To the Editor

Fiction Bravo

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,

letters

from readers are inevitable.

Last week’s "advertising feature" by Freddie Moorer of

Prudential

Fox & Roach Realtors (August 15) was titled "Maybe Paying Cash

Isn’t Best" and discussed the pros and cons of taking out a

mortgage

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

balance

sheet perspective. Did I miss something?"

To that Moorer quickly replied, also via E-mail:

"Yes! You are missing the word `maybe.’ Your alternative is great

but the key word is `bank’ that principal and interest. Not 100

percent

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

$620K.

"That’s why 1 percent of all the people in the world have most

of the wealth in the world!"

As always, the editors try to differentiate paid advertising

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

example.)

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.

Top Of Page
To the Editor

It is unfortunate that U.S. 1 August 15 article on

computer

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

(www.nerc.com/~srnet1/).

Sol Libes

Top Of Page
Fiction Bravo

As one of the authors published in this year’s

"Summer

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

writers

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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