The financial system is just a parasite institution. It sucks the blood out of the ordinary people. Mortgage, credit card...... How the hell should they make so much money out of nothing? A mortgage will add 50% plus burden to a house owner, and the property tax. (How is the US not a socialist country by collecting such huge taxes?) I don't mean banks shouldn't exist. They just can't add value like in the production line. But after all they belong to sort of helping hands. Well, the ordinary people believe in the money-loaning theory and practice. They don't care. Life is too short, right? And the highly paid lawyers and accountants, do they really create VALUE? The opportunity expense is just too much, in my opinion, for the whole system. How the stimulus and bailout plans will really work, if they can't produce value or help to create value? I am not a Marxist, but I can't help thinking Karl Marx is laughing his asses off in his tomb. Just some random thoughts.
mortgage rates are around 6%. you can borrow money you don't have at 6% to provide a home for your family. i'd call that value. i rag on banks and lawyers constantly....but this is taking it a bit far.
It's called INFLATED value for you, sir, or EXPLOITATION for the banks, if there is such a word in your dictionary. You eventually paid for your mortgage, didn't you?
Of course. But the average person doesn't have hundreds of thousands of dollars lying around to pay TODAY....and if they did, they could still beat the 5-6% they're paying in interest over the 15 or 30 year period of their loan.
You have to weigh that against opportunity cost. For example, I borrowed money from a bank to purchase a car, I had the money to pay for the cash, but if I were able to lock the rate in a low APR (4.9%) and that I think I was able to make more money off the money (say a 8% return) in other investments (i.e. stocks) you wont (and shouldn't) try to pay that money back fast at all. However, different investments are different risk. I can lose most of my money in the stock market and not be able to pay the bank back at all, at which the bank not only loses future income stream of interest payments but also their original loan amount. Whatever loans a bank gives you is kind of an investment in you, the interest is their assessment of return acceptable for the risk they are taking. Of course, with all the new financial products that's being showing up, especially in mortgage, this got muddled for all parties (investors, consumers and probably the banks themselves) in the correct assessment of return on the risk.
So if you take a loan out to get a college education, and end up with a better job that makes more money as a result, did you make money by taking out your loan?
Income Tax+sales tax+property tax As a single commodity, the accumulated tax for a house in a life time is just staggering if you know the simple numbers. A house owner is first screwed by the banks for a mortgage. You pay it by cash and you think you're free for "ownership"? Uncle Sam is waiting for you right at the corner. Let's not call it names, let's call out the simple facts.
what? you get to deduct interest from your income for your home mortgage. so don't own a home....i'm not sure i understand the point of all this. is it the banks or the government or just "the man" generally you're upset with? or is it:
I'm not sure anyone does. The guy has at best a 1st grade understanding of finance, then starts complaining about personal tax levels in the US, when were pretty much at the low end of the spectrum internationally. Want lower taxes? Move to Korea, or Mexico...
None of this makes any sense. The fact that there are costs to home ownership is neither surprising nor unique. What sales tax, exactly, are you paying on your home? And what income tax?
I am sure you know all the financial knowledge practised by wall street, which benefits millions of people on main street. I am also sure your education level is way higher than 1st grade, when you spell the following: Since you don't consider the tax level is too high for your income, it's all good
So what you're saying is, you either can't save money, or you don't know math. 'Cuz, long term, that's really all you need to succeed financially in this society (even now).
For the rich, they can save money. For an average Joe on the street, he just can't save too much if he wants to live a "quality" life. He is screwed by the rich and he is used to it and he is enslaved. My point is? Too much tax. You can call me stingy and flame on.
You are mistaken in your assumption on savings and debt. Prosperity in America is only truly achieved when your are debt free and have savings or investments that generate cash flow. So you are describing the "rich" far too inaccurately. There is difference between the highest income earners and having wealth. I know people making 6-7 figure income yet having all their money tied up in motgage payments, car notes, credit cards, loans etc... Savings at any level of income is the ONLY way to become wealthy. Its about increasing the money coming in and decreasing the money going out. Apparently Americans were good at that for almost 200 years then we began spending and borrowing our way through life.
Wait, are you compalining about the banks or about the taxes? Both? How about living in a country where the infrastructure allows you to have a standard of living you considered "quality"?
The only point I agree with you on is property tax. I believe that in the USA you should be able to buy a piece of land and just live there without having to pay the government every year. One of my fantasies is to buy a small parcel and just live off of the land hermit style. But with property taxes, that would be impossible.
