Posts Tagged "trade offs"

Refinancing your home Part 2: An Example

Posted by Preet on Jul 27, 2007 | 2 comments

Okay let’s show how an actual couple ended up freeing $915.80/month by refinancing their home. I’ve rounded the numbers, but they are from a real life scenario. We’ll begin with a snapshot of what their financial situation was BEFORE: Home Value: $250,000 Mortgage: $150,000 balance, 20 years left, 6% interest rate = $1,070 Monthly Payment Credit Card Debt: $10,000 balance, 18.8% interest rate = $500 Monthly Payment Vehicle Loan: $26,000 balance, 8% interest rate = $500 Monthly Payment Department Store Charge Cards: $5,000 balance, 28.8% interest rate = $250 Monthly Payment In this case, they have a total debt obligation of $191,000 and total...

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So how do you become wealthy?

Posted by Preet on Jul 24, 2007 | 0 comments

I Suppose that’s the ultimate question, isn’t’ it? If I had to boil it down into the shortest space possible it would be this: trade-offs. Specifically, you have to look at the trade-off within each financial decision you face. Let’s look at an example. Should I buy a Honda Civic or a Porsche Boxster? What would be the trade-off in this case? If you get the Honda, you will be spending less on all your costs associated with cars (vehicle payment, insurance, gas, maintenance, etc.). If you get the Porsche you pay more and perhaps have a more enjoyable driving experience, get noticed more and that’s about it. So the trade-offs in this case...

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