Thursday, May 12, 2022


 Memorable Automobiles from The Past:

 I like this beauty in the desert.

For today:

Sherry & I were both raised and taught by parent examples, never spend more than you make. It was stressed, “Put a little back for a Rainy day!”

Americans as a rule live with ‘payments’. Payments include interest! When we got married, Sherry took her Christmas savings and paid off the $300 owed on our car, so we were debt free. Our salary $78 a month. I was a shade tree mechanic and kept our cars running until we could pay another one. Sherry made things last in the home. In the military when I received a promotion, I took out a US Savings Bond to be paid for by the increase. The First bond was the $25 bond.  The next promotion I increased the Bond to $50 then last $100.  They had a good interest rate and even continued to gain value after reaching their face value. We refused to cash the bonds. We lived debt free except for rent and utilities.

We learned early in the USAF from friends who lived in trailers. Lot rent was $8-$14 a month, where rent was $43-$80 a month. We bought an old 32x8 trailer.

We were in our mid 30’s when we realized we would never save enough to BUY a home, so we cashed $2000 in bonds for a down payment on a home and assumed a then standard 8% loan. (Cashing bonds was a task. To cash a bond you must fill in your present address and sign it on the back OF EACH BOND, that was 50 or 60 bonds!!)

When Sherry read the ‘end of year loan report’ she hit the ceiling. “Jack we have been paying $203 a month for this house and after 12 payments we have only paid $220 on the principle. Did you realize if I had made one extra payment last year I would have cut one year from out 20 yr loan?”

I checked and we could make extra payments directly on the principle, and yes it would cut the loan period.”  WE learned that the first few years of a loan 90% of the payment is interest. So in the first few years you REALIZE much gain if paying ahead.

When that house sold, Sherry had lowered the loan from a 20 yr loan to a 10 yr loan. Our equity actually paid for our new home.


PSa: Loans now are 2-3% so one would have to make 3 extra payments a year to drop a year.

PS: Dadgummit:

Just once, I want the username and password prompt to say, “Close enough.”


Mevely317 said...

I"m sure this doesn't come as news to you ... but methinks you've a SMART sweetheart!
I'd venture, wish someone had cautioned me when I was younger -- but there's a good chance I wouldn't have listened.

It's a beautiful day in Coosada; hope your neighborhood is too! xo

betty said...

Sherry is a very wise woman! That interest will kill you, even if it is just a small amount, over time. Always good to try to pay for things with cash if one can!


Victor S E Moubarak said...

You are so right, Jack, about the extra payments and paying the principal early in the life of the loan. Sadly, this is not taught at school these days.

God bless.

I'm mostly known as 'MA' said...

There is a lot to be said about living within your means and not taking out loans, but a house is something most have to take a loan out for. Looking for a good interest rate and making payments ahead of time is a great idea and will save you money too. It took me years to pay off the debts I had, but now I live debt free and it's a great feeling !