I've been thinking about that. It's entirely possible, yes. The Whole Life Replacement issue is now pretty much complete, and as such a problem of the past. The credit scoring shirade is a current issue tho, and therefore much larger at this point in human financial history. So it would be easy to conclude that you're right. By the time you include all credit transactions, and compare the interest from what it is to what it should be, you could easily reach into the TRILLIONS of dollars over the years. But here's LB's point and also the whole point of my making this post; "YOUR FICO SCORE COULD CHEAT YOU OUT OF BECOMING A MILLIONAIRE." This statement is literally true.
That's true if you're a baby. Putting $200/month into an 8% compounded monthly account will take almost 63 years to get to your 4.5 million! 0
I consistently get 15-20%. Also, it doesn't take 4.5 million to become a millionaire. It only takes 1. But you do have a point Zero. If you're 62 before you learn about this stuff you're already screwed.
Two questions. 1*In your example How old would you be when the account reached one million? 2*Who would you rather see the money go to you or FICO?
It's not my example - it was yours. It may sound impressive turning $200/mo into $4.5 million. I'm just pointing out that many/most people on this board won't be able to realize that. I am not suggesting though that the general principles aren't applicable. I think they are very relevant and people should heed them and turn things to their best advantage. It's just that using pie in the sky and/or unfounded arguements to try to get your point across is doing yourself an injustice. 0
OK ... you both have excellent points. So lets be more realistic. $200 a Months @ 8% for 45 years (a typical working career. Age 20 to 65) Is = $1,054,907.98 @ retirement. While the $4.5 Mill may have been aggressive the point is valid. Extrapolated backwards; $1,054,907.98 Divided by 45 years, divided by 12 months a year = $1953.53 PER MONTH in tomorrows dollars. A FICO difference of 580 to 680 ultimately cost you more PER MONTH than the entire original mortgage payment. (Assumes investment in a tax deferred account)
It's not my example - it was yours. My example~~~But when you take into consideration the rule of 72 it's over 4.5 million dollars or $12500 per month. LB59 ------------------------ Your Example~~~ That's true if you're a baby. Putting $200/month into an 8% compounded monthly account will take almost 63 years to get to your 4.5 million! zerodown ------------------------------- What I was asking you in my post was using your above calculations How old would you be when the account reached one million dollars? ^^^^^^^^^^^^^^^^^^^^^^^^^ 1*I'm just pointing out that many/most people on this board won't be able to realize that. zerodown +++++++++++++++++++ 1*Let me go you one better not a one of them will ever see one red cent of it if FICO robs them out of it! Lets forget the 4.5 million & be real conservative and make it $100,000.oo. Now the question is who gets the one hundred thousand dollars? * * * * * Again I ask -- Who would you rather see the money go to you or FICO? LB 59
Re: FICO Can cost you from $5 K to $77K lbrown59 | 7170 posts since Feb 2001 205.188.197.31 | 01.20.2003 @ 06:13 *FICO >= 720 8.000 915 oz =================== At 109 months the lender has gotten all the money back that he loaned out. The next 251 months is all gravey with no risk of principal. 251months @ $915 is $229,665.oo-Not a bad haul for risking and doing nothing. quote: -------------------------------------------------------------------------------- Originally posted by oz FICO Score INT MthPay Diff ========================= FICO >= 680 8.250 932 5760 FICO >= 620 9.000 985 18360 FICO >= 600 9.375 1010 9000 FICO >= 600 10.000 1058 17260 FICO >= 580 11.000 1133 27000 Total 77380 Based on a $100,000 30 year $1000 taxes $500 insurance Looking ar a brokers rate chart I ran these numbers. It's pretty scary.. But as you can see getting from a 580 to 680 is worth 200 a month of your paymants. Then look at 15 year mortgage with that 200 you have saved So before you lock into to that rate make sure you have tried EVERYTHING . And how much is creditnet worth now.. --------------------------------------------------------------------------------
Bump for Rule Of "72" And Your Scorehttp://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=335790#post335790
The flaw in this analysis: A dollar in 2040 is not worth the same amount as dollar today. Without applying a discount rate to future cash flows, these analyses aren't really worth a whole lot....
Re: Re: Re: Re: Rule of "72" And Your Score You'll still have the same amount. Who knows what it will buy? Considering that we have almost no inflation, there won't be a lot of difference. But what will inflation be between now and 2040? I'll at least have more money this way, so I can at least maintain my lifestyle. No one said that in 2040 you'll be able to live like Rockefeller.
Re: Re: Re: Re: Rule of "72" And Your Score Thanks for the bump lbrown. BTW - Most experts predict that inflation will AVERAGE about 5-6% between now and 2040.
Re: Re: Re: Re: Re: Rule of "72" And Your Score You'll still have the same amount. Who knows what it will buy? Considering that we have almost no inflation, there won't be a lot of difference. But what will inflation be between now and 2040? I'll at least have more money this way, so I can at least maintain my lifestyle. No one said that in 2040 you'll be able to live like Rockefeller. Hedwig ================= Right even if todays dollars aren't worth as much in 2040 you are still better off having them in 2040 than not having them then. The END ************************* LB 59 PS People seem to think that if todays dollars will be worth less tomorrow saving for the future isn't worth it. If that's the case you had better have all of them you can get because you're going to need them, thus making saving for the future that much more urgent!
Re: Re: Rule of "72" And Your Score I think you should look at Japan's economy, Tokyo real estate boom and decline. It answers a lot of questions about deflation or 0% inflation in the long run.
