Wednesday, February 10, 2010

American Divided Family

A letter to Mish Shedlock, through his blog:
My Dad, now 88 years old, sold out of everything, bonds, mutual funds and even his house a few years ago, right before the crash and has kept it all in laddered CDs. Thank-you for helping to inform our decision there, it helped preserve $150k or more.

Interest payments covered most of his expenses while he was getting 4-5%, but that isn’t happening now and, at 88, he certainly is in no position to go chasing yield elsewhere.

We have hit on what we think is a good alternative. I have seven years left on my mortgage at 6%. Better he should get it than Midland Mortgage Co. so Dad will soon be my new mortgage holder. He gets a monthly check, I get a little break on the rate (5%) and we keep the money in the family.
Can you imagine something like this happening in India? Let me count the number of reasons why not:
  1. An 88 year old person managing his finances independently

  2. Said 88 year old person also living independently

  3. The person loaning money at interest to his own son
Can you say ADF?