Yeah, what I'm about to share with you is bare bones, but it's illustrative of the problem we face in our Nation today.
Several years ago I had a house for sale. I chose to sell this house in one of the worst real-estate downturns our area had experienced in years. The house sat with an agency's sign out front for 3 months...
And got nary a nibble.
Neighbors had asked me about the place, but although I knew them to be of good character, their financial history was such that banks wouldn't consider lending them the money to buy my house.
My contract with the agent expired and they took their sign off my lawn.
By this time we had moved into our new home and were paying payments on two mortgages.
A couple more months passed. I needed to sell this house!
I approached one of the neighbors who had asked about the place to see what sort of deal we could work out. He was pleased...
His elderly Mother was moving to the area and he didn't want to bring her beneath his roof, but wanted her close enough to check on her frequently. My empty house would be perfect for him.
By this time I had reduced the price of the house to $30,000. To sell him the house "contract for deed", I was asking 8% interest... just slightly more than the bank was charging on a loan, to cover the extra risk I was taking in selling the house to someone the bank wouldn't take a chance on. As I explained my proposal to my neighbor he nodded his head and smiled. I began to feel "warm and fuzzy", 'cause it was beginning to look as if I'd get some extra income to cover the burden of having two mortgages sucking my checking account dry.
Then came the bombshell:
He said to me, "She's on a fixed income. Her budget will only allow for a house payment of $200 per month. If you'll agree to accept a payment of $200 per month, we've got a deal!"
"Uhh.... no, that won't work."
He said this with a questioning look on his face. It was as if I had slapped him. He obviously thought I would jump at the chance to sell this house under almost any circumstance.
So I got a pad and pencil and scratched out the figures...
"$30,000 is the selling price. The interest rate is 8 percent, or .08, right?"
He nodded... with me so far.
"So $30,000 X .08 equals $2400 in interest per year. $2400 divided by 12 equals $200 monthly. If your Mother pays me $200 per month she'll be paying me interest alone and will never own the house."
Now it was his turn to be shocked,
And I was surprised that he was shocked. This was BASIC stuff...
Why hadn't he figured this out on his own? Why was it not obvious to him before he came to make the deal with me?
So when you wonder why the general public is not in an uproar when the Obama administration takes steps to add yet another $30,000 in future debt load to every boy, girl, man, woman, and transgendered person in the United States...
consider that most voters are CLUELESS about what is going on here!
(And I'm feverishly trying to sort out how I can make a ton of money taking advantage of folks like my neighbor without projectile vomiting when I look at myself in the mirror.)