truths lies

2 Truths, 1 Lie – Finance Style

Have you ever played the icebreaker game, “2 Truths, 1 Lie?”

As far as icebreakers go, this is a good one and eye opening! In fact, there is a current game show with the premise.

This is how it works:

Everyone goes around the room and says three statements. Two are true, and one is false. Today, let’s play with a couple of different hot topics in finance and see if you can spot the lie.


MortgagesHouse in Hand

  1. If you have no FICO score, you can still get a mortgage.
  2. Private Mortgage Insurance (PMI) does not protect me (the buyer).
  3. As a rule of thumb, you should be 80 or older in order to get a reverse mortgage.

Credit Cardscredit card

  1. Buying with credit makes us feel the same as buying with cash.
  2. Credit cards were invented in 1950.
  3. Credit cards are considered unsecured debt.

Estate Planningfamily silhouette

  1. Over 50% of Americans have no estate plan, no will, and no medical directives.
  2. Dying without a will is known as “an intestinal death”.
  3. Not everyone needs to hide their money from the “death tax”.

Now that you’ve tested your knowledge, read below to find out which statements were lies and which ones were the truth.

Mortgages

  1. If you have no FICO score, you can still get a mortgage.
    True; it is a lot easier with a credit history, but manual underwriting is an option.
  2. Private Mortgage Insurance (PMI) does not protect me (the buyer).
    True; PMI protects the lender from you (the buyer) not ponying up.
  3. As a rule of thumb, you should be 80 or older in order to get a reverse mortgage.
    False; it’s age 62…still old, though.

Credit Cards

  1. Buying with credit makes us feel the same as buying with cash.
    False; with credit cards, we focus on benefits and cash makes us focus on cost.
  2. Credit cards were invented in 1950.
    True; the first credit card (as it is known today) was created in 1950 with the Diner Club card.
  3. Credit cards are considered unsecured debt.
    True; unsecured debt means that they can’t come get your stuff (unlike a mortgage or car loan, which are secured).

Estate Planning

  1. Over 50% of Americans have no estate plan, no will, and no medical directives.
    True; what is your estate plan?
  2. Dying without a will is known as “an intestinal death”
    False; an estate would be “intestate” and has nothing to do with death-by-Taco-Bell.
  3. Not everyone needs to hide their money from the “death tax”.
    True; only estates worth more than $5.25M (for 2013) need to be thinking about estate taxes. But be sure you look up estate tax rules in your state as those could have a lower threshold.

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