath that would be ideal housing when someone is an ideal housing arrangement if I have an idea single-family home I like that the Bible says when it is very what you gave his father mother and started his own house very important okay him and anything else fortunately ideally in a rural location possible I know we don't live in an ideal world by what I told this to people four times in New York City after 9/11 I think the more smart church in the Bronx and Brooklyn N other churches there and I just say I know we do not live in an ideal world if we get people would not be cried the other large cities it's really important on okay then anything else else why has lots of good counsel one of them is on high ground I can tell you there is an attorney whenever we do a job titles are jointly help someone with a real estate closing all plants now in most states the state must bring on them if they're in a floodplain many you know the flooding in the Midwest that we have an alumnus of the river couple years ago there was CNN a young woman was doing interview of the man's house that he didn't just have water in the front porch his whole house was underwater although sticking out was his TV antenna the drivable Red Cross top 's house and he said this happened to me three years ago also and in his reporter said what I just sell out among the high ground what was his answer I would buy my house you understand that you have to clean it all up again and start all over again all sheet rock on the carpet no one stopped to shop just a total mess so high ground nobody talks about high ground now what do one other thing and this is important when one talk to you about it paid off this is directed ideal debt free no mortgage why would you know what houses cost so much the only reason houses cost what they do is because credit is available if you could not borrow money the average house was so less the disaster in Israel is neutral salmonids are you something really after we have to deal with reality I know we don't live in an ideal world I want to show you some things that will be very very valuable to you by the way I always have people come to visit but my CPA said I shouldn't pay my house off because I need the interest deduction if your CBA Calumet what time is a time to get a new CBA because it is not good business sense to spend a dollar to Singapore they understand your best deal is having your house debt-free if possible and certainly my retirement time but I will just tell you up by NSS is better than renting it will be able to see why a few minutes but renting what's the problem with renting here you don't have any ownership interest in the understand is not sinful that you understand that in their certain circumstance when it should be probably appropriate to reload Outlook here are some of the advantages to renting mobility no hassle trying to sell your house when it's time to ready to move another one is your responsibility as the owner handles the maintenance of property taxes and casualty insurance fun with your renting you should have some kind of insurance was passionately renters insurance is anything of value what all is not covered by the homeowners insurance that the landlord has yet have your own insurance okay but when another person passenger in one of the brightest one about life insurance didn't Alan White said we should buy life insurance community or that while the real interesting thing is that the days of Ellen White when she wrote that about a teenager the year nineteen hundred insurance comes in America were almost total shams fraudulent people Windhaven months and months of last year 's interventionist policies injured person dies their family gets six as the session recording that this incredible the bottom line is she did encourage a casualty insurance life fire insurance on your home and so on by the way if your house burns down and you have to provide insurance that insurance pays off the lender first you understand so you there's there's various ways to overcome risk management and runtime to do this afternoon on the show you another one is initial lower cost than getting into a house or apartment when you may typically I don't know what is wrong here but most of time is too much rent one month deposit in one or whatever but the fact is you have to move out you know with everything in order you lose that last month and so there's other things but blended rendering is probably the best option for these kinds of people those seeking temporary housing those who don't want the responsibility of homeownership but listen carefully you have me one of those persons in Time lesson you retire when he will be still doing renting and those who don't have sufficient savings to make a down payment on a house so I'll show you when you're ready to buy disabilities of renting renters don't enjoy the financial advantages that homeowners do what are the financial advantages of homeownership first of all appreciation of the property itself another one is you get tax deduction credit for interesting debate on the whole mortgage on your income tax is not true and you building up equity in the property typically that will be very valuable by the way in the recent economic turn down house in some places it lost in the twenty five percent for most people and editors only make money when they sell her house them against killing like they thought they were going to do understand this it was better than renting that that's the whole point okay eleven to see what did I miss anything there tenants can deduct mortgage interest and property taxes or benefit from home-equity okay now there's so that people can buy and that's a single family home which is my personal opinion is this ideal but multiunit dwelling like a duplex renting out house or condominium cooperative housing manufactured home or mobile home and my sector was able to find a mobile home just getting delivered at somebody's house and I will tell you something interesting it is called a mobile home but I will tell you ninety five percent of them were never designed to move more than once investment dealers by state your place you will find the truth about the serious evil one across America what it would look like on the other into the trap that is this is not a travel trailer is just inside a roll to your place can be set up there okay three important considerations it may lose value over time making them difficult to sell or a single house or a customhouse will typically increase in values mobile homes typically decreases value in addition financing may be difficult to obtain I counsel with a couple of been paying twenty years on a mobile home in one of our candidates recently and they still owed more than I paid to start with you as it was set up in such a unusual financial way but typically it is about fifty percent more than what you'd pay for a conventional home interest wise like to get a six percent you pay nine percent from a while and then of course I dismissed this poor construction quality there are different levels of quality as you may know but the fact is uneven in general terms are not designed to move so buying a home what should you think about you may not get all the features when you buy your first house those are called a starter house but financial advisors suggest that you get into the house market by purchasing what you can offer for now what value something interesting would you like another had a house I live in and maybe of interest to you because people think well you know you're all close to retirement age here and turn any of the him with the same last four years all that you probably have imagine what I have is a Ryland house that has blue light blue vinyl siding on the outside by the way of the habits of this favorite of yours you should tell God in prayer before you get to heaven this is not meant to be used out there I don't think they understand not light blue anyway but that is what we could afford only moved to Maryland because the properties there were twice as high the cost of buying a home is where we had lived in Georgia and Southern Union before that do you understand to you by what you can afford to pay off by God 's grace is increased in value because of inflation in the time we lived there so were not always letting our house but even then I can say as you move up in the housing market your second or third home can include more features that you want now here is going to be a great shock to people and that is you are ready to buy a home plan your debts are even paid off or under control this is the one it's really hard you have twenty percent down payment I would tell you something interesting almost all of the homes that are being foreclosed in America had either no down payment or five percent the people upside down it was little more than they're worth you understand it's really really incredible so another one if you have I don't know if you have nothing to do this but if you have twenty percent down payment you have a private mortgage insurance and that's a big big deal it can be read typically twenty IL one percent of the value of your home each month which is really pretty amazing and if for example a typical house in at least three or four hundred dollars that you pay each month by the way is private mortgage insurance but it only pays off the mortgage lender should you default on your home and he went off so if you were under eighty percent of you know how popular finance charge that means that you would not have to pay private mortgage insurance armholes after a whole section of the book about that you can read about and then also you have to know even afford the monthly payments and by without would include taxes and insurance usually not more than thirty five percent of your gross income in the past mortgage lenders would look out after you because they would ask you to present a balance sheet to them at a budget to them and they would not let you borrow more than thirty five percent of your gross income per month you know the payment would not be more than that amount many of the subprime ninja loans that were sold by mortgage lenders in America in the last four years were more than fifty percent of the monthly income of people who are making payments absolutely incredible you never been given the beginning but the fact is they they are people having all pass problems so what you do due to severely embedded home prices are set a few options if they want to get other than a traditional home mortgage for either fifteen or thirty year mortgage and then I got the plan to accelerate the payment of the mortgage by preventing the principle that's why we show you now can you find this to be very very interesting I will talk to the private mortgage insurance anymore let me just see here I will then go on to something different okay I will show you this one thing I generation ago it wasn't possible to overload on a mortgage because lenders didn't allow you to do it when we get it when I demonstrate you can can be capable however in recent years lenders began issuing unmanageable mortgages to people and by the way research has shown in the courts of America that many of the loans were made to people that they knew couldn't make the payments and are doing a cold loan to own in other words they would spend all their money they could make the payments the down payments was on the company would sell it to somebody else is anything against them so let me to show you one study showed that people who make down payment of less than five percent of the purchase price of their home are fifteen to twenty times more likely to default the note to put down twenty percent or more I don't think I've been spent this is something I talked about they own the loan situation lenders found before closing can be more profitable wasn't exactly collecting monthly mortgage payments and is really crazy okay what an unusual e-mail how to pay off the house I'm not suggesting that anybody go out and get a long-term mortgage financing if you're involved in a mortgage of your cop played by here's the way to doing real interesting remembrance of big decision because this is based on the fourteenth gift account the cost is either able to afford it remember location is important remember location location location is not just high ground is in an area where the resale value will continue to be up in one of my biggest asset the subdivision of minor subdivision was going down in value now we talk about the thirty year mortgage this is the typical mortgage in the United States thirty years by the way you can now get forty year mortgages in America when I gave a seminar to a church camp meeting was on one of our Academy campuses I was given the seminar in in a church on the campus spend four hundred people there a pastor came to me after the services that I wish you had been here just two weeks ago and I said what do you mean he said Leslie 's numbers now I'm sixty three years old he said and were constantly retirement at age sixty five we the pastor of a certain district and we like the area so we have built our retirement house there and two weeks ago we signed the mortgage for a retirement asked for forty years as a healthy sixty three years old and now you would think people would even loan money for that I had a lady in my office is seventy years old and she still owed forty thousand dollars in student loans she had gone back in midlife to get a Masters degree in social work and she got some alone that would provide not only the interested tuition but also living expenses during the time that she's not going to live long enough to pay it back in crocodile at any rate when this man told me at a forty year mortgages a sixty three by the hundreds really lives only pays off that anyway as a counselor you're not supposed to appear shocked by anything I know I was shocked and I say a shot but I'm sure he can tell what is my general attitude that I knew this person so I said to him what were you thinking about will be in heaven enjoy if you plan on your house is the more interesting thing however is listen carefully to what I wanted to do next several people are talking about this in the breaks today already about borrowing money to get into the cause of God that is not biblical it is not from the spirit of prophecy it is very very clear if we have excess property we can divest ourselves of some of the assets and put the money in the cause but listen carefully somebody once said to me I've got this wonderful idea why doesn't everybody get a line of credit on their house you don't get all the money they can out of their equity why don't they mess up a lot of the credit cards and put all that money into the house of God within them are those of the devil and the way the heavens that he didn't care what is wrong with that picture well first of all is responsible but more than that remember there's a time between now and the second coming called the time of trouble that was never was like there was a nation you recommend any little chapter verse for the people who were indebted to the worst but during that problem a lot to go to jail did you hear what I just said I wouldn't tell you why I think that if somebody sues you for any debt you owe them and you still don't pay them then they're in contempt of court and could actually go to jail you understand at a time when you are someone you want to get free anyway you understand it's very important that we understand okay so I went to a difficult situation we have about fifteen more minutes only going to do this really valuable stuff on here this lets just say the young couple gets married and they decide we should buy a house this is renting in our early years and so they do and they buy their first house there's a term of art for this call a starter house is not your dream house for any stretch of the imagination but it's what you can afford then so they can magnify their starter house start making payments on it they start their family and they send their children through the old raisins in the preschool years in the elementary school Academy and College bitches get married you leave home start families of their own water mom and dad is doing in thirty years all I can happen so they are still paying on their starter house right anything that's typical don't raise your hand it isn't because very few families keep their starter has more than about eight years if that law then they say what what we got married this was all we can afford but now is I particularly like is not near the church not near the mall whatever you sell this house and we went on the tour of homes where we found this home that we like to buy that one is safe intimate by another house for thirty more years and so on and so on you see something really amazing in just a matter so what I would tell you many families keep doing that as some of them are still paying on their house when they retired we should never have okay I know you can't see this in the back so it is in the book but I'll just tell you really what it is it's just compared to families to them so was the beggars and the others the small investor last things that is just how they made once all got seven-year plan was doing a conventional thirty year plan and of the Gosplan is a vast understatement as Internet story okay now I want to show you something called an amortization schedule when you look at the book there's one in the year and most people would not even read and they just turn the page but if you understand what to show you next it is absolutely amazing how quickly people can pay off their house if I understand how to do it solo show you some things to think about whatever you borrow money borrow as little as possible and I was come up with all the cash you can then you make the payback term is short as possible not as long as possible I talk to people even today about student loans understand something interesting some student loans the rate of interest is higher than all mortgages right now is absolutely true and you can stretch those out of people me neither but I'm talking about over eight percent this tell you and now you can advertise it on over thirty years now what I told you yesterday you constantly getting married ask your chosen one what their student loan level list because of you marry that person he disinherited the death this is important not that she would marry them would you go into it with your eyes open you understand that's okay another one what you see the new Honda Accord two ninety nine a month this in your local newspaper it has him tied with total prices and women today who doesn't tell you that I want you to know either of them for six years this is interesting but on this value be wanting payback term shortest possible also have a fixed rate of interest by way let me just tell you this is really really incredible I'll try to describe it I don't conclude what I would illustrate this most of the ninja loans in the subprime mortgage people were told by brokers we can get you financing for this house but when you actually go to the closing bell safe will send you have a subprime mortgage which means that you don't have the credit rating that would like to see you have and you're also doing less than eighty percent in all are more than eighty percent less than twenty percent down payment you qualify only for a subprime mortgage the realize that many of the subprime mortgage people were paying twice the current interest rate that will be like twelve and a half to fifteen percent run in six and a half percent in addition the companies were charging them variable-rate interest so if I have a hundred percent loan at a high interest I can barely make the payments and the like the legitimate income so it's like standing in a swimming pool in the high-end and is flat the whole way and always sticking out your nose and if that's all the sick and out how much would it take to drown you a free hatchway when your dad is that your and for free and slave is when you're mortgage rate adjusts I have to percent your dad you just can't make it yet the file bankruptcy it will often leave your house is just incredible and all the money you put in for closing costs and all that stuff so I'm just going to have a fixed rate of interest be sure there's no prepayment penalty for prepayment penalty means that most will you loan money getting someone pay them but they won't give the money to get the interest so they have no prepayment penalty sometimes which means you pay off early is a big part of the interest but you want to make sure there's no prepayment penalty self that needs to be in your contract you can print this off as a interest okay another way to avoid personal sure that's being upside down alone shop for the money do not purchase credit life insurance would you like to know for good reasons not to purchase credit life insurance here they offer is one you have to die to win your share when I thought about it you die the mortgage is paid off and you have to buy if you get sick and can't work or you lose your job this credit life insurance help you know you have to die to win by the way if you are the breadwinner of your family and you have significant gaps like your home mortgage and student loan or whatever else what kind of insurance should you have a simple term life insurance policy that will pay the full face amount and that leads me to the second thing credit life insurance is declining in value with every payment if you have a fifty thousand dollar credit life insurance policy for your expensive car or whatever and you made all three fifty not up to sixty payments that you die you never get fifty thousand to your state they just give them the last payment we understand is this incredible relay and nothing is is that specific you don't have fifty thousand all you have is for one Sylvia ten Dan life insurance policies would you need ten of them in addition is the most expensive insurance sold in America but every time you buy something on credit they want to sell you credit life insurance and you think you're wise because you did the best thing to do the simple term life insurance policy because since it's so expensive they want to send it to sell it to him insurance agent makes more money from that can interest than any other products that they sell to those reasons not to do it so you know what you're doing now I'm initially one interesting thing I know you can bring this never happened on this tell you that if you look at a sixty thousand dollars mortgage payment six hundred seventeen dollars a month for thirty years you actually pay interest only a hundred and sixty two thousand dollars in interest is almost three times the cost of the of the loan to start with but if you get just one thing different and that's got biweekly payment that is if your payment is six hundred seventeen dollars a month if you pay half of it every two weeks guess what would happen you would cut the life of the loan to nineteen years thereby saving yourself eleven years where the past payments and he would say is nearly seventy thousand dollars in interest is always that one guy that of course this is interesting and one other thing if you get a fifteen year mortgage payment would be seven hundred twenty dollars a month and says something stuff like a hundred and three dollars more when you pay the loan off in half the time and savings of ninety two thousand interest that you never have to pay when I was showing this and I really apologize that you and that actually brought this up in this thing is we can get in the revenue but I would explain it to you as in the book this is an amortization schedule this is a computer printout of the sixty thousand dollars mortgage I know that's not commented in a much more than that but this is an illustration with two hundred thousand dollars mortgage in the new book but this one the night was all jointly if you pay by what payment six hundred seventeen dollars a month the first time you make a payment of six hundred seventeen dollars six hundred built in the bank for interest and you only reduce your loan by seventeen dollars which is part of a tank of gas or a large pizza volume put on your house now the interesting thing is what do you make the payments the number of the payment that is one to three hundred sixty the interest that goes to the bank and the amount that you reduce your loan and what you still always what this last column is here I wish I do something amazing I said to a young couple at a seminar like this one have you guys ever thought about doubling up your house payments and delays and she's very maybe she's a gallery what do you mean we can barely make our six hundred seventeen is not what we did in twelve hundred thirty four but I said don't you understand that when you make any house payment you can make the next payment for any of the following payments and make principle only make the whole thing just what you mean I said when you make your first payment of six hundred seventeen you can only interest is derived that if you have another seventeen dollars available right then you can make your second payment and save yourself five hundred ninety nine dollars and is that you never have to pay an interest payment is number three know what I'm assuring that can be really really amazing I usually tell people something interesting and that is Kathy and I had a yard sale we were in our debt reduction mode and we made two hundred and forty five dollars in your clear from the range one sixty five that we've told our kids that if they help us with the Taco Bell got envisioned legal sovereign drinks brought for my family and window two hundred and forty five dollars and so I went to show you something amazing hair if at the end of the first year I've made all of my six hundred seventeen dollars payment I fully reduce my loan by two hundred seventeen dollars in the next seven thousand one hundred and eighty eight dollars and I still than the nine thousand seven hundred eighty two dollars but the best month I had a yard sale and sold all of my shock and I netted out to a forty five dollars if I added that to my December payment being careful to note this is you will you understand what I is accomplished I hate all of next year 's Russell payments at one time for doing forty five dollars and I save myself seven thousand one hundred sixty dollars that I never have to pay is incredible enough by the way the interesting thing is some of the calculators on your cell phone divide two hundred forty five and seven dozen and sixty angles twenty seven times that is two thousand seven hundred percent return investment in one day in addition I will tell you this there is no better and no safer investment of any kind that investing in your own debts this is very important for you to know your goal in life is to become debt free including your home mortgage now it shows something else Mister Stephan this is because it is Christmas time my mother-in-law bless her heart for many years would send Kathy and me gifts and is used to send this actual stuff like a shirt or whatever power shovel charge whatever the way later she started sending us hundred dollars each and so I know I buy a lot of gestures as once I would say why went to Penny 's and I found me a five dress shirts on sale you right after Christmas and never twenty dollars a piece whatever and I've got myself five new dressers thank you so much when I learned this I said to her thank you for the hundred dollar gift and writing Christmas time I was able to put on nineteen and nineteen and nineteen at nineteen and twenty goes up the cystitis ninety six dollars and change don't ever give the bank just a hundred dollars to you what you want to add up to the exact same scenario for under a hundred dollars I was able to make eye payments on my house shortened alone by five months you understand and if you add up the interest that I say there is five ninety seven times five registered six hundred dollars six thirty I save myself three thousand dollars and resume filename is on my house for my Christmas money when I think my mother-in-law she then says that my boy is your cat is more done telling you you can pay your house off very fast if you prepay principal not going to tell you a bunch of disclaimer share you have to make at least one full payment every month is a really understand because you have to pay the interest is due from the last time but you can make as many additional principal payments as you can afford to add any time as long as no prepayment penalty Muslims do not happen but you can see that it has very very valuable for you to know that all of this to something interesting would you like to know how you can make a years worth of house payments in one year without spending any more money than you currently spending without invaluable okay here we go the first one is negative twelve regular payments you understand and then you can have a yard sale for the principal amount of next year 's payments some years ago now two years paid off Brian now look at this interesting part if you've ever heard about IRA like a individual retirement account is more now but typically over the years you can put two thousand dollars awake tax-free guess what if you put money into an IRA which is a tax-deferred instrument you cannot draw that out until your existing iron half with access of these exceptions unless you pay a ten percent penalty and current interest on it you understand this is amazing current taxes I should say this guy current income in the earlier drawdown it is very interesting so allow if you have an irate what kind of interest would you be doing right now one hundred ten percent these are fire Re: well I show you something incredible if you have this is your amortization schedule you can start right here in your three twenty two this was an adding machine has a paper Texas Renaissance is putting out stuff that you can do twenty one twenty two twenty two twenty two etc. Dell all lease payments you can do until your total your subtotal is two thousand dollars I say pay the taxes on the two thousand twelve the money on your home mortgage because if four two thousand and eight alone your paper tape will show that you just paid six years of house payments for two thousand dollars and savings of forty two thousand dollars of interest that you never have to pay why would anyone put money into an IRA if the soul of money on their house the understand is to your advantage to become debt free now remember some banks are unscrupulous did you know what I said some banks are actually less so when you signed your name for your mortgage they said if you intend to prepay any of the principle we want you to let us know in writing and by the way there are many people now clamoring for the seven hundred billion dollars bailout fund to help the people are really needed not Catholic and million-dollar salaries but you know what I can tell me if I have a mortgage nobody actually knows where my mortgage yes do you view yourself as it has been sold so many times among over so many things and so like the remedies back and forth so no one even knows where it is the estimate is incredible but the fact is what I want to show you here is some banks are unscrupulous so if I were to send an extra check in for principle to my local bank assuming they were holding the mortgage the branch manager would say to the all images grab will you miss a race on us and check for this amount what do you think he plans to do with it at every last one of them would say now that you do want to bring this principle on his mortgage but since I didn't say it in writing they will put it in my escrow account for taxes and insurance even though I don't need any money there any do this but let me just tell you the only writing that's needed is not a place where you sign your name right on the left side of the check there's called the memo line just right on the memo line extra principal for loan number so-and-so and that's all the writing is required or if you have a coupon that a lot of the new lungs of coupons this is extra principle you can write the amount in there but I wouldn't just and fifty dollars or hundred dollars whenever I would take a calculator and add up as many extra principal payments and set into the sand so you'll know there's an amortization schedule where you are in schedule is important enough okay my goodness sometimes I wish I was requesting quotations and I'll save the closing prayer literature who now is this disease that is the one concerning Christian financial concepts and ground ministries is my strong conviction that becoming debt-free including the home mortgage should be the first investment goal for nearly young couple or person once you've achieved that goal then and only then should you invest in other areas this is not since I was investigating me in the stock market when you know a lot of gaps Ellen White said had Brother and Sister Bateman economical managers denying themselves I could hear this about a home of their own besides this happening to draw upon a case of diversity this is the madness on three ninety five and that she made this interesting statement we are not concealed the Stern if our neighbors build and furnish their houses in a manner that we are not authorized to follow what you think that means is keeping up with the Joneses a lot of people don't realize it but some people living on the earth are not planning to go to happen is that was the case and they wanted to mention it would better build a here right and understand that we have evidence or the building is nice to have so many comfortable housing but we don't need mansions the something holdings don't get burned up that's important and how they will ever presently of questions I'll talk with you briefly afterward heavenly father one thank you for the opportunity to share this information will help us to be wise in regard to the management of the funds even just to do each of us negative blessing is very honest and bless this home organization meetings that are going on here with your spirit Andrea Jesus name it will this is my audio receivers generation you would like to learn more about you might think the government and the life that God will work like this one from the online service www. audio versus nonwork

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