If you get paid bi-weekly, break your installment loans (mortgage, etc) into accelerated bi-weekly payments to save on interest, reduce the length of your loans, and simplify your budget
What’s an accelerated bi-weekly payment?
Let’s take this example:
You just got a $250,000 mortgage at 4%, 30 year fixed. Your monthly payment on the mortgage (not including taxes, etc) would be $1,193.54. If you multiply that by twelve payments, you pay $14,322.88 a year in interest and principle. Divide $14,322.88 by 26, or the number of two week periods in the year, you get $550.86, a number I’ll bring up in a moment.
Now, if you take that $1,193.54 and divide it by two, you get $596.87. If you pay this amount every two weeks you’ll be paying about $46 more every two weeks than if you were to pay semi-monthly (that $550.86 I mentioned above,) and that amounts to an extra full payment of $1,193.54 a year that goes directly to principle. Your total yearly payout is $15,518.62.
What are the results?
Here’s the interest you’d pay over the life of the loan (360 months) with a standard monthly payment of $1,193.54:
$179,673.77
Here’s the interest you’d pay over the life of the loan (now only 310 months) with an accelerated bi-weekly payment:
$151,482.12
Not only are you saving $28,191.64 during the life of the loan, but you are also paying the loan down faster, and will have paid off your house in just under 26 years instead of 30.
Very true for "basic" life lessons, things that don't change very much over time. It's not a generation thing, just a matter of people having lived long enough to gain a lot of experience in various topics.
BUT an absolute disaster, when it comes to things that change over time. The faster and more fundamental things change, the worse would be any advice from people getting their experience before the changed.
So, basically: Learn to differ what topics you can get really helpful advice from older people, and what things you'd better not ask them.
or but washing machine in bathroom....
Very true for "basic" life lessons, things that don't change very much over time. It's not a generation thing, just a matter of people having lived long enough to gain a lot of experience in various topics.
BUT an absolute disaster, when it comes to things that change over time. The faster and more fundamental things change, the worse would be any advice from people getting their experience before the changed.
So, basically: Learn to differ what topics you can get really helpful advice from older people, and what things you'd better not ask them.
or but washing machine in bathroom....