How is such a thing possible? Well, the answer, of course, is in all sorts of hidden
charges and extra "legal fees". Here is a rule to remember in dealing with loan
companies: if you are absolutely certain, beyond the shadow of a doubt, that you can
pay the money off quickly, then your interest will be low, or reasonably low, and you will
get off fairly. But if you have to renew, and keep on renewing, then your interest can
mount into figures that would make Einstein dizzy. Doug Lurton tells me that in some
cases these additional fees had swollen the original indebtedness to two thousand per
cent, or about five hundred times as much as a bank would charge!
Rule No. 6: Protect yourself against illness, fire, and emergency expenses.
Insurance is available, for relatively small sums, on all kinds of accidents, misfortunes,
and conceivable emergencies. I am not suggesting that you cover yourself for
everything from slipping in the bathtub to catching German measles-but I do suggest
that you protect yourself against the major misfortunes that you know could cost you
money and therefore do cost you worry. It's cheap at the price.
For example, I know a woman who had to spend ten days in a hospital last year and,
when she came out, was presented a bill-for exactly eight dollars! The answer? She had
hospital insurance.
Rule No. 7: Do not have your life-insurance proceeds paid to your widow in cash.
If you are carrying life insurance to provide for your family after you're gone, do not, I
beg of you, have your insurance paid in one lump sum.
What happens to "a new widow with new money"? I'll let Mrs. Marion S. Eberly answer
that question. She is head of the Women's Division of the Institute of Life Insurance, 60
East 42nd Street, New York City. She speaks before women's clubs all over America on
the wisdom of using life-insurance proceeds to purchase a life income for the widow
instead of giving her the proceeds in cash. She tells me one widow who received twenty
thousand dollars in cash and lent it to her son to start in the auto-accessory business.
The business failed, and she is destitute now. She tells of another widow who was
persuaded by a slick real-estate salesman to put most of her life-insurance money in
vacant lots that were "sure to double in value within a year". Three years later, she sold
the lots for one-tenth of what she paid for them. She tells of another widow who had to
apply to the Child Welfare Association for the support of her children-within twelve
months after she had been left fifteenth thousand dollars in life insurance. A hundred
thousand similar tragedies could be told.
"The average lifetime of twenty-five thousand dollars left in the hands of a woman is less
than seven years." That statement was made by Sylvia S. Porter, financial editor of the
New York Post, in the Ladies' Home Journal.
Years ago, The Saturday Evening Post said in an editorial: "The ease with which the
average widow without business training, and with no banker to advise her, can be
wheedled into putting her husband's life-insurance money into wildcat stocks by the first
slick salesman who approaches her- is proverbial. Any lawyer or banker can cite a
dozen cases in which the entire savings of a thrifty man's lifetime, amassed by years of
sacrifice and self-denial, were swept away simply because a widow or an orphan trusted
one of the slick crooks who rob women for a livelihood."
If you want to protect your widow and your children, why not take a tip from J. P.
Morgan-one of the wisest financiers who ever lived. He left money in his will to sixteen