It's All About The Rate

The banker is so sly, aren’t they… they remind me of the magicians that I used to watch.

They call it slight of hand… watch this hand, while the other is doing what he doesn’t want you to see.  Was I talking about the banker or the magician?  Yes  *smirking*

The Interest Rate or Volume?

All my life I had been taught… and while I am on a rant, WHO is “they” – the ones that were doing all the teaching? … all I remember is that they said that it is the interest RATE that you need to watch.

That will determine how much interest you will pay.

So I followed what they, and everyone else, said and I focused on the rate. The lower the rate, the sweeter the deal… right?

First Mortgage: Great Rate

The first real mortgage we (my beautiful wife Eileen and I) ever qualified for, was for $125,000.

I remember arguing with the bank about not closing in time so the rate was supposed to unlock, but since the rate actually dropped lower, instead of going up, the bank said that they were "allowing" our rate to stay locked, at the higher rate!? *edited word* bankers!

We ended up with a rate of 7.983%. Is that a good rate?

Sounded okay to us… not as good as 6 but not as bad as 9.

Like Sheep...

We borrowed the $125,000 to build our new dream home… cuz that’s what everybody does, right?

We went with the conventional home mortgage term for 30 years… cuz that’s what everybody does, yes?

The interest RATE we ended up at was 7.983% cuz there’s no arguing with the bank that is “allowing” us to borrow money from them, right?

We even rolled our insurance, school tax and land tax into an escrow account to be paid with the mortgage every month because the bank said that they would take care of that for us and… they said that’s what everybody does, right?

How nice of the banker… right?

They also allowed us to purchase PMI (Personal Mortgage Insurance) so that in case our house gets repossessed and the value decreased to less than what we owed the PMI insurance would cover the gap so we wouldn’t have to worry… cuz… that’s what everybody does… right?

Rip and Neen pic

You Know Me... I'm Digging Deeper

Fast forward 10-12 years… I started really focusing on learning about finances… not the college taught BS (I actually have copies of pages of the lies they teach there) but actual real-life useable information that is based on common sense and that anyone can, uh should implement.

At this particular time, I was learning about accelerating debt payoff.  I was looking into a specific strategic debt pay off program that pays off debt in the fastest way possible, using mathematical engines driven by complex banking algorithms.

I couldn’t understand HOW this program was going to be able save us SO MUCH money!? Of course I had to know how it worked and there was a deeper dive, I’m sure just for people like me, that showed exactly how it was able to save someone so much money and is tied to this powerful Banker secret!


Eileen and I borrowed the $125,000 to build our dream home.  The mortgage was, the then standard, 30 year.  The interest RATE was 7.983%.

After learning about how the strategic debt payoff works, we dug into our own numbers and became aware of the fact that we were suppose to pay back a total of $320,395!!!

Just the interest VOLUME was $196,332!!!???

The Magician Banker

What a great trick!!!  They pulled it off… AGAIN, that Magician Banker!  Focus on the RATE they say.  That’s what will determine how much interest you will have to pay… Lies, LIEs, LIES!

One of my mentors used to always talk about all the lies from all the talking heads.  I could care less about the RATE!!!  How about the VOLUME???  We were going to pay back almost 3 times as much as we borrowed… and almost 2 times as much as we borrowed just in interest VOLUME!

How and when did it become acceptable for the banker to get away with this?

man with idea pic

Doctor Perspective

One of the lessons I learned that put something into an interesting perspective for me was about “rate” and “volume”.

When you go to the doctor for a shot, what does the doctor focus on and care about?  Is it the RATE?

Is it how FAST he pushes that little plunger thing in that pushes the medication into your body… or does he focus on and care about the VOLUME of medication that he is putting into your body?

He does not care about the rate, he cares about and focuses on the volume!

The Lesson

What I learned:

  • I don’t really care about the interest rate
  • I care about and am focused on the volume of interest
  • We are being lied to about where to “invest” our money
  • I should have never agreed to pay our insurance, school tax and land tax to the bank
  • Strategic debt reduction should be first priority before focusing on allocating any money to conventional “investment” strategies
  • The banker is NOT your friend

What's The Point

President John Adams warned that there are two ways to conquer and enslave a country: One is by sword.  The other is by debt.  We are being enslaved.

During my read this morning, Proverbs 22-7: The rich rule over the poor and the borrower is slave to the lender.  Sound familiar?

I asked about how and when the banker was able to start getting away with this seemingly abusive financial behavior towards us, but the reality lies in the question of when did we allow him to start enslaving us to him?

Most people have noticed that the financial institutions have now been forced to very clearly state volume of interest and fees that affect us.  I, and Eileen, had no awareness of any of this information, or of financial misguidance, until after I went on a search to dig through all the Money Myths (Unreliable Information) to find it.

My hope is that even just one tidbit of this information helps uncover some of the lies that we have been forced to accept as truth.

For Your Best,


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