210. How much does owning a home really cost?

Home ownership has always been part of the American dream. Complete with a dog, two kids and a white picket fence—it is our slice of American pie.  Millions of American workers get up and work long, hard days to make their house payment—week after week, year after year.  For most of us, it is a 30 year commitment.

Even in the current housing market and after the loss of billions of dollars in home equity during the housing collapse, many people still place value in owning a home. Americans also generally regard home ownership as an investment.

However, despite our perceptions, owning a home can have its financial shortcomings.

Anyone who has purchased a home has to gasp for air when they consider how much they will pay in interest over the course of the loan. Depending, of course, on the loan terms, the interest can be as much or even exceed the value of the home itself. This is particularly common on 30 year mortgages, since interest equals principal multiplied by rate and compounded over time.  Thus the interest on a $150,000 loan at 5% for 30 years is $139,883; for 20 years, it is only $87,584.

5.30% is the interest rate in which you will pay double the price of the house for the cost of your loan. If you take a loan for 150,000 over 30 years, you will pay 150,000 in interest.

The problem with home loans is that the interest is paid up front, as much as 80 percent the first five years and 70 percent the next five. So while the interest rate in a fixed loan may remain constant, it is calculated first and subtracted from the payment amount. Whatever is left is applied to principle. Thus a higher percentage of the payment is applied early in the loan.

On a $150,000, 5%, 30 year loan—at 10 years, the homeowner would still owe $122,308 despite making total payments on the loan of almost $96,000. Thus, although the homeowners have paid one-third of the loan term, they still owe 80 percent of the home value.

In a sense, when you also consider closing costs, renovations and repair, maintenance, taxes,  private mortgage  insurance (the cost paid by the homeowner to secure the lender’s loan) and the current state of depreciation, homeowners are really only renting their home for the first ten years. There are many factors to consider, such as down payment and tax advantages, but all things considered the first ten years of the loan are difficult for the homeowner (and actually, even at 20 years, the homeowner has only paid 50 percent of the loan value).

The problem is that many people live in their home for 10 years or less—due to changing family size, relocations, etc. From 2001-2008, the average was 6 years. With little salvageable equity over the first ten years, the new loan starts all over again with the purchase of another home—with all that interest again paid up front.

Thus, if a home is sold after ten years, the bank collected $96,000 in mortgage payments and the payoff value of the home, which is about $122,000. They loaned $150,000 and in ten years recovered $218,000—the same amount an 8 percent loan on $150,000 would return in 10 years.

If the homeowners stay in the home for 30 years, less and less of each payment is dedicated to interest. The formula dedicated to the value of money over time works out. Over the last ten years, only about $20,000 is interest. So while interest rate is constant, depending on the circumstances—and subject to debate—one might be able to do better through investment.

Prior to the housing crisis, homeowners and lenders relied on appreciation to balance the interest heavy loans. If the house had appreciated to $175,000 over the first ten years, the homeowner would at least walk out of the loan with $50,000. Today, homeowners are lucky to get the $122,000 still due on the loan. Thus, the homeowner is back to where he or she started.

When housing values and home equity were rising quickly, many people were tempted to cash out their home early in the loan and purchase a larger one. For lenders, this was great, because as noted, the earlier in the loan it is paid off, the more interest the lender collected (as a percentage of the entire loan). It also affected the availability of second mortgages. Due to declining equity, banks can no longer double up on the same house.

Owning a home is still part of the American dream, but as those underwater in their mortgage can attest, it is not the investment it was in the early 2000s. Homeownership favors those who can take out shorter loans or make additional principal payments—a couple ways to reduce the interest advantages afforded to mortgage lenders.

209. Being a fan is like a part-time job

With the addition of FOX Sports 1, there are, by my unofficial count, over 40 dedicated sports channels—not counting the sporting events covered by other network and cable channels.

Each sport seems to have their own channel-- there is the NFL, NBA, and MLB networks, as well as the golf channel and tennis channel.  Even college conferences have their own channels—such as The Big 10 Network.

In addition to television, there are sports talk stations, and sports talk shows on television. These radio shows not only provide sports opinion, information and coverage—it lets listeners participate and often join the meaningless debates.

Some events are now covered in their entirety. Whereas in the past, you might only see the final few contests, now you may be able to see every game.

For example, a few weeks ago or so, ESPN 2 was showing the Little League World Series. While many years ago, only the finals were televised—when the International Champion played against the American Champion. This year not only did they televise all 32 World Series games, but also 75 regional games. Though very good baseball, even with the infliction of major league showboating, the coverage seems excessive.

And it is not just Little League baseball. Many sports, and non-sports, like fishing and poker, get extensive coverage.

For the television rights to cover sporting event, networks often pay millions, even billions. Salaries have accelerated beyond comprehension. In 1982, Mike Schmidt made the most money in Major League Baseball at 1.5 million; in 2012, Alex Rodriguez made 30 million. The 2012 average salary in Major League Baseball was 3.2 million, about 1 million more than just 10 years ago.

College sports are out of control, as the NCAA spends most of its time tracker down cheaters—who, with all that is at stake, have an incentive to cheat. Stadiums are cathedrals, tailgate parties last days, and opposing fans are often mistreated.  Playoff systems are absurd, catering to whatever makes the most money.

Tickets to the biggest sports events easily top the $1,000 mark—even much more with ticket resellers. The collective worth of NFL franchises is estimated at more than $37 billion.

All in all, sports continue to grow as an economic force in our culture. The question is: When is the sport bubble going to burst?

Year after the year, fans foot the bill for their favorite sports. They attend games, pay $10 for a beer, buy jerseys and support those companies that sponsor events. All in pursuit of a championship—the chance to say “my” team is the best.

Being a fan is like a part-time job.

Granted, there are other reasons to watch games—enjoyment of the sport, passing of time, family functions and parties with friends. They are all worthwhile social activities.

But has it gone too far? Does Alex Rodriguez deserve to be paid over $185,000 per game? Is that the social value we have placed on sports—in comparison to other occupations?  Is that the value we have placed on winning or having a good time?

Sports has become so entrenched in our culture that fans of the Cleveland Indians have been criticized by local sports talk shows for their low attendance. At times, it almost sounds like we have some sort of moral obligation to support our local teams when they are playing well—regardless of cost.

The bubble will only burst when fans stop watching, or stop supporting, their teams. If fans stop attending games, ticket prices will fall. If fans watch fewer games, rating will fall and the advertisers will pay less to run their commercials—and networks will pay less for the rights to cover the game.  Eventually, salaries and owner profits will fall—inspiring a housing-bubble type economic correction.

However, for foreseeable future of the most popular sports, the bubble will continue to grow. Sport leagues are reaching out to other countries—making them global events. The Super Bowl was broadcast in over 230 countries last year—and, with a population of over 1 billion, China is an emerging market. The estimated annual revenue of the NFL in 2025 is $27 billion.

I have always enjoyed watching sports—but I’ve narrowed my interest to those teams and events that I really care about. I have no desire to watch little leaguers from California battle it out with youngsters from Arizona. Or college lacrosse or international soccer. The Browns, Buckeyes and some tennis is enough for me.

208. What do you look like on tape?

In the 1998 Seinfeld finale, all of the bad deeds of the cast were put on display in court by a string of character witnesses. Although not one of my favorite episodes, what I recall from the episode is how bad I might look (or anyone) if our worst moments were rolled out as evidence as to what type of person we are.

It used to be, confronted with such testimony, that we could just deny it, lie about it—or claim that it was taken out of context. Make up an excuse, propose a reason. And that still happens today—athletes claim they never took steroids, only to admit later that they did, for example.

But we have entered a new era—an era of cell phones and surveillance cameras. The right of privacy does not exist in public, and at any given time there is a surveillance camera recording our activities – our comings and goings—as well as many cell phone cameras as there are people. Do anything unusual or curious—or even amazing—and you can bet that someone will be ready to make record of it.

In this relatively new era of technology, our lives are more vulnerable to the recordings of our worst moments. No more need for those character witnesses—just roll the film. People, and their lawyers, may still try to spin the situation, but, as they say, a picture is worth a 1,000 words.

The list of examples is growing each day, but probably the most famous is the 47 percent remark by presidential candidate Mitt Romney that was secretly recorded at a political fundraiser. The history of this country might have changed on that recording—as many regarded it as the classic premise “what we do when we think nobody is watching.”

Other examples include former Ohio State president Gordon Gee, whose comments about Catholic priests inspired his retirement. We also recall the Steubenville community that was devastated and appalled when party photos were shared on social media. Recently, Heisman Trophy winner Johnny Meizel was recorded allegedly receiving payment for signing autographs and Philadelphia Eagles wide receiver Riley Cooper was recorded using a derogatory racial term at a concert.

While each has its own circumstances and consequences, each was recorded without their knowledge. These individuals each had one of their worst moments, life changing moments, captured on tape—to be shared, in a blink of an eye, with the world.

And while I certainly believe that the consequences should follow the actions, we all have our moments. In fact, You Tube is filled with embarrassing moments captured on video and shared with the world—just like the Seinfeld episode.

The positive side of cameras and surveillance is that people might be inspired to behave better. Not only can crimes be caught on film, but also the driver with road rage, or the baseball dad who berates an umpire. It’s a greater risk to commit a crime or lose your cool in public—it could be on Facebook in minutes.

It can also be used to positively settle an issue—proving more reliable than witnesses, such as when Ohio State running back Carlos Hyde was relived of charges after a night club video caught the altercation that landed him in trouble.

The issue takes on several social perspectives. Aside from the legal aspect, which is a positive aspect of the video technology, there is the social aspect. Should our free expressions between friends be secretly recorded? And do these recordings represent our true personalities?

We all say things we regret or don’t really mean. And conversely, the good is not often recorded—who records someone writing a check to a charity, saving an injured bird or recycling an aluminum can? The public loves extremes—the shocking, our worst moments.

Did Mitt Romney really mean what he said about the 47 percent, or was he just trying to tell supporters what they wanted to hear. Does Gordon Gee really have a problem with Catholic priests, or was he just making a joke in the company of colleagues? Is Cooper really a racist, or simply ignorant and insensitive while intoxicated?

I don’t know the answer to any of those questions—though like most people, I have my opinions. I think actions speak louder than words—and that people deserve, except when breaking the law, to be judged on a fair sample size of their lives, not just a pressing moment caught on tape.

207. 'I wanta be' moments are rare

Bull Durham, the 1988 baseball classic, is known for its quirky look into love, life and minor league baseball. Mired in the depths of this quick and witty dialogue are a couple of social ideologies. The most obvious is the contrast between the hard-working wily old veteran and the naïve rookie who possesses lots of “God-given,” talent.

As veteran Crash Davis explains this injustice to the rookie, “You got a gift. When you were a baby, the Gods reached down and turned your right arm into a thunderbolt. You’ve got a Hall-of-Fame arm . . .”

For baseball fans, the movie is loaded with fun quotes and eccentricities about the majesty and “religion of baseball.” As a college baseball player at the time, my teammates and I had lots of fun reenacting the highlights of the movie, “You know what that makes you? Lollygaggers!”

However, as I have gotten older, it is a quote near the end of the movie by Davis that sticks with me.

Through his jagged career, of which he only spent “the 21 greatest days of his life” in the major leagues, Davis endured to set the minor league home run record.

After he sets the record, he immediately quits baseball and returns to his love interest—who throughout the movie shares her theories about life.” He says, “I got a lotta time to hear your theories and I wanta hear every damn one of 'em... but right now I'm tired and I don't wanta think about baseball and I don't wanta think about Quantum Physics... I don't wanta think about nothing . . . I just wanta be.”

It is the words, “I just wanta be,” that sticks with me. It is a moment of complete contentment—a moment of peace with one’s self. It encapsulates the accomplishments of the past and sets aside the quiet anticipation of the future. It is often the end of a journey. Any regrets have been reconciled and there is solace with how it all came to an end. It is a self-acknowledgment that the journey is over—and nothing else, for the time being, matters.

I think “I just wanta be,” moments are rare in one’s life. They need not be moments of grandeur; they can be the end of a personal journey or endeavor—or maybe even heartbreak.

For some, it may be graduating from school or college, the moment when your child gets married, or maybe, like Crash Davis, at the end of a career. It might be completing a project, winning a championship or even checking something off your bucket list. We get to decide individually.

I can identify perhaps a couple of “wanta be” moments. Winning the Lorain County Open racquetball tournament, after a year of concerted training, was one. I remember the calm satisfaction I felt after winning—and knowing it was because I worked so hard for it. I wanted to just go home and let that moment—that calm—last forever. Passing the First Year Law School Exam was probably another—even more so than graduating from law school itself.

At Baldwin-Wallace College, I missed a “wanta be” moment after I completed my senior thesis presentation to professors and students. A terrifying requirement for graduation, I had agreed to a game of racquetball a couple of hours after the presentation. It was a worthless endeavor . . . I was physically and emotionally absent. I just “wanted to be,” and should have been.

Regardless of the personal “wanta be” moments during our lives, I think the goal is to be in a “wanta be” moment at the end our lives. That is, to have that moment of peace and be able to rest satisfied with our lives—the wonderful moments celebrated, the difficult moments reconciled.  To have done the things we wanted to do, whether it is the diligence of a bucket list or the freedom of spontaneity.

While none of us will probably live the perfect life nor we will leave the world as we would like it—we can strive to be fulfilled with our efforts and contributions.