Thursday, June 21, 2012

The True Cost...Can We REALLY Afford It?

The True Cost of That House

What is the True Cost of _______ and can we really afford it? I know people that know people and we like to talk about each other. Join in for fun and enlightenment.

Example #1: A couple decide to marry and combine resources. The find a really nice deal on a beautiful upscale house in an upscale neighborhood and charge it for 30 years. Both are normally logical, rational people but the intoxication of their new marriage and Dream Home overcame everything. The discounted Dream Home originally cost about three times that of their current individual homes.

Within the first year, they were swamped by the cost of:
  • new grass for that BIG beautiful lawn,
  • repair of the sprinkling system,
  • upgrading the faucets,
  • well, let's just forget remodeling or repairing the roof.
He told me they figured with both their salaries and their large down payment, all would work out but it didn't. Two years later, the housing industry recovered, including the value of their home, with the property taxes. The last we spoke, they were selling the house.

Take a note. When anyone tells you they have this REALLY GOOD DEAL for you, my experience, over forty years is to quickly run away or die; because either way you are going to hurt. I began to question if it was such a good deal, why didn't they get the product. You are exactly correct, the only good deal was the commission or PR they got. Now, back to class.

Example #2: A guy finds a really good deal on a used luxury automobile and uses every penny he has to buy it(first warning). Registration was way more than he figured and scrapes the barrel of several friends and family to pay it(second warning). Life is wonderful as he and family enjoy the prestige of their new car for several months and then...a part breaks. The reason the very well off have these type of new vehicles is a statement to friends and colleagues they can afford the eternally huge monthly payments, regular maintenance and taxes.

Typically, the only used cars the wealthy have and keep are those so old and so costly, none else can afford them.

Example #3: Think of any company greater than the community store and I guaranty they suffer hidden losses. The larger the company, the greater training and transition costs are required but if not paid for,  their losses are hidden in the bureaucracy paperwork. Often, these losses are in the tens of millions to hundreds of millions of dollars per year, every year.

Example #4:
Misconceptions About Teaching and Education
Schools of Thought - Educate or Not

Guys, if you don't present your wife or girl with a gift for that special time, you will suffer loss and if you are just ignorant, you will not why it happened.

Boss, think about those employee benefits. They are saving you "untold, and often unnoticed profit" but drop them and your savings will be replaced by unseen but noted profit losses.

Humans, when we cheat God, the losses we suffer are too great too measure.

Enough said. Enjoy your life.

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