Friday, October 10, 2008

The Sky is Falling - The Stock Market - How to Feel Rich

The sky is falling, the stock market is falling, gas prices are falling, mortgage rates are falling, housing that has been priced too high is not selling at those too high prices!!! Maybe people who have average wages can now afford to buy a house in the price range they can afford! Maybe now we can afford to buy gas!

When things appear to be bad, work your thoughts to a happier place. Look for the silver lining. Expect good. Expect to be happy. Expect good things. If you expect good things you'll get them. If you expect bad, guess what? You'll get bad.

Let's look at mortgage payments. I think somewhere the formula my father taught me got lost. He always said "never pay more per month for rent or mortgage payments than you earn in a week." That's real simple isn't it!?? I've sort of wiggled the rules a tiny bit and said to myself at times that I can rent a place or buy a place for what I gross as opposed to what I net per week, but other than that, I stick pretty much with that formula. Now I include the cost of taxes and insurance in that formula when I think about mortgage payments. At present I'm obligated to pay $248.00 a month for those things, and it is actually a bit high for being on Social Security, but its comfortable.

The other formula my father taught me was Priority Paying. First you should pay for your shelter, then you should pay for your means of getting to work (i.e., your car and your insurance for your car), then you should pay for your food, utilities, and phone (communications, including cell phone and/or internet) should come last on that list. After that comes clothing and then you can buy things you want.

How to feel rich all the time: My formula for that is to take the first $100 I don't know what to do with and get a $100 bill. Put it in a secret place in your wallet. Then when you go shopping you can look at things you might want and think "I have the money to buy that if I want to".... I've been carrying that $100 bill for five years. I haven't done without anything, I really wanted or needed to buy but at the same time I've saved money and started 3 savings accounts and I feel richer all the time.

Now the bad news...I was forced to file bankruptcy in 2004. I had a triple bypass surgery and I didn't have insurance. Even if I had insurance it would have left me owing nearly $40,000 that I didn't have the money to pay. I didn't lose my house, or my car, or anything else. The only choice I had was to file bankruptcy or go on Medicaid, i.e., let the state pay the bill and then when I'm dead and gone they get my house. In the meantime, they would have had the right to annoy me interminably for the rest of my life. The bankruptcy wasn't hard, I'd quit using credit cards in 1996, so I didn't really have to worry about credit, except perhaps to buy a car. I hadn't had credit to buy a car since 1986, so that wasn't a big problem either. I reaffirmed my mortgage, so I kept my house.

PS the bankruptcy wasn't hard because as a paralegal I sometimes prepare bankruptcy paperwork for people. I always tell them to see an attorney about it before hand so they know what their rights are. Then if its a simple bankruptcy I can prepare the paperwork for them.

PPS See my previous posts about credit cards

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