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Everything You Know You Think Is True

    Most of us have an opinion about almost everything, especially those things we believe we know about. Unfortunately what we believe to be true may in fact not be true at all however we live our life believing that the things we know in fact are true. Obviously if you knew something was not true you would make adjustments immediately to your thought process.

    When it comes to understanding money and how it works it is quite easy to be persuaded that the things you hear are true may not be true at all. Let me give you an example. You hear on TV that you can buy the car shown and finance it with no interest. If it sounds too good to be true… it probably is. Are they trying to tell you that they are not going to make any money on selling you this car? Certainly not. What are they saying? They are saying that they are not going to charge you interest on your monthly payments. You are going to give them the present value of the interest they would have earned up front they will not charge you interest on your monthly payments.

    Don’t forget the concept called opportunity cost. If they can receive a lump sum up front they have the opportunity to invest that amount over the time period you will be buying the car and earn the interest they require to make the transaction.

    It is easy to think something is true if you do not have all the information. Some things that seem true for others may not be true for you because of your circumstances. Give me a call if you have questions about issues in your financial life where you want to make sure that what you believe to be true, really is true.