Monday, September 15, 2008

The Cost of The Thing

"The cost of a thing is the amount of what I call life which is required to be exchanged for it, immediately or in the long run."
~ Henry David Thoreau

As I caught that quote I had been searching for more information on “Line of Credit”. In doing so I stumbled on to these few pages offered on the Net. The full link to it is included below.

Henry David Thoreau (born David Henry Thoreau; July 12, 1817 – May 6, 1862 was an unusual man for his time – maybe even for ours as well.

In reading the quote above, in the full context of where it appears, it is fascinating. Thoreau states just after the quote,
“An average house in this neighborhood costs perhaps eight hundred dollars, and to lay up this sum will take from ten to fifteen years of a laborer’s life, even if he doesn’t have a family; - estimating the pecuniary value of every man’s labor at one dollar a day, for some receive more, others receive less; - so that he must have spent half his life commonly before his wigwam will be earned.”

Remember this is probably written between 1845 – 1849.

Imagine 10 to 15 years to pay for a house. Imagine that amount of time was likely half a working life time – about the same as today’s “30 and Out” program some companies have. Then think of a house for $800 – total payment to by it.

In 2008 to find a mortgage that would be $800 a MONTH is a dream.

Further to help with perspective – Thoreau stated in the same article that, “An annual rent of from twenty five to one hundred dollars…”. Renting a house was from $25 to $100 a year – a nightmare then. Compare today’s prices and see if it is any less of a nightmare. It is NOT!

Our Northview Church has run into the Line of Credit – our Overdraft – often over these last few years. With the monthly income shrinking we had to go into this area regularly. And in the last year we were there all the time. In our church’s case that Line of Credit is $50,000. Another church I know has about $200,000 line of credit.

When we could no longer clear this amount off at the church we had to reduce the expenses – that was salaries and that meant layoffs. If you have followed this Blog – that was my loss of a job.

How can it get that way? Well income drops, expenses go up and it happens. It also happens when many of the congregants have also been carrying their own line of credit – with many families operating in that Line of Credit… and not having an increase in their income – but rather an increase in their spending. Then they learn to accept it and simply live with it. That’s the way it is.

The church became an extension of the average of each family. Older families didn’t(don’t) use the Line of Credit – younger ones did. But for the most part it had become acceptable – because there was not other way.

In the USA in recent times there has been a crisis with the Housing Mortgage field. The “Fannie Mae and Freddie Mac” shock has taken its toll. These are two large Mortgage companies that were in huge trouble.

I couldn’t understand why really – until someone explained for example that people had houses that were worth a possible $400,000 to begin with. They would have the mortgage together with their Line of Credit owing on the house. Then the value of the house dropped with the drop in prices everywhere across their area. When their house value dropped to less than what they owed – they were dead! Many of these $400,000 houses were worth less than $150,000 to even $75,000 (or nothing if you cannot find any buyers) with $300,000 left on a mortgage and the people had a full line of credit at maybe another $75,000 – they owed $375,000 on a house that they couldn’t sell.

It didn’t happen once – it happened thousands upon thousands of times.
Again the quote…
"The cost of a thing is the amount of what I call life which is required to be exchanged for it, immediately or in the long run."
~ Henry David Thoreau

Paul the Apostle says….
“Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.” (Romans 13:8)

I hate Debt! I have watched DEBT Kill people and churches. I say it again – I HATE DEBT!!

10 years ago I stepped into the leadership of Northview church as their pastor – the debt has gone down from $1,350,000 to $775,000 in the 10 years. But that next $775,000 is a new goal to get it gone – along with the “Line of Credit need”.

Today I wonder if the dear old folk that planned for the Northview Church to be built on the hill where it is at now…would have gone as far as they did into debt knowing what might happen down the road? I wonder if any have thought about it since?

I certainly do… and I HATE DEBT! – and I had “no say” over the Debt that was originally incurred – but did it ever change my life – wow!

Christmas is just around the corner – and I will again refuse to buy anything on credit. I will not take a trip I cannot pay for. I will not take a telephone offer that looks good but will cost me in the end… because… and here it is again – I HATE DEBT!

~ Murray Lincoln ~

Walden and Civil Disobedience – Page 28

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