Saturday, March 15, 2014

The Horror Story I read to Peggy to Change her mind

Let’s look at Sam and Nick.

They both earn $75,000 a year. Both have $50,000 in cash. Both buy a $250,000 house. Nick wants to minimize his mortgage, so he uses his $50,000 in savings as a down payment, and he opts for a 15-year loan at 6.75%. His monthly payment is $1,770 — but only 64% of that payment is tax-deductible interest; the rest is principal. Therefore, Nick’s net after-tax cost for his mortgage is $1,489. And to pay off his mortgage even quicker, Nick sends in an extra $100 with every payment. Of course, these payments are devoted entirely to principal, and therefore provide no tax deduction.

Nick’s decision to send extra payments to his lender is a critical point. You see, every time you send extra money to your mortgage company, you deny yourself the opportunity to invest that money elsewhere. In business school, professors call this “opportunity cost.” It means, essentially, that every time you turn left, you deny yourself the opportunity to turn right. So, although paying off the mortgage saves you interest, you deny yourself the chance to earn interest with the money you used to pay off the mortgage.

Sam understands this, and therefore, he obtains a 30-year mortgage at 7% (a bit higher than Nick’s rate). He puts down just $12,500 and finances the rest. Even though Sam’s mortgage balance is bigger than Nick’s ($237,500 compared to $200,000), his monthly payment is lower (because it’s a longer term). That’s not all. A full 88% of Sam’s payment is interest, meaning that Sam’s after-tax cost is just $1,234 a month — $255 less than what Nick has to pay! Sam invests this savings of $255 each month for five years, earning 8% after taxes per year. And, instead of sending an extra $100 a month to his mortgage company, as Nick does, Sam adds it to his savings.

Smart Sam versus Nervous Nick
Monthly payment: $1,580 Interest portion: 88% After-tax cost: $1,234 Sam’s payment is $255 less per month than Nick’s $1,770 64% $1,489.  Over five years, Sam has about $79,000 in savings and investments.

Nick, however, has no cash whatsoever, because he’s placed every available dollar into mortgage payments.

So, when both men suddenly find themselves out of work, Sam is in excellent financial condition, but Nick is in real trouble. He has no savings to tide him over, and he can’t gain access to the $100,000 worth of equity that’s in his house because, being out of work, the bank turned down his loan application. (It’s true: Lenders don’t care about how much equity you have in the house. They lend money only to people who can repay the loan).

With no job, Nick has no income, and therefore, he cannot qualify for a loan. Indeed, Nick has fallen victim to the biggest misconception in real estate: A mortgage is not a loan against the house; it’s a loan against your income. Without an income, you cannot obtain a loan.

If Nick doesn’t get a job real soon, he’ll lose his house. How ironic! Nick, who never wanted a mortgage in the first place and who did everything he could to eliminate his mortgage as quickly as possible, is now in serious financial jeopardy! 

Sam, though, is in much better shape. With $79,000 in savings, he’s easily able to make his payments each month. In fact, he can make mortgage payments for four years, giving himself plenty of time to find a new job! And that’s really my point. When you have a mortgage, you are required to make only that month’s payment. You are never required to pay off your loan immediately. You might want to do so, but that doesn’t mean you must do so. You must not send extra payments to your mortgage lender. Invest that money instead, just as Sam did.

Never prepay your mortgage payments like Nick did, because once you give money to a lender, the only way you’ll ever get it back is to re-borrow the money or sell the house. Selling your home is the last thing you want to do, and if unemployed, you probably will be unable to get a loan when you need it most. Besides, if you’re simply going to borrow it back later, why bother giving the money to the lender in the first place? Tip your hat to your spinning-in-his-grave grandfather, and go get a big, long-term mortgage today!

Peggy and I argue about this

The last few days we had a lot of discussion about this, but we finally resolved it.  This article helped us get to neutral over this difficult issue that plagues many households.

10 Great Reasons to Carry a Big, Long Mortgage By Ric Edelman

Never own your home outright. Instead, get a big 30-year mortgage, and never pay it off — regardless of your age and income.

Now, I know that you don’t want a mortgage. What you want is a house, but to get it, you must obtain a mortgage. If you’re like most folks, you hate your mortgage, and you’d love to get rid of it as soon as possible. You grimace at every monthly payment, and you know that, over 30 years, you’ll pay more in interest than you paid to buy the house in the first place. That’s why you put down as much money as possible — to keep the mortgage as small as you could. You might have taken out a 15-year loan to get the loan paid off in half the time, and might even be making extra payments, or perhaps signed up for one of those biweekly loan programs, all to enable you to get rid of the mortgage just as quickly as possible. You do all of these things, of course, for a very basic and deep-rooted reason: because your parents taught you that you should never have a mortgage, and the key to the American Dream is to own your home outright.

Yet, a Big 30-Year Mortgage Is Best Although your parents’ advice once made sense, today it is completely wrong. In today’s economic environment, a big, 30-year mortgage is the best thing you can have. (Now, don’t confuse the idea of a big mortgage with that of a big house; I am not endorsing the idea of buying as expensive a house as you can. Instead, you should buy the least expensive home you are willing to own — and then borrow as much as you can, and for as long as you can.)

So: Never pay off the mortgage. Reject 15-year loans, never make extra payments, and forget about those biweekly mortgage payment plans. Before you dismiss all this, read on — because I’m about to show you how your mortgage can help you make incredible amounts of money.

Thursday, March 13, 2014

Strange and funny theologies.

The church of my youth has a core theology that to this day is rejected by nearly all theologians. The Old LCMS believed in the bodily physical corporeal resurrection of the body. To put that another way, somehow, some way God at the last day will gather up the parts and pieces of every person who has ever lived and reassemble them like a giant jigsaw puzzle and raise them up. I know where the ideas come from, but the fact is you have to twist bend and contort the word of God to make this all work. Yes, I know all the verses that attempt to support this.

I won't poke fun at this theology. I have stumped the best of LCMS seminarians with a few questions. In this "Reassembly" what about the decomposition that takes place, and recycles in plant life, then in bovine product (Hamburger) that is then ingested by another, and then passed and re-absorbed into the earth, to become another part of the life cycle.

What about those burned in fire, dust scattered to the four corners, to become part of topsoil. Who's molecules are those anyway?

Of course I always get the answer which goes something like this, "Well, I don't know how but God has the power to do whatever he wants to do. Sure, he could make us all kitty kats in the after life too. That might be necessary if some of those cats ate mice that ate grain that was grown in the dust laden topsoil from that fire above.

The mercy stroke (Coup de Grace) is the question is the issue of the thief on the cross. Jesus said, TODAY you will be with me in Paradise. Was he kidding? Did the thief rise from the dead bodily? Is his body still in the ground? Paul said that to be absent from the Body is to be present with the Lord. So what happens when the Body is somehow reassembled? Is he then Absent from the Lord if he is represent with the Lord.

Even Luther didn't believed in this. In his writings he intimates more of a soul sleep. I don't know how this got all messed up. I wrote of what happens after we die. I am not trying to change your theology, but as a great theologian once said, "What does the text say". Follow that bunny trail and you will come to the truth. When you die you are absent from the body and present with the Lord, you shall be like him. That is all we need to believe. I don't know how many people have been put off by this poor theology, but we need to be accurate and not traditional.

Apprenticeship is just that:

I had apprentices when I worked in Germany as the Chief Executive in a manufacturing plant.  When you become an apprentice as a person who is going to spend your life working with iron and steel, the first thing you must learn is how steel behaves.  Certainly you can read about it, get fancy diagnostic instruments to test for tensile strength and such, check it's carbon content by using a carborundum wheel and counting the spark content.  That would be one way. 

The way it's done is Germany is you take a raw piece of metal and drag another piece over the top of it to see how it reacts.  Scratches.  How different grades react to different abrasions.  Then you take a flat (bastard) file and begin to file several different samples of iron and steel to get a feel for how is resists or complies with the metal working.  Once you can tell a lot about the steel with just a file, you begin beating on them with a hammer, then under heat.  Etc.  You learn all you must know before you are moved up to welding, turning. forging, forming, smithing and such. You learn to do it by hand first...then with instruments.

There is a problem in our work force.  We do not train or learn the basics of certain skill sets before we place in people's hands the shortcuts to make it easier.  I point in particular to things like Quick books, Graphic Design, Website Management and a plethora of other "tools" that in the hands of the incompetent only allow people to produce more and higher stacks of paper without meaning.

The internet has made researech skill using library cards a lost art.  No one even knows how to farm a telephone book any more.  There are apps for that.  People can publish anything on Facebook or a  blog without a smidgen of necessity for the execution of the english language at any level. 

Unless you learned to write by hand in a notebook and read it back, you are not a writer.  Unless you leaned to keep a set of books in paper ledger books you are dangerous with Quickbooks.  Unless you long ago learned the basics of design on paper by hand, a graphic package for you is a detriment.  IF you don't know how to dig thru a cardex by hand, Google will dead end you.  WE have too much schlock in the world done by people who never learned to drag a bastard file over  a cold hard piece of steel.

Skill is lost... perhaps forever.  But  "there's an app for that"... the worst words in the world.  There is no app for being an apprentice. 

Eight Things a Person Could Do to Diminish the Greatness of the United States of America

There are many who believe that Barack Obama was motivated to be President of the United States to enact a radical agenda to transform the nation (! Many believe his actions and language reveal he is against American exceptionalism. (“Understanding the meaning of American exceptionalism is indispensable for anyone who wants to understand what it has meant to be an American.” Many believe he wants to even the playing field, making the USA just one power amongst other developed nations.

The following are eight objectives a person would have to execute to effectively diminish the unique status of the USA as the leader of the free world:

1. Become the U.S. President

Although the U.S. Constitution counterbalances the office of president with Congress and the Supreme Court, the President still has enormous influence as the leader of the free world. The President would have the ability to set foreign and domestic policy; appoint members of the Supreme Court as well as numerous federal judges; and be able to push certain major initiatives through, even without an official vote of Congress.

Truly, becoming President would be a logical goal for any person wanting to be in the greatest position to radically diminish and/or transform our nation!

2. Alienate Global Allies

Since the world is flat and we live in a global economy, a person desiring to diminish the status of the USA as the world leader would intentionally disappoint their greatest allies. In the Middle East they would want to alienate Israel; in Western Europe they would want to disappoint powerful economic nations like Germany. For example, President Obama has had a very cold relationship with the Prime Minister of Israel, Benjamin Netanyahu, because of his position on the Palestinian issue and his weak posture towards Iran’s plans for developing a nuclear arsenal. Furthermore, the NSA scandal brought about by Edward Snowden revealed the USA has been spying on all their Western European allies, even to the point of listening in on the mobile phone calls of German President Angela Merkel! This of course has greatly damaged our relationships with several of our most important allies in major parts of the world, not including the great damage this scandal has done to our international credibility and other nations affected by illegal NSA probes.

3. Run up the National Debt

Another thing a person would do to diminish the power of this nation would be to weaken it economically through debt financing. To quote Peter Schiff: “The crisis is imminent. I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems. We’re broke. We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Euro zone, they would kick us out.”

4. Push the Nation Away from Biblical Values

The Ten Commandments (Exodus 20) were given by God as a blueprint to bless a nation. Nations that adhere to these commandments will experience prosperity. For example, all the nations most affected by the Protestant Reformation became the world’s leading innovators; the USA was blessed primarily because it became only the second nation in history (other than Israel) to be founded by a covenant with God (the 17th century Mayflower Compact).

Unfortunately, President Obama has directed a policy turn towards the further secularization of the USA. For example, the Pentagon’s stance against biblical Christianity (; forcing businesses like Hobby Lobby to fund abortion and contraception through Obamacare (; and his refusal to allow the Justice Department to defend DOMA (The Defense of Marriage Act).

5. Reduce the Military

Past presidents like Reagan believed in peace through strength. One of the main reasons why nations like Russia and China have not continued expanding their territories is because the U.S. military is a deterrent. The old Soviet Union was forced to compete with a huge military buildup initiated by Reagan. Their economy collapsed because they could not keep up with us!

Conversely, President Obama has continued to cut the military down to pre-World War II levels (! These cuts are taking place at a time when Russia is attacking Ukraine, China is expanding their navy, and Iranian warships are coming close to U.S. coastlands (!

6. Appease Foreign Enemies

Another way to weaken a country is to diminish their respect in the global theater while enabling their enemies to advance in their objectives. In the past several years we have witnessed the so-called Arab Spring uprisings that have enabled Islamic radicals’ rise to greater power in Islamic nations; we have seen President Obama publically draw a red line with Syria regarding the use of chemical weapons and then subsequently back away from his position when they tested him, while deferring to Vladimir Putin’s Syria plan, thus hurting U.S. credibility and empowering Russia; we have seen an Iranian general publically mock Obama ( and speak of annihilating Israel, our primary ally in the Middle East, while stringing along the U.S. and the U.N. regarding their intent on developing nuclear weapons.

Obama should learn from Britain Prime Minister Neville Chamberlain’s appeasement strategy with Hitler that failed miserably after he declared “peace for our time”!

Diplomacy will only work if you have the respect of your enemies!

7. Divide the Nation along Race and Ideology

A nation divided against itself cannot stand. Obama originally campaigned on a promise to end bipartisan bickering and to be the president of a unified nation. Unfortunately, the opposite has happened with more hatred and animosity enveloping the nation since the 19th century War Between the States!

Obama is constantly blaming Republicans for the nation’s ills thus further dividing Congress ( Under his administration the IRS has been empowered to investigate conservative groups and to make it harder for those ideologically opposed to him to receive official government status. Knock out attacks are proliferating across the nation ( All in all, there seems to be more division in this nation than at any other time in our history!

Obviously it is not all Obama’s fault, but under his leadership the racial and ideological divide in our nation has grown worse! A person wanting to radically diminish a nation would want to highlight what divides it rather than what can unite it. To quote an article from regarding President Obama:

“But the divisive attitude was around before he was elected. It was while campaigning in April 2008 that he dismissed small-town folks as ‘bitter’ people who ‘cling to guns or religion or antipathy to people who aren’t like them’ when they get frustrated….

“There’s more. He once said his grandmother ‘is a typical white person,’ told Latinos they should say ‘We’re going to punish our enemies and we’re gonna reward our friends,’ and complained about ‘our own right-wing domestic terrorists who are subverting the American democratic process.’

“Earlier this year, a Gallup Poll found Obama to be, in the words of the Washington Post, ‘The most polarizing president. Ever.’

“Clearly, he has become the president of some Americans and not others.” (

8. Bypass Congress and Ignore the Constitution

Any person who wants to diminish our nation would have to ignore the U.S. Constitution and appoint officials and federal judges with the same disregard for our founding documents as they have. This is a must in order to carry out their agenda without being counterbalanced by Congress and the judicial branch. To quote black conservative Armstrong Williams:

“Our Founding Fathers crafted the Constitution with divided powers as such for good reason. With the powers of government limited through the division between our Executive, Legislative, and Judicial branches, the actions of government would ideally grow more coherent in terms of resonating in consensus with society….

“President Barack Obama, former professor of Constitution law, effectively announced that as president of the United States he was ignoring the spirit of the Constitution. In lieu of his incapability to get agreement with Congress he is willing to use executive power to implement laws that Congress will not officially endorse….

“President Obama has decided he is no longer willing to work with the Republican Party in Congress to pass legislation. His desire and will for reaching compromises has wholly diminished. He has made clear that he will henceforth move with actively implementing laws without convincing a majority of the Congress that it is the right thing to do. This is in clear violation of our Constitution.”

Finally, it is the opinion of many that President Obama has a radical agenda bent on diminishing the superpower status of the U.S. I personally do not think he hates the American people but he sincerely believes what’s best for the world at large is a humanistic progressive ideology leading to a new world order ( which, left unchecked, could lead to a serious diminution of our nation. His global highbrow egalitarian vision is paving the way for our nation to be merely one of possibly three superpowers (along with the E.U. and an Asian alliance led by China and possibly India:

We don’t have much time left to stop this ideological/political train that has already left the station!

Tuesday, March 11, 2014


The simple-minded, the emotion-driven, the false-science-loving and low-information voter's heroes have decided to reeeeeeally reeeeeeeally scold the bad, bad weather, bludgeon every last tax dollar out of us and regulate us down to corkscrew lightbulb using Luddites who "Choose" to live with less, live in cold homes in winter and roast in hot homes in summer, forsake our cars and peddle bikes, wearing helmets like little Barry Trayvon of course, and stop eating meat because of those bad, bad, farting cows.
These are the solutions of the Einstein's in the Democrat Party in Congress.
Stayed up all night, they did, in order to get serious about the hoax of 'Global Warming.'
You see, there's nothing else serious going on.
No unemployment.
No imploding Obamacare crisis.
No IRS, NSA, CIA, FBI, FCC, DOE, DOJ.....federal agencies trampling citizen's rights.
No teetering economy or stock market bubble about to burst.
No illegal aliens draining our economic, medical and education resources.
No foreign enemies rattling their sabres at us while we shrink our military.
The really big deal is pretend that mankind can force Mother Nature to be nice.
That's really going to work.
And it makes the hardworking Democrats look so caring and concerned.
Who knows, maybe idiot voters who elected Barry Trayvon Hussein twice will fall for it?
We'll all be sitting around in caves and starving next year.
But we'll be 'Saving the planet!'

Sunday, March 09, 2014

The painful reality in America:

The painful reality in America: for increasingly more it is now more lucrative - in the form of actual disposable income - to sit, do nothing, and collect various welfare entitlements, than to work.

And that trend appears to be accelerating as more and more men drop out of the workforce...

and the demise of opportunity continues unabated...

... "life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement" regardless of social class or circumstances of birth (or amount of stock ownership).

There are clues to your entrepreneurial instincts

When you consider a line of work or a job give yourself one point for each of these you thought about in deciding:

1. You ask what kind of retirement plan they have
2. Benefits are very important to you in this consideration
3. The number of hours required on this job matters
4. What kind of advancement is available and what kind of pay increase is there.
5. You weigh the amount of hours you will work versus the pay
6. Worry about being held responsible for things without the authority to change things
7. Being appreciated for the work you do is very important to you
8. If a better job for more pay comes along you are on the alert for it
9. A good title matters to you.
10. It matters what people think about you and your work

IF you Scored 7-10 points you will be happiest working for others. Don't go into business on your own.  It will drive you crazy.

IF you Scored 4-6 points you might be able to be in business for yourself, but you would do better if you have a partner to keep you balanced.

IF you Scored 1-3 points you can make it, but you have a few mental obstacles to overcome.  Making it on your own means you cannot have anything that holds you back.  You still have a couple strongholds... but they can be overcome.

IF you Scored 0 you are already in business for yourself and will become a very wealthy person. Congratulations. You are part of the one percent..