$150,000 borrowed at 6% for 30 years = $173,757 in interest expense and a monthly payment of $899.33
$150,000 borrowed at 6% for 15 years = $77,841 in interest expense and a monthly payment of $1,265.79
You increase your payment by 40.7% percent in exchange for paying the loan off in half the time and only paying 44.7% as much interest.
In reality it would actually be a bit better than that because a 15 year typically has a lower interest rate. As far as not being able to afford "as big" of a house, I'm not into the whole McMansion craze. I just want a roof over my head. If I can't afford it with a 15 year mortgage then my attitude is that I can't afford it period.
Prices are low now (relative to a year ago) because risk is high, revenues will almost certainly be very low and the market mood is pessimistic. Only time will tell if prices were undervalued (cheap).
Risk is always high with equities. They are the riskiest investment that most people will typically make. They also have the highest potential for reward.
My 403(b) is filled with mutual and index funds. Some of them are down >45%. I don't care. I look at it as an opportunity because I'm picking up a lot more shares than I otherwise would. I'm 27 -- if a mutual fund containing thousands of American companies in every conceivable sector hasn't rebounded in the next 30 years I'd say we have bigger problems than our nest eggs to worry about. At that point we'd probably be burning greenbacks to keep warm.
I've also started buying individual stocks. My philosophy with them is to look for companies that I think are undervalued, preferably ones that have a long history of paying dividends. The dividends go into reinvestment (i.e: more shares) and give me a better rate of return than I'd get with most cash investments.
I'm actually breaking even right now -- a few of my picks are down and a few of them are up. I'm not putting any money into it that I can't afford to lose (lesson #1 about investing in stocks) and it's actually kind of fun. Considering that the average American gets to find new and creative ways to manage their debt (who has a 0% balance transfer offer this month?) I think I'm already ahead of the game. It's a lot more fun managing your investments than managing your debt.
Speaking of, that's another thing that Americans need to learn some sanity about. When I buy a house it'll be with a 15 year mortgage -- the payments don't double but you pay off the loan in half the time -- what's not to like? I have zero credit card debt and will have my car paid off a year ahead of schedule. I'll probably buy my next car with cash -- only way I'd finance a car again is if I qualified for a 0% APR loan.
Our intentions were good, but it took 6 fucking years to get Afghanis to publicly condemn the murder of schoolchildren by muslim lunatics. At this rate, we might actually stabilize the region in a few more centuries, by then the almost-millenia-old islamic schism might even be healed.
This is gonna sound cold but I really don't give a shit about Afghani schoolchildren or women. I give a shit about seeing a Government come to power in Afghanistan that can keep their own fanatics from flying airplanes into our buildings. I don't believe that such a Government has come to power yet -- hence we need to remain there.
All the talk about building Democracy really kind of misses the point, IMHO.
considering that on average if you make it to age 60 you will live to be about 90
Nah, I'm an American, I don't have to worry about that;) Kidding aside, your point is quite valid. I shouldn't have said "most" -- what I should have said was you'd be a fool not to have enough of your nest egg in cash to enable you to ride out market downturns without having to cash in equities at a loss.
A basic rule of thumb that I've heard is that you should subtract your age from 120. The result is the percentage of your portfolio that should be in stocks. The rest should be in safer investments. A less aggressive approach is to subtract your age from 100. It's obviously an oversimplification but it does demonstrate the need to adjust your risk tolerance as you get older and presumably closer to retirement.
say 30 thousand assuming you live really frugally in that first year of retirement
The general answer is that most retired investors need their portfolio to generate a return at least equal to inflation, over time. Historically cash has a negative return after inflation and bonds are maybe break-even at best
True dat. And I didn't say I'd have it all in cash. But I certainly would have had enough in cash so that my retirement plans wouldn't have been affected by the recent downturn.
I was already concerned about his wanting to send more troupes to Afghanistan, but now this????
Umm, Afghanistan != Iraq. You do remember why we are over there, right?
The government always needs a boogeyman to keep us off-balance. The cold war with Russia carried it for a while.
I don't think the populations of the countries that were effectively annexed by the Soviet Union thought of them as a mere bogeyman. The Cold War came about when the Soviet Union refused to honor her wartime agreements and decided to annex Eastern Europe. It didn't come about because our Government needed a bogeyman to distract the population.
but this demonization will only hurt relations
So we should turn the other check when they oppress human rights and just keep doing business with them as usual?
Also, keep in mind that China already has the US by its financial balls in a very assymetrical fashion, and I'm not sure what that would portend. But it does give China a lot of leverage over the US.
How do they have us by the 'financial balls'? They could dump their holdings of US Treasuries and pull the rug out from under that market -- but that would hurt them (and the rest of the World for that matter) at least as badly as it would hurt us. They have 400,000,000 people they need to pull out of poverty. That isn't gonna happen if they undermine their biggest trading relationship.
I had always told everyone to keep eyes on China, for they would become the next rival of the US in the 21st century
They may well become our rival. We'll see. We aren't without our own strengths and they aren't without weakness though. We might see a different World in the 21st century but we'll still be around.
keep an eye on the relationship between Russia and China, as I suspect they will become strong allies in the years and decades to come
It's just as likely they'll become rivals as it is they will become allies. Either way, it's part of the geopolitical game. We're laying the foundation for a future relationship with India. Think India might be a useful counterweight to China?
With the equity markets down over 32% last year and the economy still deeply intrenched in a deflationary correction, buying any "stock" right now without a large and reliable dividend is not wise
Well, I'm a big fan of buying dividend stocks, so I won't argue with you on that one, but I think your wrong about it being unwise to buy non-dividend stocks. You want to buy stocks when the prices are low. I'm actually loving this period -- I'm not gonna retire for 30+ years and this is a great time to be buying shares at dirt cheap prices.
Sucks for the people who were going to retire soon but if they were going to retire next year why the hell did they have so many investments in equities? If I was close to retirement I'd have most of my nest egg invested in cash......
After much arguing, they eventually just let me cancel my current plan with them and I moved to Verizon. (Yes, I know that they are evil too.)
Verizon is evil but they do actually take some pride in their network. I've never known them to make changes that screw existing customers out of service. Here in the Northeast it's pretty hard to beat their coverage. At the end of the day what else matters?
EDGE hasn't stopped working either. They may get slower connections, but it still works.
Umm, I suggest you RTFA. They've shifted GSM/EDGE onto 1900mhz instead of 850mhz. By it's very nature the 1900mhz band has less coverage than the 850mhz band -- it doesn't carry as far or penetrate buildings/foliage as well. It's not just a matter of going "slower". You may wake up one morning and discover that you have zero signal in an area where you previously had excellent coverage. You going to tell me that wouldn't piss you off if you were under contract for this service?
At the very least they owe the affected customers a waiver of any early termination fees they might be subject to.
That's why I go with Virgin Mobile, pas as you go. I get calls, and texts and NO 2 year contracts!
Virgin Mobile is a MVNO. Meaning they don't own their own network and lease airtime off someone else. In the US I'm pretty sure they lease it from Sprint. If Sprint ever gets a bug up their ass and tries to pull the same shit that AT&T is pulling you'll be in the exact same boat.
I miss T-Mobile a lot. The coverage around here sucks (I spent half my drive to work with no signal) but the pricing and customer service can't be beat. I was getting 1,000 minutes for $40/mo.
Now I'm on Verizon. Somehow they manage to occasionally beat T-Mobile on the customer service ratings. How that happens is beyond me. Verizon customer service is very hit or miss -- sometimes you'll get a great CSR and other times you'll get some pissed off miserable SOB that hates his job and takes it out on you. I've actually gotten to the point now that I'll just hang up and call them back if I think I might have one of the CSRs that falls into the latter category. It's just easier than arguing with them and trying to get the call escalated.
Yeah, especially when they hold a gun to your head to force you into signing up in the first place!
Eh, it isn't AT&T holding a gun to your head and making you get a cell phone. It's your employer. Or the babysitter. Or your friends. Or the landline company that is busy ripping out payphones all over the place because there's no little demand for them.
You can go somewhere besides AT&T but they all do the same thing. T-Mobile is the best one to deal with in my experience but they don't work well at all if you don't live in a major city. I'm stuck with Verizon -- about the only good thing I can say about them is they aren't AT&T;)
I don't doubt that shifting spectrum to 3G is the right way to go
What I don't understand is why they have to shift all of 850mhz to 3G services. The cellular band (850mhz) was split into two by the FCC way back in the day. Each market has two licenses (A and B) with about 20mhz of bandwidth for each license. WCDMA requires a channel width of 5mhz.
Seems to me that they could have left some 850mhz spectrum allocated to plain old GSM if they had cared enough.
No, but most people who don't have smartphones probably have a GSM-only (i.e: 2G) phone and won't be too happy when they find out that they can't use it to receive/make calls anymore.
Every time I start bitching about some dumbass policy that Verizon Wireless has I need only look at the grass on the other side of the fence to realize that it could be worse......
If the ISP end of the connection is taking a T1 then one entire channel is reserved for out-of-band signaling, leaving (I think) 23 64 Kbit channels available for modem connections. I remember there were two options available and to make 56Kbit modems work well we had to use the out-of-band signaling option, which reduced the number of phone lines we had on each T1 by one.
Hmm. When I was working in the ISP business we had a full 24 lines per T-1 when we went to T-1 trunks for 56k, so I don't think you have to lose one for signaling. More fun than the T-1s though was the original setup -- once upon a time we had almost 600 POTS lines coming into our building and going to banks of USR Courier's. That room needed to be air conditioned even in the middle of an Upstate New York winter.
Sad thing was that I always saw better performance from my house with those modems running v.34+ (33,600) than I ever did with the digital trunks running at 56k. Never seemed to gain that much throughput with the 56k lines and the connections were (in my experience anyway) a lot less stable.
Al Queda wouldn't exist if the U.S. didn't use the middle east as a sandbox to pursue whatever agenda they decide is important. Be it the above mentioned support of Israel, or the pursuit of the previous boogy man, "the communists".
Al Quada seems to forget that we were invited into that sandbox by the Saudi Arabian Government.
because we are the ones with the WMDs.
So? Apparently the rest of the World is just fine with that arrangement. You'll note that 180+ countries have signed the NPT.
Israelis only have a military because the U.S. bought them one.
Actually Israel received most of her military support from France and the UK for the first few decades of her existence. She received a little bit from the U.S. but the vast majority came from Europe until the Yom Kippur War. France was also the country that got Israel's nuclear program off the ground.
Don't let the facts get in the way of a good US bash though.
I've gotten to work with the Secret Service twice in my professional career. The first time was at my old employer -- our e-commerce got pwned (thank god it wasn't one that I was responsible for) and about 15,000 credit card numbers were taken. The USSS sent agents down to investigate. Really professional and laid back -- it was a lot of fun to work with them.
The second time involved an employee of ours that sent some not-so-nice e-mails to George W. Bush. Needless to say the agents from the protective division aren't nearly as laid back as the agents from the financial crimes division -- but they were still very professional.
we could also strap magnets to the stockbrokers, and coil copper wire around major skyscrapers that house brokerage offices. it would help reduce energy costs [wikipedia.org] during times of economic recession.
The environmentalists won't like that though. It's not a renewable energy source;)
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Here's the trade-off I see:
$150,000 borrowed at 6% for 30 years = $173,757 in interest expense and a monthly payment of $899.33
$150,000 borrowed at 6% for 15 years = $77,841 in interest expense and a monthly payment of $1,265.79
You increase your payment by 40.7% percent in exchange for paying the loan off in half the time and only paying 44.7% as much interest.
In reality it would actually be a bit better than that because a 15 year typically has a lower interest rate. As far as not being able to afford "as big" of a house, I'm not into the whole McMansion craze. I just want a roof over my head. If I can't afford it with a 15 year mortgage then my attitude is that I can't afford it period.
Prices are low now (relative to a year ago) because risk is high, revenues will almost certainly be very low and the market mood is pessimistic. Only time will tell if prices were undervalued (cheap).
Risk is always high with equities. They are the riskiest investment that most people will typically make. They also have the highest potential for reward.
My 403(b) is filled with mutual and index funds. Some of them are down >45%. I don't care. I look at it as an opportunity because I'm picking up a lot more shares than I otherwise would. I'm 27 -- if a mutual fund containing thousands of American companies in every conceivable sector hasn't rebounded in the next 30 years I'd say we have bigger problems than our nest eggs to worry about. At that point we'd probably be burning greenbacks to keep warm.
I've also started buying individual stocks. My philosophy with them is to look for companies that I think are undervalued, preferably ones that have a long history of paying dividends. The dividends go into reinvestment (i.e: more shares) and give me a better rate of return than I'd get with most cash investments.
I'm actually breaking even right now -- a few of my picks are down and a few of them are up. I'm not putting any money into it that I can't afford to lose (lesson #1 about investing in stocks) and it's actually kind of fun. Considering that the average American gets to find new and creative ways to manage their debt (who has a 0% balance transfer offer this month?) I think I'm already ahead of the game. It's a lot more fun managing your investments than managing your debt.
Speaking of, that's another thing that Americans need to learn some sanity about. When I buy a house it'll be with a 15 year mortgage -- the payments don't double but you pay off the loan in half the time -- what's not to like? I have zero credit card debt and will have my car paid off a year ahead of schedule. I'll probably buy my next car with cash -- only way I'd finance a car again is if I qualified for a 0% APR loan.
Our intentions were good, but it took 6 fucking years to get Afghanis to publicly condemn the murder of schoolchildren by muslim lunatics. At this rate, we might actually stabilize the region in a few more centuries, by then the almost-millenia-old islamic schism might even be healed.
This is gonna sound cold but I really don't give a shit about Afghani schoolchildren or women. I give a shit about seeing a Government come to power in Afghanistan that can keep their own fanatics from flying airplanes into our buildings. I don't believe that such a Government has come to power yet -- hence we need to remain there.
All the talk about building Democracy really kind of misses the point, IMHO.
considering that on average if you make it to age 60 you will live to be about 90
Nah, I'm an American, I don't have to worry about that ;) Kidding aside, your point is quite valid. I shouldn't have said "most" -- what I should have said was you'd be a fool not to have enough of your nest egg in cash to enable you to ride out market downturns without having to cash in equities at a loss.
A basic rule of thumb that I've heard is that you should subtract your age from 120. The result is the percentage of your portfolio that should be in stocks. The rest should be in safer investments. A less aggressive approach is to subtract your age from 100. It's obviously an oversimplification but it does demonstrate the need to adjust your risk tolerance as you get older and presumably closer to retirement.
say 30 thousand assuming you live really frugally in that first year of retirement
Hell, I live on less than that now......
The general answer is that most retired investors need their portfolio to generate a return at least equal to inflation, over time. Historically cash has a negative return after inflation and bonds are maybe break-even at best
True dat. And I didn't say I'd have it all in cash. But I certainly would have had enough in cash so that my retirement plans wouldn't have been affected by the recent downturn.
I was already concerned about his wanting to send more troupes to Afghanistan, but now this????
Umm, Afghanistan != Iraq. You do remember why we are over there, right?
The government always needs a boogeyman to keep us off-balance. The cold war with Russia carried it for a while.
I don't think the populations of the countries that were effectively annexed by the Soviet Union thought of them as a mere bogeyman. The Cold War came about when the Soviet Union refused to honor her wartime agreements and decided to annex Eastern Europe. It didn't come about because our Government needed a bogeyman to distract the population.
but this demonization will only hurt relations
So we should turn the other check when they oppress human rights and just keep doing business with them as usual?
Also, keep in mind that China already has the US by its financial balls in a very assymetrical fashion, and I'm not sure what that would portend. But it does give China a lot of leverage over the US.
How do they have us by the 'financial balls'? They could dump their holdings of US Treasuries and pull the rug out from under that market -- but that would hurt them (and the rest of the World for that matter) at least as badly as it would hurt us. They have 400,000,000 people they need to pull out of poverty. That isn't gonna happen if they undermine their biggest trading relationship.
I had always told everyone to keep eyes on China, for they would become the next rival of the US in the 21st century
They may well become our rival. We'll see. We aren't without our own strengths and they aren't without weakness though. We might see a different World in the 21st century but we'll still be around.
keep an eye on the relationship between Russia and China, as I suspect they will become strong allies in the years and decades to come
It's just as likely they'll become rivals as it is they will become allies. Either way, it's part of the geopolitical game. We're laying the foundation for a future relationship with India. Think India might be a useful counterweight to China?
NASA will become a fourth branch of the U.S. Armed Forces, known as 'Starfleet'.
Will the uniforms ride up every single time you sit down? ;)
Kinda like that "tolerant" neighborhood near San Francisco
If you think San Franciscans are tolerant try applying for a carry permit within the city......
With the equity markets down over 32% last year and the economy still deeply intrenched in a deflationary correction, buying any "stock" right now without a large and reliable dividend is not wise
Well, I'm a big fan of buying dividend stocks, so I won't argue with you on that one, but I think your wrong about it being unwise to buy non-dividend stocks. You want to buy stocks when the prices are low. I'm actually loving this period -- I'm not gonna retire for 30+ years and this is a great time to be buying shares at dirt cheap prices.
Sucks for the people who were going to retire soon but if they were going to retire next year why the hell did they have so many investments in equities? If I was close to retirement I'd have most of my nest egg invested in cash......
hate the Linux community as a whole, but that's a whole 'nother kettle of fish
Boy did you pick the right website ;)
After much arguing, they eventually just let me cancel my current plan with them and I moved to Verizon. (Yes, I know that they are evil too.)
Verizon is evil but they do actually take some pride in their network. I've never known them to make changes that screw existing customers out of service. Here in the Northeast it's pretty hard to beat their coverage. At the end of the day what else matters?
I'd bet that your average American Slashdotter would discover that switching their phone to "pulse" would prevent it from successfully dialing.
I still have a rotary phone. Old school Ma Bell phone with an actual ringer in it. It worked just fine five minutes ago.
Output power is the same for both frequency bands
Not exactly. Output power on the mobile side is limited to 30dBm (1 watt) under 1900mhz vs 33dBm (2 watts) on 850mhz.
EDGE hasn't stopped working either. They may get slower connections, but it still works.
Umm, I suggest you RTFA. They've shifted GSM/EDGE onto 1900mhz instead of 850mhz. By it's very nature the 1900mhz band has less coverage than the 850mhz band -- it doesn't carry as far or penetrate buildings/foliage as well. It's not just a matter of going "slower". You may wake up one morning and discover that you have zero signal in an area where you previously had excellent coverage. You going to tell me that wouldn't piss you off if you were under contract for this service?
At the very least they owe the affected customers a waiver of any early termination fees they might be subject to.
That's why I go with Virgin Mobile, pas as you go. I get calls, and texts and NO 2 year contracts!
Virgin Mobile is a MVNO. Meaning they don't own their own network and lease airtime off someone else. In the US I'm pretty sure they lease it from Sprint. If Sprint ever gets a bug up their ass and tries to pull the same shit that AT&T is pulling you'll be in the exact same boat.
I miss T-Mobile a lot. The coverage around here sucks (I spent half my drive to work with no signal) but the pricing and customer service can't be beat. I was getting 1,000 minutes for $40/mo.
Now I'm on Verizon. Somehow they manage to occasionally beat T-Mobile on the customer service ratings. How that happens is beyond me. Verizon customer service is very hit or miss -- sometimes you'll get a great CSR and other times you'll get some pissed off miserable SOB that hates his job and takes it out on you. I've actually gotten to the point now that I'll just hang up and call them back if I think I might have one of the CSRs that falls into the latter category. It's just easier than arguing with them and trying to get the call escalated.
How I miss T-Mobile :(
Yeah, especially when they hold a gun to your head to force you into signing up in the first place!
Eh, it isn't AT&T holding a gun to your head and making you get a cell phone. It's your employer. Or the babysitter. Or your friends. Or the landline company that is busy ripping out payphones all over the place because there's no little demand for them.
You can go somewhere besides AT&T but they all do the same thing. T-Mobile is the best one to deal with in my experience but they don't work well at all if you don't live in a major city. I'm stuck with Verizon -- about the only good thing I can say about them is they aren't AT&T ;)
I don't doubt that shifting spectrum to 3G is the right way to go
What I don't understand is why they have to shift all of 850mhz to 3G services. The cellular band (850mhz) was split into two by the FCC way back in the day. Each market has two licenses (A and B) with about 20mhz of bandwidth for each license. WCDMA requires a channel width of 5mhz.
Seems to me that they could have left some 850mhz spectrum allocated to plain old GSM if they had cared enough.
Most people don't even know what 2G is
No, but most people who don't have smartphones probably have a GSM-only (i.e: 2G) phone and won't be too happy when they find out that they can't use it to receive/make calls anymore.
Every time I start bitching about some dumbass policy that Verizon Wireless has I need only look at the grass on the other side of the fence to realize that it could be worse......
If the ISP end of the connection is taking a T1 then one entire channel is reserved for out-of-band signaling, leaving (I think) 23 64 Kbit channels available for modem connections. I remember there were two options available and to make 56Kbit modems work well we had to use the out-of-band signaling option, which reduced the number of phone lines we had on each T1 by one.
Hmm. When I was working in the ISP business we had a full 24 lines per T-1 when we went to T-1 trunks for 56k, so I don't think you have to lose one for signaling. More fun than the T-1s though was the original setup -- once upon a time we had almost 600 POTS lines coming into our building and going to banks of USR Courier's. That room needed to be air conditioned even in the middle of an Upstate New York winter.
Sad thing was that I always saw better performance from my house with those modems running v.34+ (33,600) than I ever did with the digital trunks running at 56k. Never seemed to gain that much throughput with the 56k lines and the connections were (in my experience anyway) a lot less stable.
Those were the days.....
and relayed more than 36 gigabytes of data via
Seems a little slow. Maybe Obama can extend some broadband lines to Mars and bring them into the 21st century? ;)
There was no Israel until terrorists created one [wikipedia.org]
The UN is a terrorist organization? Who knew!
Al Queda wouldn't exist if the U.S. didn't use the middle east as a sandbox to pursue whatever agenda they decide is important. Be it the above mentioned support of Israel, or the pursuit of the previous boogy man, "the communists".
Al Quada seems to forget that we were invited into that sandbox by the Saudi Arabian Government.
because we are the ones with the WMDs.
So? Apparently the rest of the World is just fine with that arrangement. You'll note that 180+ countries have signed the NPT.
Israelis only have a military because the U.S. bought them one.
Actually Israel received most of her military support from France and the UK for the first few decades of her existence. She received a little bit from the U.S. but the vast majority came from Europe until the Yom Kippur War. France was also the country that got Israel's nuclear program off the ground.
Don't let the facts get in the way of a good US bash though.
She got a visit from DHS and the FBI.
I've gotten to work with the Secret Service twice in my professional career. The first time was at my old employer -- our e-commerce got pwned (thank god it wasn't one that I was responsible for) and about 15,000 credit card numbers were taken. The USSS sent agents down to investigate. Really professional and laid back -- it was a lot of fun to work with them.
The second time involved an employee of ours that sent some not-so-nice e-mails to George W. Bush. Needless to say the agents from the protective division aren't nearly as laid back as the agents from the financial crimes division -- but they were still very professional.
we could also strap magnets to the stockbrokers, and coil copper wire around major skyscrapers that house brokerage offices. it would help reduce energy costs [wikipedia.org] during times of economic recession.
The environmentalists won't like that though. It's not a renewable energy source ;)