finanshal: morgage payment (house payment), interest, cost, time tu pae off
loan types, refinance, xtra paements=save money and time.
Compound interest: save & invest...how yer money gro
how much money yu need tu save tu retire=save + kompound gro
inflation: future value of money.
Time span, date, add time & dates, werk daes, how old are yu?
Convert units...length, area, volume, mass, time, energy, power, speed, etc.
solv math problems:sort, average, mean, quadratic formula, primes, fakters
Sum sites start with "deside if it make financial sens tu bi or rent".
That is the rong quesshun. A home is more emoshun than money sens.
Others sae oen-yer-home is the amerikan dreem. It is ok tu dreem,
but yu kant liv on dreems. Sum sites sae a home is an investment kauz
yu bild "equity". Yu kan then make munee wen yu sell it or rent it out.
This is hogwash. Yu dont bi tu make munee, yu bi tu hav a plaes tu liv.
The storees bout the munee yu kan make R gratelee xaggerrated.
The storees bout the hous is a botomless pit is closer, but overbloed.
The reesuns tu bi R not gaejed in dollars & sents.
The hous is a statement bout yu. Wen yu rent, yu R foot-lues &
fansee-free...a vagabon. Wen yu oen, yu R upstanding pillar əv the
kommunitee. Well, maby onelee an averaej joe hu aksept responsabilitee
& werk hard for wot yu want. A hous require lots əv werk. If yu R
not redee tu werk for it, dont duit. The werk starts on dae 1. Yu kan
yuzyally find a plaes tu rent in a dae or 2. Tu find a home will take
months. Yu kan oft du paperwerk tu rent in 3-4 hours. Tu bi a hous
will take 1-3 months, just for the paperwerk. Landlord mae want munee
up front for "sekerity deposit" & "kleening fee" & 1-2 months rent.
Banker will want a down paement & so manee fees, no-won kan keep trak
av em (klosing cost). Yu gotta be init for the long haul. Yu kant
chaenj yer mind & walk awae. Big up-front kost require "komitment".
The biggest advantage əv oen yer home: it is yers, yu oen it,
yu kan du pretty much wot yu want at home...free, independent, proud.
Wen yu bi, yu get rid əv the landlord. Yu get more freedom but
more responsabilitee. Yu gotta du stuff landlord did. And werry
bout all the problems that kan kum up. Most əv us hav the erj tu stae
in won plaes, put down roots, join the naberhood. The hous is a simbel
av stability, safety, maby even pride...home.
Sum renters komplaen bout restrikshuns the landlord impose. Then
em bi a hous in a homeoeners asoseeashun. Then em find out wot 1000
paejes əv restrikt look like. Look b4 yu leep.
In NE kaes, yu gotta look at the cost bekauz yu gotta pae for wot
yu want. Tu bi, yu gotta konvins a banker tu lone yu munee...get a
morgage. The stuff yu gotta du tu get a morgage kum later. For now,
assume yu kan get a morgage.
The program calculate $/month kost əv oen-a-hous so yu kan kompare
it tu rent-a-shak. Rent is kleerkut...yu giv landlord x $/month.
Rent oft kuvers water/sewer/trash. It mae inklude other yutilitees.
Hous cost...yu gotta pae for a lot more thangs... taxes & inshuer,
more yutilitees, maentenans, upkeep, replaes, fix, impruev, kleen.
And dont forget the morgage.
Most hu bi, get a bigger plaes. If it kost more, dont dispaer, prepaer.
Theer iz a lotta hipe in the media bout how yu kan save on Federal
inkum tax bekauz yu kan dedukt the morgage interest & hous taxes.
This depends on interest rates, how much money yu make, & how hi the lokal
hous tax rate.
Tu be werth NEthang, the itemized dedukt gotta be > standard dedukt.
=9700$ for joint retern(2004). The median houshold inkum in US in 2001
(latest data from US sensus buro) was 42,228$/yeer.
If that famlee got the max morgage em kan afford (program 7, output 2)
hav perfekt kredit, dont hav NE other debt (& thus get the max-max morgage)
Result depend on interest rate.
In Mar 05 with 5.79% interest on 30 yeer lone, max lone=118,690$.
Yu pae 6,832$ interest in yeer 1 (less in yeers 2-30).
If yu liv in area with ski hi hous tax=2% əv hous value, hous tax=2,414$/yr.
Interest+tax= 9,246$/yr. Not nuff tu itemize. Yu gotta hav 454+$
av other dedukts tu itemize dedukts & save money on fed inkum tax. Even if
yu kan save with itemized dedukt, yu oenlee save a % əv how much yer
dedukt is over 9,700$. If itemized dedukt =10,000$, yu save a wopping 75$.
Wen interest rate is hi.
In Feb 06, interest=6.25% on 30 yeer lone. Max lone=114,496$.
Interest=7,692$, hous tax=2,330$. Sum=10,022$. Yu kan save 130$ on
yer federal inkum tax. But from yeer 3 onward, the interest is tu small.
No more save money bi itemizing dedukt. Remember, this assume yu liv in
hi tax area, like Kalifornya or Nu York.
Note...thees numbers assume yer down paement is <20% əv hous cost.
This meen yu gotta pae xtra 0.5% interest for PMI (private morgage inshuer).
So reel interest rate =6.25+.5=6.75% (hier % interest zampel).
The top 20% inkum fat-kats hav median inkum=83,500$/yeer. Em kan
save on fed inkum tax even at the lo 5.5% in april 2004. Em kan get a
240,649$ morgage. First yeer interest=11,914$, hous tax=4,359$
Em kan itemize dedukt & save 1,700$ on Federal inkum tax.
In Feb 06, max lone=226,875$. Interest=15,240$, tax=4,577.5$.
Sum=19,818$. Em save 2,889$ on fed inkum tax.
Thus, deduktabel interest is a subsadee for the rich.
note...banker oft kall the interest "finance charge". just tu konfuze yu.
Theer R taels bout rent alwaes goes up evree yeer and yer morgage
paement staes the same. This is banker proppaganda...him wanna make money
bi sell yu $. The paement tu banker for interest + prinsapel is fixed.
But eskro goes up evree yeer kauz taxes go up evree yeer...garanteed.
Hous inshuer almost alwaes go up. The other kosts əv liv in a hous
go up more or less same as jenral flate rate(inflation).
Zampel...100,000$ lone at 5.5%, 30 yeer...pae tu banker=567.79$/month.
eskro=208.33$/month. But if flate rate=5%/yr, in 30 yeers, eskroe=
899.99$/month...more than yu pae tu banker.
Rent depend on suppli & demand. It mae go up, or down, or not.
Bewaer əv "analysis" that sae yu kan sell the hous after 5 yeers at
a big profit. Em sae hous pries go up 8%/yr...46.9% in 5 yrs. Sell
100k$ hous at 146,900$ minus maby 5000$ cost. Yu net 42,000$ profit.
But yu only put up 2000$ down, so yu make 2000% profit. That is kalled
leveraejed tu the hilt. Sounds grate. But theer R probs. Biggest
hole iz...yu gotta find a plaes tu liv. So yu bi a nu hous. Pries iz
as ski-hi as the won yu sold. Yu rolled over intu nu & bigger morgage
fer nuther 30 yeers. All yu get outta it is bigger bills evree month.
Du this a fyu times & sudden...yu R 45, get laed off...no job, no inkum.
No hope yu will ever find a reel job...won that pae even 60% əv wot yu
had yesterdae. Takes 2 yeers tu find job as a dishwasher. Bi then
the banker took bak the hous, yu went bankrupt...lost evree thang.
Base yer life on fanasee, die bi fanasee.
Even bigger fanasee...interest onlee morgage. Folks looking for
eezee wae tu get rich...gotu "seminar". Hukster sell yu on idea.
Get morgage weer yu onlee pae the interest...not won dime tu pae down
prinsapal. Yer monthlee paement is less. Yu hav more free money tu "invest".
Him sae: put yer money intu more houses. All finansed same wae. Basik
idea is hous "value" alwaes go up. So all yer "investments" in more
houses alwaes sho a profit. If yu ever need NE $, yu kan sell won əv
yer hord əv houses. This is an empire bilt əv plae kards. Wen the
smallest wind kum, it blo down yer kard kassel. Yu go bellee up.
Note this idea inkludes...yu gotta rent all em "propertees". Yu
bekum a landlord over empier of 20 houses. Thank bout if yu wanna
werree bout renters alwaes late paeing rent, alwaes komplaen bout
evreethang bout the plaes em rent, legal hassels tu evikt nonpaers
that go on & on in kort fer 5 yeers. The lawyers will bankrupt yu if
the wind dont get yu first.
program 3
calculate the paement tu banker tu pae off a lone(morgage).
calculate interest, total kost, balans, du date, payment skedyuel.
dont inklude taxes & inshuer
program 3 standard output...paement, interest, total $ yu pae
opshuns: 1. print numbers evree yeer...inkludes unpaed balans.
2. print numbers evree month (week, biweek, ets)
3. print paement skedyuel (amortizashun tabel).
4. add xtra money with eech paement & see how much yu save.
Note...$/month tu pae off lone is fixed, but eskro goes up evree
yeer bekaus hous taxes go up evree yeer & hous insurance mae go up 2.
Theer iz a lotta hipe bout a home as an investment.
it iz
Yu bi a home tu liv in & hope tu be happy. Yu bi an investment tu sell
later & hope tu make a profit. If yu tri tu sell yer home, weer yu
gonna liv? Will yu be happy homeless?
Kost av a lone depend on $ yu borro (balans), interest rate, & time span (yeers).
Shorter lone: yu pae a lot less interest so it kost less. 15 yr lone:
the % interest is a littel less than a 30 yr lone.
Reelter probablee will warn yu tu NOT get 15 yr lone. Her will sae
it put yu at risk if yu luze job or hav big medikal bills...yu mae hav
prob make hous paement. The wae round this is tu get 30 yr lone,
but evree month send in dollars for a 15 yr lone. Then if yu ever hav munee
probs, yu kan send in less money for a wile.
Other opshun is tu "refinans"=get 2nd morgage & borro $ from self.
Aft 5 yrs paeing like a 15-yr lone, balans=76,308$. Yu paed off 23,692$.
Dont that feel good? Du yuno better wae tu save 4,845 $/yeer?
Puter calculates numbers 2 waes:
1. % interest stae at the (very lo) start rate.
2. % interest go up at max rate set in lone papers.
ARM (Adjustabel Rate Morgage) has loest interest rate əv NE lone.
As əv 15 Apr 04, for 1 yeer arm (% fixed for first yeer), if yu hav the
best kredit, yu pae 3.69%. In retern, yu aksept the risk interest rate
mae go up & yer paement mae go up tu.
Program got tu big...puter kant handel it. So me kut it in 2 parts.
part 1=most opshuns
part 2=make paement skedyuel (amortizashun tabel)
The maen prob with ARMs is folk hu bi em kauz it iz the onlee wae em
kan make this months paement. Em dont thank bout the fyucher kauz em
liv hand-tu-mouth alredee. Em just hav a vaeg hope thangs will get
better sumdae. ARMs hav the loest interest rate. Its theer onlee hope.
ARMs had a lotta probs in the erlee yeers, so the Fed govt steped in
an imposed rules on the bankers. The rules sae banker gotta tell yu
bout the "terms". This meens him gotta menshun all the vareebels and
tell yu how him pute the numbers. ARMs hav a lot more vareebels than
a "standard" fixed rate lone. Sins the interest rate varee,
him gotta sae how oft, how much, how kum, & spesifi limits.
Normal...theer is a start time pereeod wen stuff is fixed...paement
& interest. Normal=6 months tu 1 yeer. Then thangs chaenj. The %
interest gotta be based on sumthang. Normal=it is based on sum tipe
av lone, yuzually on a lone INDEX. Most kommun index nowadaes is US
fed govt 1-yeer "bill". This is a govt IOU. Bankers thank unkel Sam
is good risk, so him pae the loest % in town.
The BASE is the thang (index) the banker yuz. The MARGIN is the dif
tween the base & wot banker charj yu. Next, banker gotta sae how oft
him calculate nu % interest. Norm=6 months or 1 yeer. Then theer R kaps.
Kaps R limits tu how much yu gotta pae...max size əv chaenjes (eech won
& max for the life əv the lone). Ex...step max mae be 1/2%=max him kan
up the interest rate eech time. Life time max interest mae be 10%.
If interest rate go up (99% əv the time), yu mae hafta pae more $/month.
Hier % meen yu pae more money tu interest & less tu pae off lone. If % get
tu hi, yer paement mae not kuver the interest. So banker tell yu tu
pae more $/month. Papers from banker gotta spell out the rules bout
how him duit. In sampel belo, paement dubbels from 460$ tu 853$.
program 7...Calculate max lone yu kan get/max morgage yu kan bi
Hous-poor...yu R deep in debt...on the verj əv go tu poor hous.
(nowadaes kalled homeless), bankrupt, bellee up, broke & tied in nots.
Yu stretched evreethang tu the limit tu get the max morgage yu kood...
the most spensiv hous yu kan (maby) pae for. Then kame kid 1.
At wons, yu spend 30% more but wife had tu quit her job, so inkum go
down 30%. Now yu skrape penees tu tri tu keep the banker at bae.
Yu R behind on paements, maxed out 20 kredit Kards, debts keep groing
like mad, krediters bang on yer door at nite. Kids hungree. Kid 5
weers hand-me-downs from 2, 3, & 4. Kids trash the hous faster than
yu kan kleen up behind em. Draen baked up, but yu kant afford tu kall
a plumber. The inside əv yer 13-yr old kar looks like shit kauz 6 kids
and 2 dogs luv tu bouns on the seets. kid 1 wines kauz yu wont bi him
an 80,000$ Mersaedeez (106,708.83$ with interest...yuz program 3...yer
a poor risk & gotta pae ski hi interest). Orthodontist tri tu kollekt
8000$ yu oe him for the uglee braeses on kid 3. Hit man from lone
shark thretin tu du nonnamed dismemberment tu non spesified bodee parts.
All bekauz yu HAD tu impress yer nabers. Was it werth it? Yer kall.
program 8...compare 2 lones, how it affekt paement, kost, interest
Calculate paement & kost for 2 similar lones (from 2 dif bankers).
This adds kloesing kosts tu lone bekaus if yu pae kosts outside the
lone, yu reduce savings that kood ern interest... the interest yu forgo
is a kost. Approx bekauz interest on savings < interest on lone.
program 9...Get effektive interest rate əv points & kloes kosts
Yu kan save money & time if yu konvert morgage tu biweeklee.
Yu pae banker evree 2 weeks insted əv evree month. Puter calculate
how fast yu paeoff morgage & how much yu save. Kan be big buks.
WARNING...
Beware əv krooks hu send junk mael saeing em will duit fer yu for
onlee 179.9999$. Most bankers chaenj theer papers free. A greedee
banker mite charj 25$. Maby a fone kall will duit in 10 minutes.
Biweekly paements...Divide $/month bi 2 & send in that number
evree 2 weeks. But yu pae 26 times/yeer. So same as send in 13 monthly
paements=like 1 xtra monthly paement/yeer.
Note...make shuer banker will kredit yer akkount wen the money kum.
Yu redues balans after 2 weeks & thus pae less interest unless banker
kant handle NE chaenj tu his rigid skedyuel.
Even simpler...send in xtra money with eech paement. If yu send in
600$/month tu banker (prinsapel+interest part onlee), 1 xtra paement=
600$=50$/month. So send in xtra 50$ with eech monthlee paement.
Get almost same result as biweeklee pae. Run program 5, output 2 tu
see how xtra money evree month will pae off lone erlee & save interest.
run program 5,output 2
Cost əv living numbers for past yeers kum from Federal Reserv Bank
at Minneapolis (numbers for 1800 intu 2008). Last 12 months data from
Buro əv Laber Stats.
A dollar in the hand is werth 2$ 5 yeers from now (or 6 yrs, or...).
This is the time value av munee. A dollar now is alwaes werth more than
a dollar in the fyucher.
The present value əv fyucher munee is same as the value əv yer money
x yeers in fyucher with flate rate=x%...yuz output 5 tu calculate present value.
Diff wae tu look at it...present value is based on how much a streem əv munee
(inkum) is werth...see program 20 (annuity).
program 16: Kompound interest make yer pile-o-doe gro
save money for tu retire on yer pile-o-doe.
Similiar tu IRA in that yer munee gro tax deferred til yu take out money
(assumed tu be wen yu retire). The kumpanee takes out the munee, so yu
never see it, so yer not tempted tu spend it.
401k and its kuzins hav this going fer em...
1. Em redues yer taxes evree yeer. Evree dollar yu put intu the 401k kuts
the pre-tax inkum on the form yu get from the Kumpanee at 1040 time.
2. The money gro tax deferred. This meens yu delae paeing taxes on the
ernings (interest) yer munee gets til yu take it out (wen retired).
3. Yu kan put more money intu a 401k than intu an IRA (13,000$ in 2004).
4. The kumpanee mae add xtra $s tu yer akkount (kumpanee match).
The biggest prob is...the "plan" gotta be offered bi the kumpanee yu
werk for. Onlee half əv full-time werkers in US werk for rite kumpanee.
The program assumes yu will hav a job with good pae for as long as
yu want. It assumes yu will retire wen yu want...not wen foersed tu.
In tudaes werld this is rather optamistik. In the reel werld, yu R
likely tu be laed off at aej=45 & never agin hav a reel job. Yu will
be foersed tu take NE job yu kan get & aksept wotever em pae yu. Yu
gotta liv yeers at a time wen yu dont hav NE inkum tu speek av.
Sum geeks hav a program that ask yu how fast yer fyucher kumpanee
pae will go up. This is so outraejus, it is silly. It dont hav NE
konnekt tu the reel werld...we kant even predikt IF we will hav a job
next yeer...let alone wich state the next temp job will be in.
program 19...tu save & gro nuff money tu liv on wen yu retire
Will yu hav nuff money tu retire? or for NE big fyucher spend?
Tell puter how much yu hav now, wot yu wanna hav. Puter calculate
$/month yu gotta save.
program 20...annuity...wen yu retire, take out fixed $/month
Yu hav a pile-av-doe saved up. Time tu retire so yu wanna liv on it.
Yu wanna no how much $/month paeout yu kan take out & hav it last n yeers.
This is similar tu bi an annuity from an inshuer kumpanee. Em will sae
how much $/month based on how much money yu put up, how old yu R, wot %
retern em spekt tu get bi investing yer munee, the paeout opshun yu
sine up fer, how much profit em wanna make, how big theer spenses R,
How much em set aside as a rezerv tu kuver possible probs, etc.
Yu kan be yer inshuer kumpanee. Avoid the hassels, take all the
profit, no kosts, & yu kan chaenj yer mind NE time yu want.
Yuniversity proffesers konsider an annuity tu be the present value əv
fyucher munee. Em sae it is the money yu gotta put up tudae tu get a stedee
streem əv money kummin in evree month. So all the fyucher money yu get is now
werth x$...how much yu gotta put up tudae.
Program 21...lone such as kredit card or revolving kredit
Averaej Amerikan houshold Kredit kard debt=8,329$ (Des 2008).
Averaej av yu hu hav 1+ KK:10,679$
Apr 2009: averaej kk interest rate=14.17%.
185 milyun famlees in US hav 1+ kredit kards. (hard tu beleev sins US govt
sae theer R 75.6 mil famlees in USA).
averaej interest rate= 11.2% tu 18.9%, (depend on hu yu beleev)
24% av spend is on a kk or debit kard.
20% hav maxed out all theer KK's.
40% av Amerikan famlees spend more than em ern.
averaej famlee KK interest=83 tu 125 $/month, (depend on hu yu beleev)
banks in Amerika send out 5.3 bilyun kard offers/yeer.
US census buro sae US hav 111.3 milyun "housholds" in 2003 (but oenlee 75.6 mil famlees).
this impli 48 kredit kard offers per "houshold".
Program 22: bmi, due point, heet index, wind chil, ets
Theer iz a site on the web tu get a birth date wen yuno die date
and how old wen him died. Yu kan du that heer...yuz output 2 and input
negative numbers for yeers, months, & daes. Tu be akkurate, yu gotta
no all 3.
for tek geeks
pi=3.14159 26535 89793 23846 26433 83279 50288 41971 69399 37510
if yu thank yu kan gage NEthang in reel werld tu 50 digits, yu got
a nut lues.
************
Theer R 29.53059 daes tween 2 full moons
Averaej yeer is 365.237998 daes...from start əv spring tu next time.
=31,556,563 sekonds
this is "solar" daes=sun daes=from noon tu noon (relative tu sun)
From this yu kan predikt wen eester kum...but cherch bosses got theer
wae based on outta date astronomee as əv 1200. Em R rong 2% əv time.
************
The sun puts out 3.8*1026watts. It bern 4.2*10**9 kg/sec tu duit.
It konvert mass tu lite & radiate it awae, so its gon, gon, gon.
Less mass meen less gravity, so planets muve awae from sun. Erth muve
out bout 1 meter/100 yeers.
************
Yuniversal konstants...
G=Nutons gravity konstant=6.6742*10-11 (meter^3)/kg-sec^2
h=planks konstant =6.6260693*10-34 juel-sec
c=speed əv lite =299,792,458 meter/sec (govt define this as exact)
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