Corrections or additions?
This article was prepared for the August 22, 2001 edition of U.S.
1 Newspaper. All rights reserved.
Between the Lines
Letters to the editor of any newspaper rarely concern
the advertising content of the paper. But when some advertisers choose
to use an editorial-style format for their advertising message,
from readers are inevitable.
Last week’s "advertising feature" by Freddie Moorer of
Fox & Roach Realtors (August 15) was titled "Maybe Paying Cash
Isn’t Best" and discussed the pros and cons of taking out a
as opposed to paying cash for a home. Moorer used the example of a
$200,000 house purchased with a 10 percent down payment. If the house
rises in value by just 3 percent in the first year you would have
made $6,000 or 30 percent on your $20,000 down payment. You would
be able to deduct mortgage interest from your taxes and you would
have $180,000 left over to invest however you please.
That analysis drew a quick E-mail from one U.S. 1 reader:
"Freddie, are you serious? I can’t make sense of your proposal.
I bought a home in 1996 for 300K. It’s worth 500K now. If I would
have taken out a mortgage with 10 percent down, I would have paid
roughly $120K in interest over the first 5 years, and I would still
owe roughly 257K. The tax "savings" doesn’t offset the cash flow
out, it merely reduces out-of-pocket by 40K (assuming 30 percent tax
bracket) to a net of minus 80K.
"On the other side of the ledger, I would have invested the 270K
at let’s say 5 percent after tax (I’m being generous). That’s a gain
of roughly 65K. So the net cash flow is minus 15K. My balance sheet
would show 335K Cash, 500K home, -257K mortgage. Net worth $578K —
not too bad.
"Alternatively, I paid cash and banked the `would be’ principal
and interest payments ($120K). My cash flow for the period is plus
120K plus interest (assume that a very conservative inflation and
taxes eat all the interest). My balance sheet has no liabilities,
120K cash, 500K house, net worth 620K.
"My approach seems to be better from both a cash flow and a
sheet perspective. Did I miss something?"
"Yes! You are missing the word `maybe.’ Your alternative is great
but the key word is `bank’ that principal and interest. Not 100
of the people 100 percent of the time will have the discipline to
`bank’ that $120K ($2,000 per month) to achieve the net worth of
"That’s why 1 percent of all the people in the world have most
of the wealth in the world!"
content from U.S. 1’s own editorial content. Advertising features
generally are labeled as such, or the writer is identified as "the
sponsor of this column." In addition advertising features are
set in a different typeface with different headline and caption fonts.
(Freddie Moorer’s most recent column on page 64 of this issue is an
But no matter whether the content is advertising or editorial, readers
are entitled to their opinions. We welcome your opinions. Below are
two informative letters from readers.
It is unfortunate that U.S. 1 August 15 article on
training did not list the Ewing SeniorNet Computer Literacy Center,
where I am a volunteer instructor. We offer close to 20 different
hands-on courses for people 55 or older at a cost of only $10 per
course. If you want more information go to our website
As one of the authors published in this year’s
Fiction Issue," I would like to thank you for the lovely reception
for authors and readers which you held at Micawber Books on August
14. I have attended several other receptions for your authors, but
this one was by far the warmest and the most enjoyable.
I think there are two reasons. First, more and more readers and
have come to look forward to U.S. 1’s "Summer Fiction Issue,"
as well as to the reception itself: they see the issue and reception
as a very pleasant part of each summer in Princeton. Accordingly,
attendance at the receptions has grown.
Second, the reception was run a bit differently this year, in ways
which added significantly to its value and purpose. Each writer has
finally been given a tag with his or her name plus the name of the
piece published. It was therefore much easier for those in attendance
to address writers unknown to them, and speak a bit more knowledgeably
about their writings.
And this year, during the formal presentation, each poet read the
poem that U.S. 1 had published, while prose writers’ had selections
from their works read by Preview editor Nicole Plett. The effect was
to provide the audience, both writers and non-writers alike, with
some insight into the works published and their authors.
It was a rewarding, instructive event, and I say "Bravo" to
all those responsible for it!
Marvin Harold Cheiten
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