On Home Ownership, Financial Freedom, and Benjamin Franklin by Tom Levine1. ON BENJAMIN FRANKLIN:
2. ON HOME OWNERSHIP:
3. On Financial Freedom:
4. ON THE BI-WEEKLY MORTGAGE:
5. ON THE 15 YEAR MORTGAGE:
6. CONCLUSIONS:
1. ON BENJAMIN FRANKLIN:
A: In 1757, Benjamin Franklin published "The Way To Wealth", a basic summary of his 25 year Poor Richards' Almanac. In "The Way To Wealth", Honorable Mr. Franklin states
following:
"Then since, as he says, borrower is a slave to lender, and debtor to creditor, disdain chain, preserve your freedom; and maintain your independency: be industrious and free; be frugal and free. At present, perhaps, you may think yourself in thriving circumstances, and that you can bear a little extravagance without injury; but, For age and want, save while you may; No morning sun lasts a whole day..."
B: There's a chock full of great wisdom to be gleaned from this paragraph of text. I encourage you to read it carefully, and absorb as much as you can from this man. He was, after all, just a man. But a great man. In fact, Benjamin Franklin believed that you are no different than he. He also believed in hard work, and perseverance, and value of time management. These basic precepts, if mastered, could lead you down same path of immense wealth as Benjamin Franklin..
C: I also want you to notice, that Benjamin Franklin refers to borrower as a "slave to lender."
2. ON HOME OWNERSHIP:
A: Now, I personally advocate a strong belief in power of home ownership, but of course, that requires taking out a rather large loan. So, I would submit to you that this is in direct contradiction to what Mr. Franklin said, because by taking out that loan, in order to take ownership of your first piece of real estate, you are, in fact, becoming a borrower to lender, or as Mr. Franklin would say, a "Slave to Lender".
B: But, I simply must, initially, sway from our founding father, on this one. Times have, in fact, changed. It is impossible for any of us to purchase a home in today's times without placing oneself in position of slave to lender. How is it possible that an average working American, with no assets, no rich uncles, and no magic potions...How is it possible for that guy to buy a house, without a loan.
C: Well, frankly. It's not possible.
D: So, I am indeed, OF COURSE, advocating a mortgage for first time homeowner. In other words, I realize that I am advocating idea of intentionally becoming indentured servant to lender of your choice. But, what are alternatives really, Mr. Franklin? What can a 21st Century American do, to get into real estate, without borrowing money?
E: And with that all said, I absolutely agree with every word spoken by Benjamin. I do think you are, in fact, a slave to lender when you buy your first home.
F: I also think it's easiest way for you to make it to your first, cool million.
3. ON FINANCIAL FREEDOM:
A: So, I'm about to put a Twist on whole subject. For me, anyway, story begins with signing of your first deed of trust, and with singing of your first, big mortgage.
B: From there, you are on a quest to freedom.
From there, you are on a quest to independence.
From there, you are on a quest to removing lenders' bonds which shackle you.
From there, you are on a road to pay off your loan....and pay it off, as quickly as possible.
Do this, and I say, you will be eons ahead of everyone else.
You will no longer be a Slave to Lender...
You will be your own Benjamin Franklin.
You will be FREE.
C: You simply must restructure your loan to pay it off faster, either in beginning, or during a refinance process later on in your journey. Most people pay their mortgages off in 30 years. Some people walk down dangerous road of messing around with Adjustable Rate Mortgages, and taking risks that probably shouldn't be taken, only to discover that they are later in a required position to refinance their loan, irrespective of rate, and subsequently add an extra 5 years on to fully realized term of their loan. So for them, and many home owners, lender bonds them to 35 years, 40 years, and beyond.
D: Benjamin and I want you to pay your loan off much, much, much sooner than that.
4. ON THE BI-WEEKLY MORTGAGE:
A. Bi-Weekly Mortgages, otherwise known as "Accelerated Payments"is nothing more than a 30 year, fixed rate loan, in which you add one additional payment a year. That's ONE. So, if you pay $1000 a month, for example, a Bi-Weekly mortgage is structured so that after 12 months, you will have paid $13,000.
