Medici family, usury and Rocky Balboa

B U S I N E SS
Sunday, August 16, 2015 | Daily News | Page B7
Medici family, usury and Rocky Balboa
by loan sharks (and with no notaries
present), involves collecting vigorish.
As Rocky Balboa tells one of his
debtors during a collection: “You
wanna’ dance, you gotta’ pay the
band. You wanna’ borrow, you gotta’
pay the man.”
Some 600 hundred years ago, the
Right now, according to
Medici family built a banking
one recent study, you pay
empire that eventually helped
less to borrow money than at
fund the Renaissance. Their
any time in recorded human
business was simple: they
history. Of course, it’s wise
collected interest on loans, a
not to miss payments, either
practice that was then known
to a mortgage company or to
as usury. Today, we call it
Rocky’s boss.
lending.
Historically low interest
According to The
rates
are fantastic for
Economist, the Medicis first
Margaret R.
families that want to
charged interest on loans by
McDowell purchase their first home
utilizing different currencies:
“…the bank could lend, or
Arbor Outlook and who can lock in low
mortgage rates. Existing
accept a bill of exchange, in
loans can be refinanced as
one currency and collect its
well. Some corporations borrow
debt in another, building a hidden
cheap money and buy back their
rate of interest into the exchange
stock, thus using low interest rates to
rate.”
increase shareholder value.
The practice of loaning money
Of course, low interest rates are
in exchange for charging a rate of
the enemy of retirees and savers.
interest can be a very profitable
Just take a look at current CD rates.
business. When you buy a $400,000
Another part of this equation is
home with a 30 year mortgage at
how historically low interest rates
5 percent, the actual amount you
and low inflation impacts buyers who
pay back will total well over $750,000.
are purchasing a stream of income,
Short term street lending conducted
like a fixed annuity. As interest rates
and inflation rise, the predetermined
monthly payout from a fixed annuity
becomes less and less valuable over
time. If things cost more every year,
being stuck with the same cash flow
every month is obviously undesirable.
Therefore buying annuities that
lock in payments based on today’s
extremely low interest rates and
inflation is likely to disappoint as
rates and inflation rise. Ask anyone
receiving a company pension with no
cost of living adjustment if it buys as
much today as it did 10 years ago.
Avoiding overpaying for
dependable streams of income has
never been more important or more
difficult.
Generating systematic income
streams without overpaying
frequently requires a unique, well
researched combination of stocks,
bonds, REITS, MLP’s and more.
Caveat emptor for locking in fixed
payments in today’s world.
Margaret R. McDowell, ChFC, AIF, a
syndicated economic columnist, is the
founder of Arbor Wealth Management,
LLC, (850-608-6121~www.arborwealth.
net), a Fee-Only Registered Investment
Advisory Firm located near Sandestin.
driving a (hazardous materials) truck for his dad’s oil
delivery company,” Cathy Ward said, adding a wooden
block had to be strapped to the accelerator so the boy’s
foot could reach it.
Ward’s son, Burt, was his father’s passenger when
he touched down at Crestview’s new airport in 1964. He
said his father started flying in his mid-teens, at which
time he bought his first airplane. However, Hervis Ward
made a tremendous sacrifice just a few years later: He
sold the plane to buy furniture to set up housekeeping
with his bride, Lucy.
“His family knew he was serious about her
when he sold that plane,” Cathy Ward said.
World War II hero
Hervis Ward served in World War II as a seaman in the
United States Merchant Marine, an unusual choice for a
young man keen on flying.
“He was drafted and he wanted to get into the Air
Force, but they were full,” Lucy Ward said. “He talked
to the Navy, but they were full, too. He didn’t want to go
into the Army, so the Merchant Marine was all that was
left.”
After the war, he took over his father, Henson Ward’s,
American Oil Company franchise, ultimately owning a
chain of more than 20 Amoco stations with Nugget convenience stores, which he sold in the 1990s.
Hervis Ward garnered more than 14,000 flying hours,
often flying friends and family members on hunting and
fishing trips around the country, Burt Ward said.
But he’ll never forget the excitement as a young boy
as his father touched down in 1964 on a dirt taxiway that
today is the region’s longest runway.
Apple showing interest in automotive testing facility
SAN FRANCISCO (AP) — Adding
fuel to rumors that Apple is working
on designs for a car, local officials say
engineers for the giant tech company
recently made inquiries about a former
navy base that’s been converted into a
testing ground for self-driving cars and
other cutting-edge vehicles.
Apple, which is best known for
making iPhones and Mac computers, hasn’t said what kind of testing
it hoped to conduct at the GoMentum Station automotive testing
facility, which used to be a naval station in the San Francisco Bay Area
city of Concord, Calif.
“We don’t know. They haven’t said
what they want to test. It could be an
iPhone,” joked Jack Hall, program
manager for connected vehicles and
autonomous vehicles at GoMentum
Station, which is operated by the Contra Costa Transportation Authority.
The agency is promoting a portion
of the former Concord Naval Weapons
Station as an ideal testing facility for
carmakers and tech companies working on automotive technology.
The 5,000-acre site has 20 miles of
paved roads, including overpasses,
tunnels and railroad crossings.
Another 7,600 acres of the former
navy base is now used as a shipping
terminal by the U.S. Army.
GoMentum Station already has an
agreement with Honda, which plans
to test automated vehicle systems
there.
Hall said his agency hopes to partner with other companies for testing self-driving cars and “connected
vehicles” — cars that use the Internet and local networks to exchange
a variety of information with other
devices and vehicles.
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