Mortgages

Old Beliefs Can Cost You Money on Your Mortgage

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One of the most recognizable figures in history, Christopher Columbus, is often lauded as being a man who clung strongly to his belief that the world was round. He believed that by sailing west, he could find an easier route to the Orient. To his credit, he was able to sell the concept to Queen Isabella and King Ferdinand who financed not one trip, but three. The discovery, of course, resulted in great wealth for the Spanish Empire, making them more powerful. But here is the rest of the story.

The world is 24,000 miles around. At 34 degrees north latitude, about that of Cadiz, Spain, the distance around the globe is 18,000 miles. They knew from Marco Polo’s trips to China that the distance was 6,000 miles away going east. 6,000 is one-third of 18,000 – or 120 degrees. That meant that to get there going WESTBOUND, it would be 240 degrees or 12,000 miles. Here’s the rub. No one had ships capable of holding enough food or water for a journey that long. So even if one COULD get to the Orient going east, it would take more resources than were available. So why did they start?

Columbus ran into America after going only about 75 degrees. Why didn’t he say, “Whoa! What the heck is this????? I shouldn’t find land for another 7,000 miles.” Instead, he made two more trips and died still clinging to the belief that he had found the route to the East Indies. What this suggests is that Columbus clung to those beliefs long after he should have given them up.

Amerigo Vespucci explored the shore of the same land and figured out that it was NOT the East Indies but two new continents. His correct assessment meant that we now have North and South America instead of North and South Columbia.

This is a valuable lesson, and one that plays out in more mundane, but still very personally important scenarios.

As we grow up, we learn certain strategies and tactics that get us rewards and help avoid pain. Some of these have to do with shopping. An experienced person learns that certain tactics that apply to one may not transfer easily to another. Buying a washing machine should involve consulting Consumer Reports, whereas we don’t need their research when buying bananas. The important thing for you as a consumer is to choose the appropriate method of shopping for whatever it is you are buying.

Where home-buyers go wrong…>>>

Image: Library of Congress, via Wikimedia Commons

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