MGTOW - and Lack of Homes for Children


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Deut 23:20 Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.

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6 minutes ago, mikbone said:

Deut 23:20 Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.

Definition of Usury:

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1828 Dictionary:

illegal interest; a premium or compensation paid or stipulated to be paid for the use of money borrowed or retained, beyond the rate of interest established by law.

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American Heritage Dictionary (present):

1. The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.

2. An excessive or illegally high rate of interest charged on borrowed money.

Looks like it doesn't say anything about compound interest.  It is just "unfair" or "illegal" interest.

Nothing about compound interest.

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1 hour ago, Carborendum said:

Nothing about compound interest.

Likely because Lucifer and his host hadn’t had the time and devotion to sink to this level of pure evil.

When I learned about interest and sat down with my father and discussed our home's 13% 30 year loan I was horrified.

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69K home 

Payment $ 763

First year you pay off $200 of the principal?!

Back then I associated $20 with mowing a single yard.

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Posted (edited)
38 minutes ago, mikbone said:

Likely because Lucifer and his host hadn’t had the time and devotion to sink to this level of pure evil.

You yourself have a compound interest mortgage on your house for 2.25% interest.  Did you feel ripped off?  As well you should not.  You got a great deal.  But you got hit on the refinance fees.  That's where they make the money on such a loan.

And that is the primary point.  For the lender to make a profit, they have to make money somehow.  And they will do it one way or another.  The only way to combat it is to shop around.  Competition is what will get you the most favorable conditions. * (see the info on Islamic law below).

38 minutes ago, mikbone said:

When I learned about interest and sat down with my father and discussed our home's 13% 30 year loan I was horrified.

We have not had 13% mortgage rates since the 1980s (as your chart agrees).  No, it would not have been a good idea to get a loan in the early 80s.

Being over 30 years since then, I'm guessing he's already paid it off by now?

38 minutes ago, mikbone said:

69K home 

Payment $ 763

First year you pay off $200 of the principal?!

Back then I associated $20 with mowing a single yard.

First:  If the initial mortgage balance was $89k, the home price was $110k.

Second: Those are incorrect numbers for a 13% loan. The only way I can see that possibly being real is if it is a HELOC.  But I tell everyone to run away from HELOCs unless they truly understand finance.  They can be helpful if you know what you're doing.  But most people lose their shirts because they don't understand all the rules, nor are they disciplined in their payment or spending.

And when you invest in the stock market or in a money market account or a CD, do you feel like you're cheating the bank when they pay you?  All those returns are calculated via compounding.

Compound interest is a double edged sword -- assuming the same APR

  • If you're keeping the house for a short period, simple interest would make more sense for the homeowner.
  • If you're keeping the house for a longer period, compound interest would make more sense for the homeowner.

Thus, if you tend to move every few years, leasing/renting would make more sense.  But the pressure of homeownership is so high in this country, that people don't bother to realize that most people tend to move every 4-5 years.  That's where lenders make their money.

Just because people make bad decisions financially, it doesn't make the practice evil.  Conversely, just because it is simple interest doesn't make it good.

*EXAMPLE: It is against Islamic laws to charge compound interest.  Yet some of the biggest banks in the world are Muslim banks.  How do they make their money?  Because simple interest loans are more profitable to the lender over longer terms, they profit if the homeowner keeps the home for a longer period.  Most Muslims will tend to live in the same place their entire lives.

So, it seems that the real problem with compound interest is that people don't understand finance enough to figure out all this stuff.  I just don't see that as a "sin" on the part of the lender, especially with all the disclosures that are legally required at the signing of any loan.  Ignorance is the enemy, not the process.

Everyone should consult with someone versed in finance and financial language to help them figure out what is best for them.  Unfortunately, math is now racist.  So, you need to consult with an Asian because, apparently, it isn't racist for Asians to learn math, just white people.

Edited by Carborendum
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3 hours ago, Carborendum said:

Being over 30 years since then, I'm guessing he's already paid it off by now?

Dad passed 5 years ago still miss him badly.

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(Daddy taking care of me as I was quite sea-sick)

Yeah, I omitted the down payment to simplify. The HP48 don’t lie though.

The real sin is setting up a 30 year loan, preparing the payment slips and not going over the complicated math with a simple honest man.

If you cant afford a 10-15 year loan you probably shouldn’t buy that house.

And the benefits of early extra payments cannot be overstated.

See also - OPEC, Jimmy Carter

Edited by mikbone
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5 hours ago, Carborendum said:

Could you explain why compound interest is so "oppressive"?  I've been familiar with it since 5th grade, and fully understood it in 7th grade.  I have no idea why it is considered evil.

Where to begin?  Compound interest is a seductive method to enslave and oppress the mases – making the rich much more rich and impoverish everyone else.  It distributes wealth to those that deserve it (by the sweat of their brow) the least.  As we read the words of Christ in the New Testament, we realize that Jesus often spoke of the sins of the wealth as being counter to the things of G-d.  There is nothing in any economy that capitalized on the corruption of wealth more than compound interest.

My brother once said that the way to determine if someone really understands compound interest is simple – whether they pay into it (becoming a slave) or get rich charging it.  Some simple facts.  Prior to the great depression 90% of the agriculture land, equipment and profits were privately held by individuals and families.  By the end of the depression 90% of the agriculture land, equipment and profits were in the hands of corporations and banks.   Following 9/11 the USA (and other economies) suffered a major recession.  The result was that in the USA all privately owned banks closed their doors forever.

During my lifetime I have watched as most purchases were by cash and check – neither of which were tied to compound interest –today it is nearly impossible to purchase almost anything without a credit card – all of which are tied directly to compound interest.  Perhaps I am wrong and have missed something but anywhere there is compound interest somehow connected – the profits from compound interest do not go to any individuals that sold their goods and services but to banking and corporate interests that finance and charge the compound interest.

Early in my marriage I sat down with my wife and showed her how purchasing a $300 item with compound interest and paying off the debt with the least required could result in paying over $10,000 for whatever was purchased.  In some cases – paying the least required (student loans for example) can result in the continual growth of the principle – meaning that the debt is never paid.

Islam recognizes compound interest as the most prominent indication of Satan’s influence and corruption.  This single doctrine is the engine behind 9/11 and their excuse to eradicate the Jews (it is a popular notion that the Jews are behind compound interest and banking).  Of course, this can easily be disputed but never-the-less it is the primary reason that it is easy for corrupt influences within Islam to recruit the less informed to their causes (as we are seeing through the coalitions within the LGTQ+ community (and others) to support antisemitism).  It may sound like a farfetched conspiracy theory but I doubt very much that you or anyone can find any where on earth today where there is currently exploration and oppression taking place upon humanity that does not have some connection or reference to economic activity associated with compound interest (and this I believe is the true engine behind our open borders, political campaign corruption and intrusions into our elected officials as well and public bureaucrats.)

As a student of LDS theology, it is my personal belief that the secret combinations and gadianton robber style of operations are the engines behind governmental corruption and just about everything else that is degrading the morals and values of our country – all of which is influenced by what ancient scripture calls filthy lucre – which is in essence the art of enslaving others through economic oppressive principles. 

I could go on and on – what I have posted is hardly even the tip of an iceberg.

 

The Traveler

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17 minutes ago, Traveler said:

The result was that in the USA all privately owned banks closed their doors forever.

I know of one privately owned bank that existed in the 1980s and still exists today.  I don't know if there are others, but the one ruins your "all".  FWIW.

Edited by zil2
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2 minutes ago, zil2 said:

I know of one privately owned bank that existed in the 1980 and still exists today.  I don't know if there are others, but the one ruins your "all".  FWIW.

Please name that one.

 

The Traveler

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6 minutes ago, Traveler said:

Please name that one.

MidFirst.  They claim to be the largest privately owned bank in the US.  My parents started banking there in the late 1980s when they moved for my Dad's job.  I see that they now have a branch in SLC South Jordan.  I may well switch banks...

Edited by zil2
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2 hours ago, zil2 said:

MidFirst.  They claim to be the largest privately owned bank in the US.  My parents started banking there in the late 1980s when they moved for my Dad's job.  I see that they now have a branch in SLC South Jordan.  I may well switch banks...

Very interesting – I need to do a bit more research.  A quick internet search indicates that they offer stock purchases and credit cards as part of their services.  I would like to know what private interests have ownership and in what %.  Never-the-less, you are correct they are listed as privately owned.

I do all my banking through credit unions because the laws governing them are different.  I sort of think of this as the lessor of whatever evils.    When I was in college, I was introduced to a credit union that was family owned out of Arizona.   The family that owned it was formed when the LDS Church sold its cattle ranch United Order (near Snowflake).  The family runs the enterprise like the united order.  The have expanded the enterprise into construction retail, lumber retail, food retail, engineering, architectural, hardware and of course banking and financial (credit union).  At the time I met with my father to start a similar structure in our family.  My father has the idea that no one should ever accumulate wealth except from their own labor – especially family.  His idea is to teach hard work and let individuals govern themselves and their finances. 

Thanks for the info.

 

The Traveler

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2 hours ago, Traveler said:

Where to begin?

Two things:

1. All you said was that compound interest is evil because it is bad.  That is circular reasoning.  You've given no explanation that goes beyond this statement.

2. All the "bad results" you mentioned would be just as bad if loans were based on simple interest.  In some cases, it would be worse.  It all depends on the numbers and methodology.

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5 hours ago, mikbone said:

Yeah, I omitted the down payment to simplify. The HP48 don’t lie though.

Sorry to hear about your dad.  It seems like he was a wonderful man.

Just to clarify the calcs.  Please verify:  What was the original mortgage amount?  Something about those numbers don't make sense.  You're leaving something out.

If the P = $89k; Int = 13% APR; Term = 360 months, then A = $985.  The first year would pay off closer to $300.  Not too far off.  But the problem is not the fact that it is compounded.  The problem is that 13% is outrageous.

Try the same loan with a 5% rate. 

A = $477; amount paid at 12 months = $1306.  (half the monthly payment and over four times as much paid off in the same time period.

If you don't believe my calcs, try an online calculator Here.  Give it a try.

Regardless, a lender can set up other conditions with a simple interest loan.  The fact is that people don't really look at the numbers or understand the math to figure out if it is a good option for them or not.

I don't see why it has anything to do with whether it is compound or simple.  It is the terms and rates that makes it usurious.

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1 hour ago, Carborendum said:

Just to clarify the calcs.  Please verify:  What was the original mortgage amount?  Something about those numbers don't make sense.  You're leaving something out.

All the original numbers were correct.  So, downpayment has nothing to do with the loan calculation.  It’s there so the bank can make some money if the home is repossessed and encourages the consumer to not default on the loan.

My father was a gov employee and likely qualified for a 5-10% down loan. 

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The calculator that you linked is a lie.  It is a marketing tool.  It requires a zip code to use, and inserts property tax and insurance.

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I may have to go re-czech my genealogy.

Maybe I do have some asian in me after all.

The loan that my father obtained required him to pay $205,779 in interest.

As the interest goes up, it does seem criminal.  I agree.

A 13% loan seems outrageous to you, but the average interest rate of new credit cards today is 24%.  

@Traveler has a point.

Edited by mikbone
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11 hours ago, Carborendum said:

Definition of Usury:

Looks like it doesn't say anything about compound interest.  It is just "unfair" or "illegal" interest.

Nothing about compound interest.

I’m not sure the Hebrew text, or the Jews or Christians who read it up until the last century or two, recognize that distinction.  My understanding is that Christians even into Elizabethan times considered charging interest to be morally suspect, if not exactly verboten (which is why the protagonists in the Merchant of Venice have to seek out Shylock the Jew).  Banking was supposedly one of the few professions open to Jews, because many good Christians just couldn’t imagine earning a living that way.

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2 hours ago, mikbone said:

The calculator that you linked is a lie.

The calculator agrees with the numbers you provided.

I had asked for clarification about what the actual loan amount was.  When that was clarified, that changed everything.  So, I agree with your numbers -- now that they've been clarified.

I still hold that my primary points are still valid.

1.  It was the 13% rate that was making it seem horrible.  It had little to do with the fact it was compounded vs simple.
2. It is most people's lack of financial literacy that gets them into trouble more than compound vs simple.
3. Everything bad that has been pointed out regarding compound interest can still happen with simple interest.

Nothing you've provided shows any of these points is wrong.

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26 minutes ago, Carborendum said:

The calculator agrees with the numbers you provided.

I had asked for clarification about what the actual loan amount was.  When that was clarified, that changed everything.  So, I agree with your numbers -- now that they've been clarified.

I still hold that my primary points are still valid.

1.  It was the 13% rate that was making it seem horrible.  It had little to do with the fact it was compounded vs simple.
2. It is most people's lack of financial literacy that gets them into trouble more than compound vs simple.
3. Everything bad that has been pointed out regarding compound interest can still happen with simple interest.

Nothing you've provided shows any of these points is wrong.

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11 minutes ago, Just_A_Guy said:

I’m not sure the Hebrew text

The Hebrew text uses the word: nešeḵ which is translated as "interest".  We then have to look at historical practice to understand what that means. (More on that below).

So, again, what is the difference between simple and compound from an ethical standpoint?  Is it the complex math that makes it "incomprehensible" to most people?  That makes it somehow "unfair"?

That might be a decent argument.  But, I'm having a hard time with that since it seems like fairly simple math to me.  But then again, most people don't understand numbers like I do.  So, there's that. 

This doesn't mean I discount it.  I'm saying that I just can't relate.

11 minutes ago, Just_A_Guy said:

or the Jews or Christians who read it up until the last century or two, recognize that distinction.  My understanding is that Christians even into Elizabethan times considered charging interest to be morally suspect, if not exactly verboten (which is why the protagonists in the Merchant of Venice have to seek out Shylock the Jew).

Throughout the Christian era, it made no difference if it was simple or compound.  Under Edward I (cir 1190 AD) decided he needed more money for the crusades, so he declared usury illegal, confiscated all the Jews' assets, and exiled them.

A generation prior to Shakespearean times, some of the reformers were revisiting the idea of lending money.  It was culturally frowned upon but legal by the time of Shakespeare.  But this had nothing to do with simple vs compound.

The more I think about it, it could be very deceptive to provide a simple interest loan for a very long term.  People who are financially illiterate may end up paying even more with a simple interest loan, even lower interest rates.

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The loan and banking system is way more confusing and shifty than one would think.

1) Compound vs. simple interest

2) Annual percentage rate is a big freakin lie - it is usually calculated monthly (or even daily).  This makes a big difference.

3) Points

4) Mortgage Insurance Premium

It goes on and on.  

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