18 Comments
I fundamentally changed the day I finally worked out how much mortgage debt interest I'd paid out throughout my working life time. It was in the multiple hundreds of thousands of dollars, and even worse in today's money. Yes, we started at about 19.5% (if I can remember properly) but it was 'only' in the tens of thousands in those days. And you young ones think you've got it tough?
bw,
perhaps it's a generational thing(I'm 73),but I just think about in a fundamentally different way. Fortunately,so do my sons and their wives.
When I married in 1969,it simply never occurred to me-or to anyone I knew-not to buy whatever I could afford. That was a max. of 3 times my salary and no account taken of my wife's income. Yes,I was paying interest to the Building Soc in Scotland,but as long as I kept paying,they couldn't just sell it from under us. I feel so sorry for those who now simply can't afford to get on the housing ladder. Many of them are likely to be poorer in retirement with continuing rental payments,than they would have been with a paid-off mortgage.
For many,rent simply is 'deader' than mortgage interest.
That's your fault for taking out a mortgage back when house prices were the equivalent of a house deposit today (when compared to multiples of income). If you'd saved up and bought the house with cash then you would have saved yourself a bit of money, particularly when the interest rates on your savings would have been significantly higher too.
I have often wondered why this is not a fundamental part of the syllabus in fourth form maths. Very simple and something we all should know how to work out from a young age, before we get a steady income. The end result should be that no adult should need to have this explained to them.
Math deficit is rampant. Yes, folk do not know how to work it out in any way. That you actually can work it out is a new idea to them.
When you go and buy that $1500 fridge, you can usually bargain it down to say $1200. But then in "Interest Free - one week only" Strangely you can't bargain it.
Try explaining that to somebody who thinks they just got a good deal that week. You can't explain it.
Deficit in the 4th form maths syllabus for sure.
I certainly agree that financial literacy should be taught at schools, but not in Maths. Maths should be a very particular and disciplined subject and should not be muddied or confused by introducing other subjects like economics, which is where this subject belongs. I suspect that this sort of thing is being done quite a bit with maths in NZ schools and as our international rankings indicate, we are not improving our position.
Maths skills once mastered are then applied in other subjects, not the other way around. A bit like English
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11358227
You might find they throw in a sneaky "just pay a one time establishment fee" line into the ad to ensure you pay 5% upfront for the 6 months interest free (10% pa) just in case you are smart enough to shift it out in time. Then of course that amount must be repaid before any new purchase balance is touched etc, etc, etc....
the key is to then treat it like a loan. Pay as much as you would have on the loan and knock it out real quick.
The temptation is to pay only minimum payment, use it to buy more "stuff' and think "available credit' is your own money to spend.
And then the low interest rate expires and away you go again
"............. I couldn't find their online calculator (Update: there is one, but crucially its results exclude fees!......)"
Really ! That little omission should be criminal. Boys in Blue should be around there putting on handcuffs. But oh well, it's probably only going to deceive the uneducated and poor, so no problem.
I think pure maths should be kept as it is but should not be compulsory. Most students would instead move over to doing a practical maths course which is compulsory and always starts with the big picture and then works back. Dare I say it, I just don't think pure maths is helpful to most students.
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