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« XVIII COMMONWEALTH GAMESWoman Time Now »

Getting the Most from your Money

03/07/06

Permalink 09:37:02 pm, by Melba
Categories: Business

Getting the Most from your Money

There are certain securities that everyone aspires for. The day to day basics for living such as nutrition is a must. However we all dream of owning some form of transportation and a home of our own. Education is another key to our success. And as we grow older provisions for our old age becomes a major concern. All these aspirations need money and today there are no shortage of individuals and institutions wanting, willing just waiting to advice us on how to get the most from our money.
Owning a home is probable the most costly financial commitment that most people embark on. Acquiring a mortgage and dealing with all the associated cost is not easy however once that is accomplished you are half way there. The difficult decision is what to do with any lump sums of money accumulated or earned once your mortgage is secure.
One advice that is very popular with individuals with a financial background and financial institutions is never pay off your mortgage. Invest your money and watch it grow, they tell you. I am no expert but based on personal experience I believe that is the worst advice ever.

Follow up:

After carrying a mortgage for five years paying diligently every month, one day I decided to check up how much I had paid in total. To my surprise I had paid over 166 percent of the sum borrowed. I then called the mortgage company only to find out that the balance on my loan was the same as when I had borrowed the loan fives years earlier. Further more I had fifteen more years to go. That means that after twenty years I will have paid over 650 percent of what I had borrowed. Naturally I was in shock. Somehow when I had gotten the mortgage it did not register that this was what would take place. So when I got some money I decided to pay off my mortgage. “Are you crazy”, I was told, “No way”, “That is madness”. So I sought professional advice.
In the end I followed the experts partially and invested half and paid half on my mortgage. Big mistake, I should have paid my mortgage in full. First of all the mortgage company took the payment and recalculated the balance over the same fifteen years left on the original agreement. I was not happy with this so I went in and this time asked a million questions of, ‘what if’. That was a very enlightening meeting. One thing I learnt was that for five percent more on the new reduced mortgage payment the life of my mortgage would reduce to 7 years instead of 15 years.
Two years later my mortgage is only marginally reduced, the money invested is less as some of it was in stocks which are not doing well and I have paid almost sixty five percent of the total figure in mortgage payments. If I had paid my mortgage in full and started a savings of even fifty percent of my present monthly payments, investing periodically I would be ahead of the game today.
I challenge anyone reading this that has a mortgage to examine their figures then talk to their mortgage company and tell me I am wrong. Ask as many ‘what ifs’ as you need to. They will answer but they surely will not volunteer the information. If your mortgage is recent then chances are you will not be in a position to make any changes for a while. Just don’t rule out paying lump sums on your mortgage principle if you get an opportunity. You may not have a lump sum but your situation may have improved. Increasing your monthly payment while reducing the life time of your mortgage may make a big difference to your long term goals.
Whatever you do make sure to get the most from your money. Check it out.
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Bruk Pocket Jamaican

"Recently, this Jamaican won the 10 million special lottery for a dollar. As soon as the office of the Lottery Corporation was open on the following day, he was there to collect his winnings.

Graciously, he presented his winning ticket to the clerk and in his best English uttered his request "Me cum fi collect the 10 millian dallars, si me ticket ya".

After reviewing and checking the ticket with his manager, the clerk returned and requested on how he would like his payments. The Jamaican replied "Mi wan all a de moni now". "Unfortunately, Sir" the nervous clerk responded, "The procedures are that we can only give you one million now and the balance equally over the next 20 years".

Furious and agitated, the Jamaican asked for the manager, who re-iterated "Sir, my assistant is correct, it is the regulation of the corporation that we initially pay you one million dollars now with the balance paid to you equally over the next 20 years".

Outraged, the Jamaican slammed his hand on the desk and shouted in anger, "Oonu tek me fi idiat, me wan all a de moni now or oonu gi me bak me rass dallar!!"

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