How Much is that TV in the Window?

Here’s one for you. Antwone Fisher recently wrote a book entitled A BOY SHOULD KNOW HOW TO TIE A TIE. It is a book of advice for—boys.

In his chapter on finances, Fisher grabbed my attention.  He creates the scenario of a young man, who wants to buy a $2000 television. He is given a “good deal” by a credit card company to receive a card that charges 18% a month in interest. He is told he can buy the $2000 television on his new card and pay only the minimum payment each month--$40.

This is too good to be true. The young man purchases the TV on his new card and begins paying it off-$40 each month.

That new TV will take 30 years to pay off.

The young man will ultimately pay $5000 in interest for a $2000 TV. After thirty years, he will have spent $7000.

In contrast, were that young man to commit $40 to a mutual fund or other stocks averaging a return of 8 % over a thirty-year period (a very realistic possibility), his investment will be worth $64,000. $46,000 will be interest paid to him!

Money. It works for us, or it works against us.

Desire. It works for us, or it works against us.