When I was finishing college I started interviewing a number of companies in many industries, including the banking industry. The banking industry offered the biggest surprise. According to them I could rise quite quickly to bank manager, a position I held in high esteem, in a matter of a few years, even though I would have only been about 25 years old. It didn't seem right, or even possible but they assured me it could be done. Then they told me how much I would make and that ended it. So here I am talking about building my bank more than several decades later. What's come over me?
It isn't a bank as you and I think of a bank, it is just a place that has most of my money. It is my house(s). In fact, anyone who owns a house has a bank because most of the money under the control of the citizens of the United States of America is in their banks. It is pretty obvious that most of us realize that the number one topic at a cocktail party is where you live and the type of house you have. We are comparing our bank against their bank. How many times have you heard or even said, “If so and so lives there, he or she has to be pretty wealthy.”?
Before I go farther I must give kudos to my late father who believed in the American dream of home ownership. When I was born only about half of the people in the United States were homeowners, and as we have grown as a nation so has home ownership, each and every year. We are now up to 69% of home ownership by the people in this country. If my dad had been a renter I might not have gained the passion I have for owning your own home.
Now that I hopefully have convinced you that your house is your bank, let me reinforce the idea. More kids have gone to college from the withdrawals from individual banks than probably from any other source, except maybe college funds that were set up at birth. You will find that most home additions, including pools and spas, as well as new furniture, landscaping and remodeling have come from the funds in the individual banks. In recent years, automobiles and family vacations have also been financed from the home bank. It is yours to manage as you see fit and most people do a pretty good job of it. Those who don't err on the side of non-use, not miss-use.
To actually have credit card balances carry forward from month to month and own a house is the greatest non-use of your bank or any bank that I believe you could ever come up with. As a matter of fact, you shouldn't possess any revolving debt that isn't cured at the end of a month, except possibly student loans, if you own a house. Our rates are in the 5% to 9% range for the most part and the interest is tax deductible.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.
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