Ken, Ken, Ken.... Please do the world a favour, and take a finance or accounting course on the present and future values of cash flows as well as leveraging at one of your local community colleges.

Hi JoeTaxpayer,

Regardless whether you and I agree or disagree, I sincerely respect the amount of time and effort you are putting into this topic, and I am serious in saying this!!! I appreciate your desire to ascertain truth.

Having said this, you obviously are missing the tremendous benefits of using leverage to pay off mortgage debt.

Let's do a simple cost / benefit analysis...

Cost?...You are suggesting the monthly cost is $33.00, but in the case of borrowing 10,000.00 at 10% APR to make a prepayment to a 30-year 6% APR, $200,000.00 mortgage, I use a monthly interest cost of $50.00. If a client has a discretionary income of $1,000.00, the $10,000.00 line of credit can be paid off in ten months. $50.00 X 10 = $500.00, so $500.00 is the COST of this little maneuver.

Benefit?...Making a one-time prepayment to a $10,000.00 mortgage in Canada results in an immediate cancellation of $42,601.50 in interest cost that I will never have to pay!!! In addition, I have immediately shortened the amortization of my mortgage by 35.8 months!

There's more...If, after my debt is paid, I choose to continue paying $1,189.65 per month, but into an investment account, even if my rate of return is only 1% I will have a very nice nest egg built up in the time that I would have otherwise just paid off my mortgage without utilizing this particular leverage technique!

In other words, I receive a benefit of over $42,000.00 and almost 3 years off my mortgage for a cost of $50.00??? Yes, this is true...leveraging to pay off debt is an extremely powerful, beneficial, and safe financial strategy!!!

JoeTaxpayer, please, please, PLEASE tell me that you have just encountered an "Ah-Ha" moment and that you finally get it. Please understand that for years, the financial community has advised consumers to leverage in order to invest. Please agree that leveraging in order to pay off financial commitments that you have already made makes much more sense than leveraging to invest, because rate of return is guaranteed, the only volatility is the clients own job security, and, unlike many investments, the consumer has all the control.

As far as the $3,500.00 one-time or $495.00 / $49.95 cost options of the MMA web-based software, monitoring, and mentoring service, please keep the following in mind...

After I teach people the power of using prepayments to principal, isolation of principal amounts, leverage, and liquidity, I give them the option to purchase the MMA system as well as the option to attempt to do this on their own. Yesterday, for example, I met with a young family who actually had been able to discipline themselves to make a few principal payments to their debt over the past few years. After my free lesson on using leverage to cancel mortgage interest, his eyes got real big! He did not, however, purchase the MMA system, because he intends to do this on his own. I wished him well, told him to have a nice day, and moved on to my next prospective customer.

Ken -
I find that agents are unable to stay on topic, and you appear to be no different. You don't want to talk about the failure of the product, but rather take a side trip to ad hominem attacks, questioning our motives.
Your motive is clear, you wish to extract $3500 from your victims and expect their gratitude for having done so.

I, and most naysayers, are not in competing businesses. In fact when chansen posts, he doesn't link from his name. I do as I am a blogger in my spare time. I put on my cape and mask and try to save the world, one innumerate potential victim at a time.

To answer your further drivel, When one borrows $10K at 10% to pay off money at 6%, in the first month, the loss is $400/12 just over $33. Of course you'll claim that the interest on the $10K is canceled to some extent by directing one's checks to that debt, and to a degree you may be right, but just as that $10K is too high a HELOC draw, so does UFirst MMA scam draw too much, negating its own clever premise.

Do I seem angry, Ken? Or perhaps just frustrated as you continue to go round in circles. I posed another question at the other site, I'll ask here as well;

Ok, question - I have a 2% fixed mortgage, an odd 30 year balloon that calculates simple interest once per year, and requires me to pay the interest, plus $1.
So, on my $100K starting figure, the first payment due in December is $2001. You can see that $2000 is interest, $1 principal.
Please enlighten me, what is the rate you think the bank should be disclosing this as? I'm following your example above, I just wish to be I get it right, so I need your help with the math.

This is in reaction to your innumerate claim that our 5-6% mortgages actually should be disclosed as really being 100+%. That outrageous claim should be enough to discredit you.

I think I am starting to realize why people like chansen, JoeTaxpayer, and calvinandhobbes seem so angry when they discuss the Money Merge Account system. Clearly whatever interests they have in the investment, mortgage, real estate, and/or other businesses are being threatened here.

Well that is just too bad. Regardless of your hidden agenda, United First Financial and the Money Merge Account System are here to stay. Why? Because UFirst is exposing truth! What truth, you ask? Well, answer this...

1) If I make a one-time $10,000.00 prepayment to a $200,000.00, 30 year mortgage with a 6% APR, is it true or is it untrue that this prepayment immediately cancels $42,601.50 in interest that I will never have to pay?
2) Therefore, have I, or have I not shortened my mortgage amortization by 3.7 years?
3) If I choose to use leverage and borrow the $10,000.00 from my 10% APR line of credit in order to realize the above interest and time benefits, in your opinion will I pay more or less than $42,601.50 in line of credit interest when I pay my line of credit off?

4) So would you or would you not agree that anything less than $42,601.50 in line of credit interest charges be a bargain when compared with my mortgage interest cost?

If the light bulb in your stubborn heads has just now turned on, please do not feel bad...it has taken many people a very long time to get a real good understanding of what the Money Merge Account system is actually doing. The secret? It is all about leverage!

How is it fascinating? It's just Ken ignoring the laundry list of arguments against UFirst, and being willfully ignorant of basic financial concepts like the time value of money, while promoting software that badly manages debt over time.

Arguing against such a position is tedious. This thread stopped being fascinating the moment it was created.

This is fascinating!!!

This is fascinating!!!

P = C (1+r/n)^(n*t)

P = future value
C = beginning value
r = annual rate as a fraction
n = number of times it's compounded per year
t = number of years.

P = 10 (1+100%)^(365*1)

P = 10* 2^365

Your simple interest 36500% compounds daily to an absurd number.

Similar to why a 6% simple mortgage payment of $1 on day one saves not $1.80 in future interest, but over $5.

72% in cumulative interest morphs to a 100% return via rule of 72. Since there are 500 72's in your number above, a similar thing happens.
The point doesn't change, we agree that 100% is very different when taken over a day, a year, three decades.

Joe, I'm pretty sure the APR is 36500%

P = C (1+r/n)^(n*t)

P = future value
C = beginning value
r = annual rate as a fraction
n = number of times it's compounded per year
t = number of years.

for us, P = $20, C = $10, n = 365, t = 1/365
r=?

20 = 10 * (1 + r / 365) ^ (365 * 1/365)

2 = 1 + r / 365

r = 365, or 36500%

"Is 6% a pretty good interest rate, historically?"

In the last 30 years, a decent mortgage rate, but well below long term investment returns.

"NOT 100%, which is what your scamming self would say. You would be charging roughly 36500% APR."

Forgive me, but with compounding, a 100% daily return creates the result 2^365. Since 2^10 ~ 1000, more or less, We are talking 1000^36 or 1 with 100 zeros. Pretty meaningless, just like much of the interest discussion I've been participating in here.