Wednesday

Reverse Mortgages Are A Bad Idea

Ok, you work hard your whole life to finally pay off your home, no mortgage, whew and you assuming you paid off a $300,000 home, over the last 20-30 years, you ended up paying approximately $500,000.

Reverse mortgages are basically when you sell your house to someone else and you get to live in it.  Using the $300,000 home example.  At today's rates (using the calculator offered NRMLA), a 70 year old couple would get a monthly payment of $986 for life or a lump sum of just $172,564.

Unless they take the monthly option and one of those 70 year old's lives for another 42 years until the ripe age of 112, then this is a rotten deal.

Think it through.  Getting $172k for something you paid $500 is not a wise move.

The only way the math works out is that interest rates rise significantly and the monthly payments make sense assuming they live 20 more years.

Reverse mortgages are a bad idea!

Thursday

Investing For Yourself

I know investing for yourself by yourself seems daunting but it is not nearly as difficult as the investerati would have you believe.

The idea of outsourcing the most important decisions you make seems a little crazy to me but I understand that's not what you have been led to believe.

The brokerage industry are the masters of marketing, how else can they convince consumers to buy the exact same product and pay at least double and sometimes 20x as much?

Don't get me wrong, utilizing a financial guy is fine for ideas or hand holding, etc but NOT performance and certainly you need to know what that hand holding is costing you!  Would you believe me if I said that just a 1% fee will cut your account in half over thirty years!

You pump your own gas right?  But you didn't used to, what changed?  Just your perception, the product has always been the same.

Do yourself a favor and read about fees here.  Read what is #1 for stockbrokers.  Read about retirement killers.  Read how investing is like dieting.