comments
United First Financial Money Merge Accounts: Scam or Legit?
Email
 Print
|
A reader recently sent an email asking about a program United First Financial runs called a Money Merge Account and whether it was legitimate. United First Financial promises that the program, which costs $3500, would have you pay off the mortgage in one-third to one-half the time it normally would take. Knowing nothing about money merge accounts and knowing a little bit more about simple math, I smelled a fat $3500 scam brewing. The only scenario in which I could see $3500 cutting your mortgage in half is if you had a $7000 mortgage. But, setting my mental scam alerts aside, I did some more research about the plan.
Apparently it’s a fancy name for an accelerated mortgage repayment scheme. The first step in the money merge account is to take out a second mortgage on your home, a home equity line of credit. Then, what you do pay your entire paycheck towards the first mortgage and withdraw money from the HELOC to cover your expenses. You save a little money because the interest on a HELOC is calculated based on average daily balance rather than the final monthly balance. This lets you pay off more of the mortgage at the beginning of the month and then be charged less interest on the HELOC. (this assumes the same interest rate, which is a big flaw)
However, the plan also has a lot of other assumptions and flaws.
- It assumes that your HELOC interest rate will be the same as your first mortgage interest rate – very unlikely. The bigger the HELOC rate, the less you save on that difference.
- It assumes a single monthly paycheck so it’s a plan that loses some of its power if you are paid irregularly or every two weeks.
- One big flaw is that there is never discussion of HELOC fees. I’ve never opened a HELOC but I imagine it’s not free.
- This plan requires that you don’t save at all for anything else. Since your entire paycheck goes towards the mortgage and you withdraw expenses, it penalizes you drawing on the HELOC for non-essentials. Why pay $100 towards a 6-7% mortgage and then borrow $100 from a 10% HELOC?
- Finally, as if all those weren’t enough, you have to pay $3,500 for a program to help you do this!?
In researching this article I researched a lot of sites and they were nearly unanimous in their opinion that these types of programs are not worth the money (not surprisingly). They’re not scams in the sense that you pay your $3500 and they disappear into the night but it’s something you can do yourself.
This begs the question, should you use it to force discipline? I could justify paying $100 to enforce discipline because it can save you quite a bit in the long run, if you can overcome the failings, but $3500 is ridiculous. If you have $3500 and you want to pay off your mortgage sooner, send a $3500 check to your mortgage company. (if you want a legitimate and easy way to pay off a mortgage faster, consider making mortgage payments every two weeks)
{ 804 comments, please add your thoughts now! }
Related Posts
 By Jim |
 Stumble It! Bookmark reddit.comTags: HELOC, Mortgages, Scams Jun 10, 2008 | Read more in The Home |
Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.
YOu have the actual software? I thought you would never buy something like this? Tell me the exact numberes and factors you are using in your scenario like income, expenses are $4,800 I guess you put in. You must not be putting in the correct numbers for the scenario I am talking about. Just let me know so I can check this with my system because it is definately not a 20 yrs payoff time. THanks Joe
I have access to the demo site for agents, am looking at income folder, showing John and Rebecca, earning $1300/1200 semi monthly. Tot $5000/mo.
Expenses are $60.90 for cell, $1000 variable exp, $2500 living exp. Tot $3560.90
Then is “Account expenses” which show tot $1239.10 which I trust is the $1199.10 for the mortgage, and I left the $40/mo it showed to pay off the $3500 MMA.
So it just occurs to me, that in my scenario, I allowed $240 to be used as that’s all that’s available, which accounts for year MMA beat my assumption. I’ll go back in later and advise.
Yes, TRTiL, we know when agents are lying. Even if Joe didn’t have access to the MMA software, most agents are begging to run MMA reports. Given the same information, they never seem to come up with the same answer out of the MMA. The most common error is when agents input monthly income as bi-weekly, resulting in 2 extra (phantom) paychecks per year that the MMA funnels directly to the debts, but there are other errors.
Also, when agents compare the MMA to a simple prepayment strategy using an online calculator like the one at bankrate dot com, I’ve seen them screw that up as well. Google “Conversation with a UFirst Agent” to read along with that case.
Ok, got back in. I took off the automatic $40 used to pay the HELOC, and raised cell phone to $100.90 so now expenses folder totaled $3600.90 and Account Expenses show just the mortgage $1199.10.
Now, the payoff is 21.33, vs my 20.91, 5 months different. Those 5 months of $1199 payments show that MMA by UFFs own software shows a $6000 cost to the system, $3500 plus accrued interest. One way or another you are letting the system believe there’s $310/mo. Not a small sum.
Hey Joe,
It’s unfortunate that MMA agents have absolutely no way of verifying their numbers. They look at you with big puppy eyes and tell you they entered everything correctly and these are the results, no matter how mathematically ridiculous they are.
I’m willing to give TIL some benefit of the doubt, but I don’t want to hear about MMA printouts and how much interest was saved. I want to see how the actual bank numbers look.
HI Joe,
OK, thanks for giving me the figures you are using and I will check this out and see what you did and get back to you when I can today to see my results. In regards to your last post Craig, you must have really been taken advantage of by a not very good agent who pressured you and lied to you and I am sorry you went through that, but all people don’t lie and they dont’ put the bi-weekly extra paychecks in either when the client does not want to use those so I think you should stop generalizing as a whole about agents and realize that was true with that agent or other agents I guess who have done your analysis. I think you guys are really missing the real point here and that is this system is NOT just a mortgage paydown and debt paydown system. It is so much more with financial forecasting, budget planning and total overall money management so that every dollar that comes into ones life is used to its utmost potential of canceling interest and earning interest for you. There is a wealth building piece to this coming out in the next version of development that will help you reach your target amount for retirement and your financial goals to build wealth at same time of getting out of debt. There is nothing like this in the world. Go get the May/June edition of Personal Real Estate Investor Magazine and they say we have no competition and the companies that claim they can do what this does……..are no match. Personal Real Estate Investor Mag does not do story after story and give the Editor’s choice award to just any company off the street. They did their due dilligence for years now and people like Donald Trump and other industry experts get this magazine as a subcription every month and these magazines can’t put in false information or companies that are scams in their magazine and do cover stories on them and promote them and be an advocate for them if they are not the “Real Deal” and do what they say they can do. YOu all should look at all the credibility out there in the marketplace and all the awards and all the critics and experts that support this product and say there is nothing like it in the world. Why would all these people who have nothing to gain like Mark Victor Hansen, Author of Chicken Soup for the soul and world renound auther say they are on the program and saving $500k or paying their homes off in 10.4 yrs if it were not true? They wouldn’t risk their reputation and they would not advocate something that they did not see working for themselves in their own lives. Experts are not dumb and they are not people like you just talking about what they think they know and talking about it all on the internet. I just consider all your comments like reading something on the bathroom wall and I never make my decisions from those people’s opinions. I listen to the experts and I do my own research and trust me, I have done that and my clients have done that.
Great, another wall-of-text response.
In my case, a lying agent almost took advantage of my friend and his wife who were in no position to accelerate their mortgage, and could ill-afford a $3500 hit. He asked for my impressions, and instead of a sale, UFirst earned an enemy for life. I haven’t historically gone around debunking scams for a hobby. I’m a skier and mountain biker and, when I get around to it, a father when I’m not at work. I don’t even have a mortgage. I paid that off by setting up automatic accelerated payments with my bank. It was insanely easy, and I finished months ahead of where I would have been with the MMA.
And if you’re so proud of this system, what’s your agent number? I guarantee this is my real name. I’m not one for nicknames, though I can see why people use them. I’ve used “BartBandy” – a favourite fictional character from novels, in some forums. In fact, I’d be very interested to see you post this 14.7 year MMA report Joe is dissecting, with your name attached. That way, your incorrect or simply inefficient MMA report will be forever tied to your name and agent number.
Great greg the US Government just spent 1 trillion + of mine and your money and im in no position to have my taxes increased guess us govt is a scam in your eyes as well. Instead of attacking why don’t you post your bank statements to prove your being truthful.Id be interested in seeing that. also if you have no exprtise in banking or financial matters how can i ensure your statements are based on sound financial principes?, and most people arent as fortunate as you to be mortgage free most americans have been so taken advantage of by the banking industry that they have nothing to show for their years of faithful payment to banks, how can turning the table on bank be a scam. What about the homeowner who pays double the value of their home in the form of mortgage paymenets,doesnt that prove that a mortgage or the bank is a scam,I have owned many homes in my life and never has a banker said to me, Tom set up an additional paymenet plan to get rid of this drain of a mortgage, instead they said we’ll call you if rates drop in a year or to so we can refinance you at2-3 thousand dollars every time and save you $100 month but extend amount of time you have to pay by another 15-30 years.Sounds like a being taken advantage of and a scam to me. We can make a case that any business any product is a scam if we look for the negatives and MMA is no different.
Tom,
Unfortunately, the same people that claim MMA works because of “factorial math” usually claim that mortgages are scams because they are “front-loaded” and take a very long time to drop the loan amount by half.
There used to be ads for a mystery book called “The Banker’s Secret”. This book turned out to be nothing more than a pamphlet showing how prepayment reduces your mortgage faster and reduces your total interest paid. Well DUH! Anyone who has a real financial background knows how mortgages are calculated and why they take so long to pay off and why so much interest is paid. There is no scam here, just math and finance. Bankers aren’t taking advantage of anyone. We can be just like the Japanese, living with our parents, saving enough to make a 30-50% down payment on our first home. Then we wouldn’t have to pay so much interest, would we? And we could get a shorter mortgage, so we could pay it off faster!
And yes, I have refinanced my mortgages for a full 30 years, so I could take advantage of smaller payments, so I could invest the difference. It seems most people would rather spend the difference, which is why they have little to show “for their years of faithful payment to banks.”
MMA is nothing more than a computerized babysitter, telling people to take their spare cash and pay down their mortgage. This is something they can do on their own. But they don’t because they are financially undisciplined, mathematically illiterate and intellectually lazy. And please don’t tell me us mere humans could never calculate the exact amount to send at the exact time. The $3500 MMA charges overwhelms any additional savings it supposedly provides over us mere humans.
When I read this
I thought you meant Mixed Martial Arts.
Just sayin’
I tried getting a partial refund from First
United, due to the fact that I couldn’t access
the program, they have my money and all I get
is attitude that I did something wrong by waiting to long to cancel the contract.
Their support staff can’t help you with your access problem?
And why look for a partial refund?
If you’ve exhausted your options with the company, log everything, including your meetings with your agent, his/her promises and claims, your dealings with UFirst support, and register a complaint with the Utah BBB against the parent company:
http://utah.bbb.org/WWWRoot/Report.aspx?site=139&bbb=1166&firm=22021100
UFirst are down to a “C” rating. This is about the only BBB entry they seem to care about. Put everything in front of the BBB and see what they say.
HI JOe,
I am trying to find time to look at the numbers you used and what you did to figure this all out and put it in my system but yesterday and today have been really long days. I will hopefully find time to look at this by tomorrow or Sat so hang on. ON the person that can’t get a refund back…..Ufirst will work with you if it is a legitimate reason you are returning it like, it has not worked for you. If you are having issues with getting into your system than they can fix that at IT or client support. THere are thousands of clients on this program if not hundreds of thousands by now and the BBB only has like 6 or 8 complaints and every one of them has been satisfied and resolved unless it is something on the end of the consumer where they did wrong. Go look at your bank or your car company and see how many complaints they have. Large companies with good products or services that service this many people in the nation are always going to have issues with people not being happy or satisfied. That is just how this world is and part of business. You can’t please everyone.
I have one unpublished post, should appear soon.
I got back in the software, ran the same scenario with no $3500 fee at all. This would let MMA tell me exactly how much it saves by using the HELOC shuffle, since my spreadsheet is prepay only.
Again, my sheet shows 251 months, with $698 final payment.
MMA shows payoff in 20.75 or 249 months. Call it 2.5 months. Only if you ignore the $3500. If you use the MMA “true cost” you are left with a balance after 249 months of $11726 (using 6% as the rate, same as mortgage). MMA does help capture the $3000 (2.5 * $1200 mort) but at a cost of nearly $12K.
TRTiL:
“Ufirst will work with you if it is a legitimate reason you are returning it like, it has not worked for you.”
That is not a valid reason in the eyes of UFirst. Call them and ask. You have (iirc) 3 days to request a refund. After that, they’ll fight you tooth and nail.
“the BBB only has like 6 or 8 complaints and every one of them has been satisfied and resolved unless it is something on the end of the consumer where they did wrong.”
Wrong. Follow my link above. They are up to 21 complaints, but if you hunt through the BBB, and it’s been a while since I’ve done this, some complaints are registered against the selling agents. People don’t realize that UFirst doesn’t give a damn about those complaints, because agents are simply disposable and a liability shield to them.
Wow!
21 complaints out of over one hundred THOUSAND sales. Most of you naysayers really seem to be on a mission. My only question is why would you post these negative comments knowing the mma actually is doing what it says. Really now, you are so few people compared to the over 0ne HUNDRED THOUSAND satisfied customers. I’m not an agent but I find these types of posts don’t really do anyone any good at all.
If you’re too stupid to do it yourself, then you’re too stupid to know that you’ve been scammed. MMA is an electronic babysitter, nothing more.
Wow, not everyone is as smart as you are! I have been part of this program for two years now and out of a 30 year mortgage I have 11 years left to pay off my mortgage and my debt. I am now an agent and I have made $8k. There are people out there that do not have the time, patient and knowledge to do this on their own. This does not mean they are stupid.
Well, Anon, it takes ‘no’ time at all. One should just pay any extra funds at month end to the mortgage principal. No patience, no extra knowledge. No sophisticated algorithms, no factorial math. No getting scammed out of $3500, and no scamming your friends or relatives. Why not scroll down and answer my challenge? 200K 6% fixed, just $200mo extra income, what is payoff time on MMA?
I understand what you are saying Craig, but even 21 complaints out of thousands and thousands of people across the US is actually a very low number and pretty normal as I said for any product oriented and service oriented company. YOu are pretty harsh on the agents and some deserve it I know that so I understand your feelings, but the company is a good company and a ton of agents are out for the client’s best interest and doing their best to serve them as we are as well so dont’ label all of them. Just like we can’t say all cops are good or bad or all companies don’t care about their employees, etc. YOu can’t knock them as a whole. I understand your frustation and I think you really got treated poorly and taken advantage of by the person that showed you the system, but there are good people out there helping people and making a differnece in their lives and if there were not then you would see thousands and thousands of complaints on the BBB……..but you don’t and you won’t.
Once again, I have not been treated badly by UFirst, because I haven’t for a moment considered buying the MMA or giving UFirst a dime. I have been threatened by an agent, but that was just funny. He was going to call his “brother in the FBI” on me.
I have reported rogue agents to UFirst for breaking the agent agreement and making ridiculous claims. In one case, agent Jim Moore (#853358) thought I had the master list of agents, and asked me to forward it to him so he could market LocalAdLinks to every other UFirst agent. I do have that list, but with no contact information. I forwarded Jim’s emails to UFirst, but Jim is still an agent.
The agent I met in person agreed that the MMA was inefficient and ridiculously expensive, but he is a career salesman, and he has a hand in UFirst and SendOutCards, probably among other MLMs.
Other UFirst agents are also involved in cash gifting scams, and if you don’t know what “cash gifting” means, google it and prepare to be amazed at how monumentally stupid these people are.
As for the relative lack of complaints, UFirst is somewhere around 70,000 agents and 120,000 sales. A huge portion of their clients are also agents, so that immediately removes about half the clients from lodging complaints against their own parent company. With the remainder, they probably think they’re involved in some mortgage utopia. Basic math proves otherwise. The MMA is a smokescreen – all they are doing is simple prepayment, in a very convoluted way.
Anonymous,
Sorry to hear about your problems. Craig is right, you should definitely file a complaint with the UT BBB chapter. You could also file a consumer complaint with the FTC also (https://www.ftccomplaintassistant.gov) if you believe their business practices were deceptive or misleading. Many agents throw around the “100% guarantee”, leading buyers to mistakenly think they can get their money back whenever something goes wrong. UFF will only refund “100%” if you cancel within the first three days. After that, good luck. HELOC’s frozen, employment/layoffs, credit cards canceled, major emergency payments…none of these are grounds in UFF’s legal eyes for a refund, even though every one of them would adversely affect the “payoff date” compared to your initial analysis.
Craig,
I heard from the leaders that only 30% of the Agents are on the MMA, hence their push to get more agents using it (you can’t effectively sell what you don’t use!)
Also, the “liability shield” is about to weaken somewhat. UFirst is starting an “Inside Sales” force to start selling the MMA. I don’t know if they’ve started yet, but overall, 2009 sales are down. One top agent who made well into 6 figures last year is on pace to only make 50% this year (nearly all from downline, of course).
When I plugged Joe’s setup into the software, I got a final payoff in 21.25 years, with only $200 discr. income. (I set all payments due on the 25th of each month and all paychecks to be the 1st and 15th of each month. That is likely the source of the slight difference in payoff years/interest). This was using an “Aggressive Scale” value of 1. Cranking it all the way to “6″ gets a final payoff in 20.92 years. That’s a lot of shuffle for no real value from a simple prepayment method.
PS, when I entered a hypothetical MMA purchase of $3,500, and selected the “Best Time to Buy”, it gave me a date over a month ago!
L2G, so what were they up to now? 130,000 or so agents and clients combined? So if 70% of agents are not clients, that means in rough numbers, UFirst’s total sales to date would be about [130,000 - (0.7 * 70,000)] = ~81,000 MMAs sold.
Gross MMA income for UFirst would therefore be $81 million. They make $175 for every agent signup, so they got an additional $12 million from agents. Together with other income from agents paying for merchandise and UTracker Pro versions, UFirst has probably broken the $100 million mark in gross income if you combine all four years of their existence.
Of course, their office, salaries, marketing, and paying magazines to write fluff pieces about them can’t come cheap. Those costs are mostly fixed. If 2008 was their best year, and they are down ~50% in 2009…no wonder they’re laying off staff. They’re probably already back in the red.
Interesting information. Thanks for sharing.
Oh yeah, don’t forget the millions they spent on GE Aerospace mathematical engineers from NASA to develop the MMA. Factorial math ain’t cheap, ya know.
lol
Craig,
From my best estimates, no more than 120,000 combined agents and clients. But here’s the kicker. Right now, an agent gets a Demo account. If they are also users/clients of the account, they get a different account. So the 120K is double counting.
As of right now, there are no more than 68K agents (total, including many inactives). That leaves ~52K “clients”. If we assume 30% of ALL agents are also users (conservative), then ~20K of those clients are also agents. Which leaves ~32K sold to mostly friends, family, etc. That’s not even 1 sale per agent.
Just fyi, Ufirst is a “DEBT FREE” company and just moved into a 30,000 sq ft building free and clear so they are not in the red. Sales are down all over the US in most every company and product and you should know that is no surprise that they are down 50% in sales, if that is true, I don’t know the numbers but I guess someone who is speaking here seems to think he knows a lot about the company. I dont’ believe anyone writing on the internet, anyone can write anything they feel like but that does not mean its the truth and documented. Its just a bunch of opinions. Secondly, if they were not doing the right thing for people and clients were upset and not getting what they paid for and that huge benefit of savings then yes, there would be thousands of complaints to the FTC and BBB so obviously there are not or they would have been shut down already. I admit their agents are not all the best and the most knowledgable or truthful, but there are always dishonest salespeople in any organization that large. For the most part, their agents are really good people and want to help people sincerely and of course people who work hard want to get paid for their work and should so yes they get good commissions and paid pretty well. That is the business model Ufirst set up and its the same one as Keller Williams, #1 real estate company in the nation has, and same as the insurance industry. They can’t pay people off or Ernst & Young or all the leading industry expert magazines, sorry , but that does not make any sense at all guys and if you believe that then I don’t really think you understand what you are talking about or have been in the financial industry ever. I am sorry you both had bad experiences, but I really dont think it is wise or fair to bring down a whole company for some of what its agents did. I know for a fact people get their money back after 3 days or longer because something happened to our clients income and some issues with their lives changed and they got their money back. I would really stop talking if you dont know what you are talking about. I will also find the time soon to put Joe’s numbers into our system and run them and see what I come up with but I have been so busy with large developer meetings and people that really see this and understand it as a solution and huge benefit and savings to stabilize this market.A few of you are going to really eat your words in the next few years when this is a household name. If everyone can do it themselves and pay off their homes and cancel the interest this product is dancelling……then why is America in such a mess financially and in so so much DEBT and only 5% of Americans even own their own home? Think about that. That is the latest statistic out in the news on homeownership and I can’t even tell you how much we all owe in DEBT to credit cards, cars, loans, student loans, and other debt in America. Have a nice life with your debt.
RTL – I await your response. You will realize that MMA and the HELOC shuffle do not produce enough savings to even pay for the $3500 fee. This is a fact. You will only be left with the idea that it provides some motivation factor beyond what one can do on their own, or is willing to do with free spreadsheets.
Forget about all the references, they are just a distraction. The fact that most agents can’t tell the difference between an accurate result and an entry error should set off a red flag. The difference between 21 years vs 15 should be obvious, especially when run on the classic example. You can debate whether it’s just a few, or many, but, I don’t mean to be unkind here, you, yourself are unable to find such an error.
As I’ve stated, the simplest error is for an agent to take a semimonthly income and enter it as bi-weekly, this is an error of 8% which will cut a mortgage by about 5 years depending on other factors. I have found agent after agent who do not detect this error, but the analysis sheet makes it obvious.
And for the last time, I beg you. Paragraphs. I’ve had civil dialogs with agents who want to become more credible and if nothing else understand their own product better. My first piece of advice is to improve their writing skills, second avoid tangents that seek credibility.
Man, you’re angry!
I have a friend that is an agent and trains every flippin day. Always learning something to offer her clients. How can it be a scam when these people that CHOOSE to believe in this product and use it the way it was intended really do save way more than the 3,500 dollar investment ? My understanding is that most people use the money in the heloc for the software and no real money ever changes hands when done this way. I say again. I know personally many clients that are very happy they made the move to get on this program. I might also add that most of the ones I know actually are very educated and researched this before getting the product. You’re a bitter man and you will fight tooth and nail to be right. Let it go. If you want to really get upset find out why Obamas wife wrote while in college against the constitution and why won’t it be released for all to read or figure out real problems with the economy and why people suffer so much. I’ll vote for you if you can fix everything! UFF is ok or the thousands that are on it would say otherwise.
Angry? Hardly. What in the world gives you that impression? RTL made claims she cannot verify and bolted.
Bill, why not ask your agent friend – what will the payoff be with only $200 extra money each month? Use the classic scenario, $200K, 6% mort. No other debt, no other assets. Same $5000 net per month. I am just curious if the numbers are close to other agent’s results.
How can it be a scam? I have no idea, only about 60 pages (in a nice PDF) I’ve posted on my site and numerous examples of falsehoods or misunderstandings from agent sites. “No change in spending” “you can’t do this on your own” “Use the bank’s money”. Yes, I believe that 100K people can fall for such a scame. Who said there’s a sucker born every minute? Well, I know how they are spending their money.
TRTiL,
For how “busy” you’ve been to not have time to rerun Joe’s numbers, you sure have had plenty of time for long posts. I was able to closely replicate his findings in no more than 10 minutes. Surely you’ve got that much time.
You’ve also covered a lot of other items that have been talked about over and over in this thread. Have you read any of the previous comments, specifically how “Ernst and Young” just sponsors the award and does not vet or chose the winning entreprenuers? I won’t go into all the magazines, but I have covered them here before. Click on the “Older Comments” at the bottom of the page to read any if you “find the time”.
We can wait for you to run Joe’s scenario.
PS
Madoff is a household name.
Late2Game,
Are you still using your Florida mortgage company link as an example of how bad MMA is? After I pointed out that the information you were presenting in opposition to MMA was based on untruths and fear tactics you disappeared.
As you know I don’t mind disagreement about MMA but it would be nice if just one anti-MMAer would acknowledge it when they present false information instead of running to another blog. Frankly, it’s hard for me to give you much credibility on other things you state when you do this.
If you make a mistake or if you’re wrong stand up and acknowledge it instead going into hiding only to emerge somewhere else.
I read some of these other blogs from time to time but I had decided to post only on the one you abandoned after you presented that false information. When I saw you on here I just had to again compel you come clean.
The Real Truth in Lending,
I used MMA for four years. It worked. I paid down my mortgage at the rate it said it would. It was a great psychological boost to me to have a system that helped me accomplish this.
But I quit using it a little over a month ago, when I realized I could accomplish the same, if not a little better results without the system. It did get me on track to understanding what I could do on my own.
Using MMA will not save you one penny in real money. The one and only advantage it has is psychological and teaching some financial discipline. It is a system that works that costs 3500. You can get a similar system for a lot less money or just pay more money toward your mortgage without a HELOC, as I am now doing. You will get the same or better results.
Again, there is absolutely no mathematical value to the HELOC recycling system as used by MMA. If you promote MMA to others on the basis that it will save them money or that somehow they are using the bank’s money instead of their own you will not be telling the truth. All of the savings is the result of their own (discretionary) money.
Matt,
Good to see you found your way over here! I apologize to others who may not have followed a different thread. And I apologize for the long post.
To address your comments, Where did I say that previous link was, as you say, an “example of how bad the MMA is?” The discussion I was trying to have with you was on risk. No where in my words do I say “this link proves MMA is bad”. I realize the author of that link has strong feelings towards the MMA, (as do I), and as you pointed out, he makes some generalizations and even misstatements when referring to home owner’s insurance policies. I think that his example cases are over the top.
My point for linking to his site was more to reference the point (and I should have clarified this fact) that the emphasis was on “risk” in equity. The truth is, risk exists in everything, even in equity, and even if he didn’t state it correctly. Is it on the same level as owning a single company’s stock for your retirement? Of course not. Is it negligible? Well, if one is sending every bit of their discretionary income towards principal payments, through other debt instruments, I think it isn’t. How liquid is equity? Sometimes not enough. But to each their own.
You and Craig both desired to pay off equity debt in an accelerated manner. And I think that is a fine choice to make, when one takes into account the larger picture, including, among other things, their personal risk tolerance. (Kudos for shifting your retirement account holdings to conservative ones at the right moment, by the way. Maybe you can give us all a heads up on the next bubble peak.) In some cases though, it MAY not be the best place for one’s next discretionary dollar. And many agents, especially the financially innumerate ones, only present one message.
Speaking of agents, I am interested in the person who “introduced [you] to the MMA” (Post #2304 in thesimpledollar.com thread). If your timing that you stated in post #1660 is correct, you said “I started on the program April 10, 2005.” I still am confused by that date because:
1. In post #1664, you say regarding equity acceleration programs, “MMA being just one and happens to be the one I first discovered.” You refer to the Money Merge Account, of course.
2. United First Financial Distributing, LLC was founded, according to the Utah Business Entity Search, on January 18, 2006. (http://www.utah.gov/serv/bes and search “united first financial”). So you wouldn’t have discovered it through UFF, since they didn’t officially exist (United First Financial, LLC was registered in 2007).
3. The prior company to UFF was Accelerated Equity & Development, Inc. (AED). They offered what eventually became the “Money Merge Account”, but it was called the “Principal First Account”. The same words that, in post #1660 you state, “I have never heard the precise term Principal First Account…”
4. The Principal First Account (PFA) was being offered by AED for a good while, even in to 2006. In this thread,
http://www.money-talk.org/thread5390.html
a user inquires about the PFA, in Oct 2005. In this thread, a certain Ryan Sabin (UFF) also refers to the PFA, in May of 2005,
http://friendsinbusiness.com/board1/archive2/index.cgi?read=95092
5. It wasn’t until trying to trademark Principal First Account that the owners found out they couldn’t, so they chose “Money Merge Account”. The US Patent Office shows the trademark application for “Money Merge Account” was filed on Jan 4, 2006. The First Use and First Use in Commerce of the term “Money Merge Account” are both listed being June 28, 2006, (http://tess2.uspto.gov no direct linking, search by terms). This is also shown by the Internet Archive Wayback Machine. The term Principal First Account was used on their website up to at least Jan 29, 2006
(http://web.archive.org/web/20060129043609/www.acequity.com/)
So, how is it that you have been on the “MMA” since April 10, 2005, but neither terms “United First Financial” nor the “Money Merge Account” as named, were in the public? Who was the person who introduced you to the MMA?
Just curious.
PS, if every agent would add some version of the two paragraphs you wrote, starting with “Using MMA will not save …” to what ever presentations they do, I would not bother wasting any more time posting on the internet at all. Thanks for your honesty.
Late2Game,
Regarding your post, one other person noted that it was “completely goofy, and I made a post to that effect.” (#1676) You were never heard from again.
As far as all the stuff about when UFF started you will notice that I have rarely used the term UFF but rather MMA which I thought for a long time was simply a generic term and I did not start the program under UFF, as your careful research has confirmed. However, MMA is in fact the term that was used when it was presented to me by someone in April, 2005.
I don’t really know what your point is in all of this. I was just wondering why you would direct people to a post with such obviously flawed information to make your point and then not stay around to either defend or correct your comments. I’m pleased that here you admit that his examples are at least “over the top.” At the time you said it was “a good write up of the risks involved in paying all discretionary income to a mortgage.”
You can take the opinion that paying discretionary income to a mortgage is a risk if you wish, but that write up is a terrible argument for not doing so.
Matt,
I only had a short chance to read some of your following posts on that thread, with all of the tangents calvin and you took. I guess it has slowed down to a few posts a day now, but I don’t know where you both have the time to post as much as you do.
Regarding your use of a different program, that makes sense now. Since you used the term “MMA”, short for Money Merge Account, which is trademarked by United First Financial, that led everyone to believe you were on that exact program. Why did you let statements like (#1636), “You paid $3500 once to UFirst…” slide by? From what I have read, you seem to be the type to correct any and all details made about you. You may have mentioned it in a later post (did you?), but I stopped reading the flood of responsese as they came in my email. Doesn’t seem like your MO.
By the way, if you don’t mind, what other program were you on? I know the Home Equity Accelerator (later called Home Ownership Accelerator) was available in your timeframe.
The fact remains that “risk” exists in all financial aspects we undertake (or fail to undertake). Opportunity cost, interest rate, liquidity, credit (for HELOCs) and market risks are all present to some degree or another when considering using the Money Merge Account.
For the person, in yet another thread, who had very little discretionary income to begin with, was put on the Money Merge Account, had their HELOC almost immediately frozen, whose job is being threatened in the down economy, and readily admited they “[aren't] the best in finance”, the risks I stated above are large and looming.
For someone like you, who has (from what I can gather) a well rounded portfolio (retirement, savings, etc.), actual discretionary income, financial discipline, and is towards the end of their pricipal payments, well these risks are substantially less.
Wouldn’t you agree?
Late2Game,
“The fact remains that “risk” exists in all financial aspects we undertake (or fail to undertake). Opportunity cost, interest rate, liquidity, credit (for HELOCs) and market risks are all present to some degree or another when considering using the Money Merge Account.”
Who said there is no risk in various financial aspects we understate? My concern is using such a blatantly untruthful argument to illustrate your point that there is risk in paying discretionary money to pay off one’s mortgage.
Now, if you would respond to this instead of changing the subject I would appreciate it.
But so you will know, I was never asked to be an agent with MMA. It was presented to as I described on the other blog (on a trip I made) and I bought the system and decided to start using it. I can tell you, because I just looked at it, that the words money merge is on the software I used. Sorry to disappoint you in your diligent research on this. I still don’t know what you’re trying to prove and why you won’t respond to your description of something being “a good write up” when in fact it is completely off-the-mark write up.
Oh well, I suppose you’ll just come back with more quasi “research” rather than constructive dialogue.
Matt,
Why the harsh tone? Now you are playing the calvin, and I am the Matt.
“Now, if you would respond to this instead of changing the subject I would appreciate it.”
I’m not changing the subject. I am addressing the facts that I was interested in finding out about you, and my continued thoughts on risk, which I clearly stated was what “I should have clarified” when posting a previous link. And I also stated above, “I realize the author of that link…as you pointed out, he makes some generalizations and even misstatements when referring to home owner’s insurance policies. I think that his example cases are over the top.”
You said, “Who said there is no risk in various financial aspects we understate (sic)? My concern is using such a blatantly untruthful argument to illustrate your point that there is risk in paying discretionary money to pay off one’s mortgage.”
What is blatently untruthful about opportunity cost? Interest rate risk? Liquidity risk? Market risk? If I didn’t make it clear, my argument is not about whether someone should use discretionary funds to pay down a mortgage. I applaud those who make good financial decisions, including aggresive debt paydown, when they take into consideration the larger picture, including their own risk tolerance.
I stated that for someone like you have made yourself out to be, the “risks” involved are lower than it may be for others. And in this economic environment, those factors and “risks” need to be taken into account.
Matt,
You said, “But so you will know, I was never asked to be an agent with MMA. It was presented to as I described on the other blog (on a trip I made) and I bought the system and decided to start using it. I can tell you, because I just looked at it, that the words money merge is on the software I used. Sorry to disappoint you in your diligent research on this. I still don’t know what you’re trying to prove…”
I don’t think I was trying to prove anything. I was just curious on what program you were using, since 4+ years is technically longer than those clients who bought from United First Financial. And since those agents/users are the most vocal on the internet, I have learned quite a bit about their program. But not so much about some of the other ones, except they for the most part function similarly. I don’t mind if you don’t want to mention the actual program. I’m just curious that’s all.
I remain shocked that RTL has let so much time pass with no response. It seems she’d rather hang on to the data entry error than admit to the truth. More so, I’m sorry that more agents don’t frequent this site. It would seem that 4 agents could hop on and either agree with me or confirm RTL’s numbers, and show me my error. Logic tell me that when I go into the MMA site and ignore the cost of the program, it should beat my spreadsheet slightly, by using the HELOC shuffle. If that Shuffle can’t save more than $3500 (it can’t), then we can quantify not the savings of MMA, but its own “true cost”. Gas grill $400 today, true cost = $1600. MMA cost today $3500, true cost $14000. The only thing ironic here is the use of word Truth in RTL’s moniker. As least I pay my taxes, and then some.
HI Joe,
NO I am still here, but I have been really busy and now talking to large residential subdivisions and HOA’s about helping their homeowners and builders with this financial tool so sorry but this is much more important than blogging on the internet. People need helpl out there and we work 15 hour days trying to help them……that is what is important. I ran your numbers and still I got a payoff of little over 14 yrs so I really dont’ know how you are deriving at your numbers and maybe you are not using the money merge account system, but if you were , you would derive at the same numbers.I will not be blogging on this anymore because it really is a waste of time for everyone because people are going to listen to themselves and what they think they know. Also, because I did some research and found out that “blogging on these sites” is an actual business and a money maker for the person that has the site up, and they want people to blog because that makes more hits on their site which creates more ways for them to make revenue and sell advertising and paper click marketing on their blogs. So you see bloggers and sites like these absolutely love all these messages. People create ways to dispute products and solutions, and say they are a scam so that they get more controversy and conversations, but really you know that most of you are just making statments that are not true just to make them.
I used the UFF MMA site to produce my numbers.
How dare you call me and others here names, but when you are caught in a blatant falsehood (which I kindly offer you to correct as an error) you claim to be done. Not the first time you offered to not visit and defend your position.
If you have any contacts (I assume you agents all hang together, den of thieves style) you can ask a fellow agent to set you straight. Why not run an analysis and sent it to me? I catch most errors in seconds, the tougher ones in minutes.
Madoff was sentenced to 150 years. Maybe the scammers of UFF will only get 3-5.
TRTiL
“Paper click marketing”, sign me up!
Joe,
In addition to the MMA program, there is also the “analysis” web-interfaced program where an agent can plug in probable numbers to generate the reports that I’m sure you’ve seen. When I plug in the standard 6% $200,000 mortgage, with semi-monthly income of $2500, a savings account of $5000, a checking account with $1000, no creditors, and no other debts (only the $200 discretionary income), and no HELOC, the analysis software says the pay off will be in 21 years, payoff date of 6/1/2030. The full ammount of the MMA ($3,500) was paid from the savings account.
Adding a zero balance HELOC ($15,000 limit) to the above analysis, changes the payoff to 20.75 years (3/1/2030). I did this in under two minutes. I don’t know why this would be so hard for TRTiL to do. It requires input in only 5 screens (Property, Mortgage, Income, Banking, and Analysis).
The 3 month difference using the HELOC is equivalent to making a $1500 extra payment in the first month and then continuing with $200/month (248 months with 387 final payment). $1500 happens to be what is leftover in the savings account after paying the full fee for the MMA (5K – 3.5K).
And it would seem that faith alone can improve those results by as much as five years or a bit more. Like a moth to a flame, you know she’ll be back. (I find her remark on the blog traffic laughable, did she just arrive on the boat? She doesn’t know that blogs tend to run ads to make a few cents by sending guests to purchase something? Does she think television is any better? Paper click is right. Innumerate, illiterate, and just ignorant, I suppose.)
“I used MMA for four years. It worked. I paid down my mortgage at the rate it said it would. It was a great psychological boost to me to have a system that helped me accomplish this.”
Hmmmm….Me thinks me sees another problem. The original analysis is based on current spending levels. You said it was a great psycological boost…and in the S.D. blog you said it led you to decrease your wasteful spending and pay down your mortgage even more aggressively. If it did so, you would be paying down your mortgage far more quickly than the original analysis.
If indeed, it paid down your mortgage no faster than it originally said you would, then the software had no effect on your spending whatsoever.
Sorry, but math never lies.
I beleive we have a breakdown in understanding by all parties both pro and against MMA.The only way to solve any disputes is with understanding from where each side of the arguement comes to his or her conclusions. Maybe the MMA is overpriced, maybe its underpriced. The answer lies with the individual, being a financial professional for the last eight years has helped me greater understand that what product works for you may not be suitable for your neighbor. Without knowing a persons financial situation I beleive it is pointless to argue whether the products they choose to use are appropraite until we understand their situation and what they are capable of accomplishing.
Price is a factor but is not the only factor as is evident with any product we purchase. How can we justify then paying 50,000 for a vehicle when we can get similar results with 25,000 one.Price alone does not make a product or a company a scam, nor does lack of value from one individuals point of view. Companies come and companies go and time reveals all, I beleive people have been calling Amway a scam for over 4 decades and yet they still employee thousands of people and sell hndreds of millions of dollars of merchandise, yet some still say its a scam, I do not see the logic in this, as scams are found out and then eventually weeded out by the market place.Whether you like the MMA or not it continues to grow and produce results, ultimitly the market will decide whether it is a viable product at a viable price. Peoples opinions vary but the markets never lie, I believe that time will only enhance the value of the MMA , and that contrary to many posting on this site people are smart enough to make decisions about program regardless of what anyone tells them. Ive seen it in my business every day fro the past eight years. Thats my ten cents atke it for wat its worth to you and good luck to all whichever side you favor.
“Price alone does not make a product or a company a scam, ”
but false advertising makes it a scam….and I have yet to meet, hear from, or read about an agent that meets all these criteria:
1. Is honest
2. Thoroughly understands the MMA (ie, can do the simple math to simulate it correctly)
3. Understands finances
And I have interacted with literally hundreds of agents.
“Whether you like the MMA or not it continues to grow”
That might not be true….it’s MLM…and many of the top people are jumping ship. The company has issued policies to the agents NOT to post on internet blogs and forums because these sites (with people telling the truth) are getting too high of search engine results. Many top level people are jumping ship. I don’t think it is growing, but that’s my gut feel not based on any data.
AWESOME!!!!
TS…..AWESOME!! my only hope is that more read your response. Educated in every way. I’m done. Thanks
I’m sending this to my friend that is an agent. She really feels bad that these people are so bitter. She is in this to help and thats all she wants.
Again,
THANKS!
I can asure you you dont last in the financial industry through two of the worst market corrections in our nations history by not being honest. My business is proff of that. also, unless you are schooled in the process of factorial math, which Im pretty sure your not then no you wuoldnt understand how it works , just as none of us understands how a microprossessor produces graphics, text and other functions through silicon, that doent mean the technology is flawed. I can assure you I understand about finances. These three points automatically make your points mute as you have made a blanket statement.Contrary to what you think US dept of labor statistics show great growth in the direct selling industries. You can look for yourself at USdepartmentoflabor .gov
Tom, I actually do know factorials (note: “factorial math” is a made up term, it’s like saying “division math”). You being the long standing financial expert, you’d know factorials are completely unnecessary. If you want to know the optimal order to repay debt, order the loans from highest interest rate to lowest (tax adjusted of course), and go to town. Of course, you’d also know the UFF’s MMA algorithm isn’t even optimal for that given approach, right?
If you did know factorials and the computations involved, you’d know that a computer calculating the payoff dates on *ALL* the combinations of 30 loans by way of brute force (doing all 30*29*28*….*3*2*1 combinations) would take a rather long time versus a person ordering 30 interest rates. It’s an extreme example, but factorials get big quick, and in this case, unnecessary.
“Contrary to what you think US dept of labor statistics show great growth in the direct selling industries.”
??? What are you talking about? We are talking about 1 company with 1 product….UFF’s MMA. We aren’t talking the entire direct selling industry.
Keep posting, you should have the reputation you think you’ve earned torched in no time.
CALVIN , Thanks for your acknowlegement of me being a longtime financial expert, no one has ever given me that endorsement,appreciate it. also you said “that might be true..Its MLM” I thought you were referencing the industry,my bad, but I beleive contrary to you that UFF is continuing to grow. Dont see how our reputations have anything to do with opposing points of view.
Oh, I don’t think you are a financial expert in any way, shape or form, I was just pointing out that you seem to think that way. IMO, any financial planner pushing the UFF product needs and and all credentials yanked since they are either ignorant or dishonest.
So….any comments on the complete uselessness of “factorial math”? Do you, as someone working in the financial industry, think that running millions to trillions of different debt payback order scenarios is a worthwhile exercise?
trying to find credibilty in your statements when you say “you being a long standing fianacial expert” then saying ” I dont think you are a financial expert in any way shape or form” I think any excersise that may reveal the fastest way to accomlish something is worthwhile regardless of what you may think.Im only here to learn other side of coin, not be attcaked when my statements dont match your opinions. If I were ignorant and dishonest I wouldnt care about others veiwpoints and not be here in this forum.m Id just be out slinging MMA’s not caring if it works or not.
Tom –
Sorry, once you pull out the “factorial math”, your credibility drops to nil.
I happen to be an electrical engineer and do understand how text and graphics are generated. Funny you pulled that one out. Had you talked about something medical, that would be different.
But I went to college for 4 years to understand these things. The math behind MMA is based on fourth grade arithmetic and doesn’t even keep up with that. I’ve proven it and was looking for your comments, not the endless agent rhetoric.
Joe, I could say same thing about your “But I went to college for four years to understand these things” That drops your credibility to nil. What does college have to do with credibility, I went for 8 years, your logic would mean im twice as credible as you, and we both know thats not the case. I was mearly looking to see your level of understanding and your attack was unnecessary, yes your electrical engineering back ground helps you understand how text and graphics are generated but its not necessary to know that in order to operate a computer, thats point i was trying to get across. Seems we will agree to disagree and I thank your for your time and youve given me a differnt point of view to ponder.Would it be safe to say that if the MMA cost same as say quick books pro we wouldnt be having these conversations?
Tom you wrote “just as none of us understands how a microprocessor produces graphics.” I happen to have an EE degree. You brougyt up the topic, not me. What does graphics processing, fourier transforms, or Schrodinger’s cat have to do with MMA? Why do agents always reach for analogies that easily fail? You compare the knowledge that is the equal of a 4 year college degree to a piece of software that shows how it fails at fourth grade math.
For “free”, MMA lags simple prepayment, but by only a bit. It’s less about the price than about all the exaggerated claims which is what make it a scam.
I’ve proven many times that the system doesn’t live up to its own claims, often posting using only UFF video links or web site as reference. Agents choose to go off on tangents discussing everything but the system itself.
The MMA is not a subscription-based service. By definition, it can only “grow” with each new sale or new agent, but the rate of growth has decreased substantially, and that can’t bode well for UFirst, who have fixed costs which must be paid.
Of course, UFirst is a terrible way to make money, because most people see right through the sales pitch. That’s why there are almost as many agents as there are clients. Published UFirst sales figures are dim, with a very small number of agents making a decent income, just like every other MLM.
Tom, as agent #920831, you’re one of the newer agents on the block (there were 56000+ agents before you), and you’re apparently new to debating the merits of the MMA online. Having monitored new agent signups, the rate has definitely slowed. A memo went out to agents back in late 2007, warning them not to engage “naysayers” online, because the popularity of these discussions only increases the search rankings. Maybe you didn’t get the memo.
Craig,
Tom posted a response to your 6/24 post above and lumps you in with US taxpayers, if you haven’t seen* it yet.
*This new inline reply system is easy to have sub converstions, but difficult to track the most recent posts.
Yeah, it’s a tradeoff, I think that it’s worth it though?
I think it is fine, although I have seen a few examples of replies that were under a specific comment that should have been at the end, but I guess the UFirst agents that come by here can’t all be up-to-speed on the commenting mechanisms.
“Would it be safe to say that if the MMA cost same as say quick books pro we wouldnt be having these conversations?”
I think it is safe to say that, regardless of the price, most people wouldn’t be arguing to feverishly if UFF agents would just tell the whole truth. But that isn’t the case, they use phrases like…
“let the banks money pay for your house”
“factorial math does what people can’t do on their own”
“pay off your house faster than you can on your own”
“leverage your money”
“no change in cash flow”
“no extra payments”
“pay down your house in 1/3rd of the time with no change in budget”
etc, etc, etc…
lies, lies, lies…
then their’s plain ignorant statements like….
“unless you are schooled in the process of factorial math, which Im pretty sure your not then no you wuoldnt understand how it works”
and that’s directly from you.
As an agent, I will say that this program doesn’t work for every person. With all my clients, I run the analysis, then I run a mortgage payoff calculator using their discretionary income. I would say that most clients, it is in their best interest to go with the MMA. Not all mind you. Each situation is different. But one of the problems with sending a check with your discretionary income to the bank is that people have a hard time writing that check. And making sure that they haven’t spent it that month. With the MMA, that extra money is an afterthought. It does create discipline in spending. And that is one very overlooked benefit. Sure, someone could do this on their own, and probably come close to what we have, but do they have the discipline to follow through on it.
But where this really helps is with paying off multiple debts. It’s not as simple as paying off the highest interest rate. That is a good start, but it may not be the best method, depending on other factors such as payment, open-ended vs. close-ended loans, balance, etc. If you have the time to sit down and figure out how to pay off 5 or 6 debts so that you maximize your interest pay off, more power to you. Some people would like to take the guess work out of it.
Chris, get ready for your beatdown, its coming. Ive tried to learn reasons for opposition to MMA here but despite being civil throughout, my posts have constatnly been criticized. I will be calling UTAH Deptment of commerce and Utah justice department to answer questions about valitity of UFF being a scam. Will head whatever advice they give me, will know if im right and these guys are.good luck
Tom, I just don’t get what people have against this product. Before I joined up, I did a lot of research because I was in mortgages before and I was very skeptical. I believe in it not just for the tangible, but the intangible benefits that it brings. Fact is, if this is so easy and everyone can do it, why aren’t they. Maybe they need that guide to get them going. And as I said, the program is not for everyone. Not all agents will say that, but I will.
Chris – May I trouble you to run an analysis on the numbers I offer above?
$200K, 6% mort 30yr. 6% HELOC. NO other debt. NO other funds. $200/mo extra to pay to mortgage. Tot income is $5000 net/mo.
This is the classic example but with only $200 extra. When you reply, please note whether you include the $3500 fee or not, either way.
What payoff time do you get?
Joe
Thanks to all who have commented an provided feedback, is appreciated. I have just got off the phone with The Utah Dept of Commerce and the Dept of Consumer protection.Both,”while not endorsing any product or company assured me that as of 6/01/09 UFF was of good and active statnding with those regulatory agencies” I have also made inquiries with the Federal Trade Commission and have asked my attorney to contact the Utah attorney generals Office to inquiry as to status of UFF. If they say its ok that will answer my questions. Thanks to all and wish you best.
Tom,
I could have saved you a call. Most users are agents. The rest bought from a trusted friend or relative. Hoe many complaints do you honestly believe are on file? That few are complaining doesn’t make the product reputable.
If you and Chris would reply to the numbers discussion it wouldn’t take long to discredit MMA. Certainly not the 60+ pages I compiled from my blog. It was a learning process. From Calvin, Craig, Jimmy, et al, it only takes a few questions and responses to set things straight. You guys aware Jamie Buckley defected? His Jubilee sites are either closed or for sale. Think he saw the light?
Jamie did not see the light whatsoever, he just changed which program he was hawking. The only “light” he saw was that the UFF name was pretty tarnished on the net (the best sales medium) and decided to sell a competitor’s product.
“Sure, someone could do this on their own, and probably come close to what we have”
Chris…this is EXACTLY the crap we are talking about. By definition, the MMA, with it’s $3500 fee can NEVER beat what people are able to do on their own.
“what you have” might be able to come close to full prepayments….if it were free. But $3500, plus the added interest that brings, measured in thousands, or tens of thousands for those with little discreitonary income is always at a disadvantage.
Stop lying and we will stop calling you liars.
Actually, the MMA does beat what people can do on their own, in most cases. You really have no idea how the program works, or how interest works on a 1st or 2nd mortgage.
“Stop lying and we will stop calling you liars.”
I have proven to my clients the benefits of the program. If you have a problem, maybe you should do something about it. Sue the company. Do something instead of being a little whiner on a website.
BS. I know EXACTLY how it works. I’ve simulated in a spreadsheet that shows daily money movements, interest accumulations, ect along with a side-by-side comparison to a standard prepayment system. I’ve paramaterized all the variables so that one can enter in various interest rates and terms and the numbers adjust. It just never works out for the MMA. Amazing what that $3500 anchor does.
And as others have said, I cannot sue. I have no damages to claim. Only the customers you have lied to on a daily basis could do that. But someone would have to show them your lies first.
Hey!!!!
Why don’t you start a class action lawsuit! Loose it, then find something else the whine about. You’ve not really gained positive popularity arguing this. To me it is you that looks pretty stupid,you really are beating this you death.
Sorry!
Just my thoughts. And, you sound like a bully!
Chris, you planning to answer my simple number question? Or are you just going to start name calling?
Years ago when I remarked about Madoff’s returns being impossible, I was called a whiner. But now I laugh last and laugh loudest. MMA does not beat DIY, and I can prove it. With numbers not words.
Calvin and I can’t sue, we have no standing, no loss to claim.
Joe,
I look at the DIY numbers everytime I do an analysis. Like I said, sometimes the numbers are in the MMA’s favor, sometimes not. But there are other advantages to the MMA than strict numbers. But if you have multiple debts, the system really works in your favor, which I doubt you can figure out with your DIY system.
So you will not answer the question I pose above, the classic scenario with no other debt, $200/mo.
Chris
You posted “But where [MMA] really helps is with paying off multiple debts. It’s not as simple as paying off the highest interest rate. That is a good start, but it may not be the best method, depending on other factors such as payment, open-ended vs. close-ended loans, balance, etc. If you have the time to sit down and figure out how to pay off 5 or 6 debts so that you maximize your interest pay off, more power to you. Some people would like to take the guess work out of it.”
I’ve posted spreadsheets showing how a simple debt snowball using highest interest pays debts off faster than MMA, and more cheaply. And all it takes is one addition per debt and one subtraction, once per month.
Please show us a scenario that proves the opposite. Your statement sounds an awful like the spurious “factorial math” claim. Every agent that comes on these boards makes the same claim and never backs it up. Please be first. Thanks.
Since I have no idea what numbers you are using, how can I compare?
C’mon Chris, don’t back out now! YOU posted the claim, on 07/01 at 2:57 pm, that MMA is better in some cases. So please show us those cases. Show us the payment schedules. Show us how much interest is paid.
In case you aren’t familiar with the debt snowball method, which is all over the ‘net, here it is. You simply commit a sum to pay off all your debt, choosing to concentrate on one debt, and paying minimums on the rest. When that one debt is paid, you shift the extra cash to another debt, and so on, until everything is paid. How you choose the debt to pay off is up to you. Some people like to pay the smallest debts first, regardless of the interest rate, because they figure that’ll be easiest. While it’s not best financially, if that keeps them focused on payoff, great.
Chris -
I know there are three people challenging you at once here.
I ask you to answer the simplest question;
$200K, 6%/30yr mort $5K net income per month. No other debt at all, no other assets (i.e. no money in ck/savings) Only extra left each month is $200.
What is the payoff time using MMA? This should take you 2 minutes to respond to. When you have the time.
Joe
I am shocked that after all the dialog, it goes silent. RTL and Chris both decide that my very simple question gets ignored. Why? Because with out $1000/mo there to really confuse the issue, a much lesser number brings out the factthat there is *no* saving from MMA. It’s all your money and then some. Side by side, even free, MMA falls short of DIY.
Dear Bargaineering Jim,
Nice blog site but – like the vast majority of critics of U-1st – you don’t know what you’re talking about based on your cursory review the Money Merge Account.
Sending two checks per month to a mortgage company WILL reduce your mortgage. By about three years. Sending $3,500 to your mortgage company will reduce the average $200k mortgage by about 16 months (if you send the $3,500 along with your very first mortgage payment).
I have been a financial planner for 25 years and I use MMA selectively with clients; I do not market the program as many U-1st agents do and I am not a “Kool-Aid drinker.” There are no doubt dishonest people who have managed to sign up as agents but the MMA system itself is without parallel. There are 20 BBB complaints against UFF right now. And about 40,000 MMA accounts sold.
If you’d like, I’ll send you an MMA analysis for my most recent clients (with their names off it of course). It takes their current 28 year mortgage and reduces it to 16, saving them $106,000 in interest. Oh, forgot to mention, this time and interest savings includes them ADDING $100k to their debt picture to finish construction on a vacation home. So in essence, they not only pay off their current $400k mortgage but they also pay off the additional $100k in 12 fewer years than they’re on track just to pay off the first mortgage. And it’s GUARANTEED to work or they get their $3,500 fee back.
If we look at the $3,500 as an “investment” over a 16 year time horizon for a “return” (saving money is the same thing as earning money) of $106,000, we find – surely you and other critics can use the ROI calculator on Excel – a an annual rate of return of 23.76%. Tax-free.
If you or any of the other critics can show me specifically how to pay off a mortgage faster – and have the results be guaranteed or I get my money back – I’m a buyer of that cheaper system. But please first answer this specific question (which a bright financial advisor/attorney critic has somehow failed to get back to me on): How does your “system” tell me exactly how much of a check I should write to the mortgage company each month and on what date, exactly, will I pay off my mortgage?
Just for esses & giggles, I took up JoeTaxpayer’s challenge (I don’t have time or interest to read all the posts prior): The answer Joe, is 13.2 years and $113k less interest paid. So let’s see, I spend $3,500 now for a guaranteed savings of $113k – perhaps my 25 years of investment experience fails me but a 30% annual ROI seems decent.
But you forgot to ask a good question, Joe: What happens when the same $200/month discretionary person gets hit with a HELOC rate rise from 5% – what I used initially, even though it’s high – to 10% (a 100% rise in interest rates, coming courtesy of Obama). The answer: Payoff in 13.4 yrs and $109.4k interest saved. If you have something better, I’m all ears.
A 13.2 year payoff would require an equivalent monthly payment of $1831 vs the $1199 payment. My challenge uses $200 extra income. You claim MMA creates extra savings of $432 from the system itself. I call this innumeracy, when people are unable to see the obvious. Calvin would call you an idiot or a moron, not me.
You are concerned about payoff? You are wrong by over 6 years, yet you think you have an exact date. By all means, send me the analysis, I usually catch the entry error in seconds, a tough one, minutes.
If you do not understand that MMA has the potential to extract about $25/month tops “from the bank” you should not be selling it.
This is just amazing. Unbelievable.
I had a rabbit once named Calvin who thought I was an idiot and a moron. Thomas Kuhn would call MMA a paradigm-shift, when people change their basic assumptions within a prevailing theory.
I used the $200 discretionary income figure you requested but MMA does not simply add the $200 to the mortgage payment (in which case only a moron or an idiot would buy it). The MMA system is not what creates the savings; it’s what monitors it and suggests Heloc payments, based on each client’s capability, to the primary mortgage company. What creates the savings is the trading of closed-end mortgage interest for open-end Heloc interest.
I’m delighted to send the analysis if you provide an address. It will be amazing and unbelievable.
Dude!!
Whomever you are, if this guy doesn’t get your explaination then there surely would be a medication for his problem out there somewhere.
“What creates the savings is the trading of closed-end mortgage interest for open-end Heloc interest.”
Indeed. And short of doing one of those Jesus’ feeding the multitude things (i.e. miracles) you cannot HELOC $5000 of income to produce $432/mo in savings. You really don’t get that, do you.
I am at b-1 dot org (I own the domain, so just Joe before at symbol is fine.) That’s a hyphen not underscore.
Full disclosure: I accidentally input 5% (not 6% per JoeTax’s original request) as the mortgage to be paid off ($1,074 P&I/month). Before Calvin and JoeTax go off the deep end and find that “fraud,” I thought I’d mention it for the record. I also input a 5% Heloc rate which is high and then I ran it again at a 10% Heloc rate with the differences highlighted in my 11:59am post.
Full disclosure 2: MMA is not a “get out of debt” program (most of which in fact, ARE scams). MMA only works if people have positive monthly cash flow (and works better the more monthly cash flow they have).
Joe, when the clients I’ve had on MMA for two years look at their year-end mortgage statements and see the dramatic decline in Balance that the MMA software predicted, who is it that is performing the Biblical miracle? Their mortgage company, UFF, me? Is everyone in on UFF’s scam? I thought it was Microsoft that owned everything and everyone. If I understand your last comment, it’s just not possible – so where are the lawsuits and the attorneys general?
Analysis is coming over momentarily…
I suspect you’ll mistakenly enter the income as bi-weekly not semi monthly. That will “create” 8% more loaves of bread per year. Innocent, innumerate error. Fix it first. Ok?
Too soon for him to read my post above, the analysis came, and sure enough, the $2500 semi monthly income was entered as bi-weekly. Once he fixed that error, NJBlue wrote to me that he calculated a 20.8 year payoff, just a bit longer than the 13.2 originally claimed. I hoped he’d come back and report that here, as fast as I was to catch the error.
I wonder if the couple months difference between the sophisticated algorithms of MMA and my spreadsheet is still enough to justify the daily reporting to the software and the risk the HELOC brings. He didn’t send me the fixed analysis shett yet, so I’ll still wait to see if the $3500 fee was taken into account, maybe not.
I’ve noticed the change in tone from the latest UFF agents. Instead of posting their projections and telling us what the calculated discretionary income is, they simply assert that this is what the projected payoff period is and how much interest will be saved. No comparisons to anything else.
I could make the same bold-faced assertions with any of the do-it-yourself spreadsheets and guarantee that if you follow the spreadsheet, you will get the results. After all, math is math.
“I have been a financial planner for 25 years…
If we look at the $3,500 as an “investment” over a 16 year time horizon for a “return” (saving money is the same thing as earning money) of $106,000, we find – surely you and other critics can use the ROI calculator on Excel – a an annual rate of return of 23.76%. Tax-free.”
You are a HORRIBLE, ******HORRIBLE******* representative of real financial planners and a PERFECT example of why we give people like you the crap you deserve and call you frauds.
$3,500 does NOT save $106,000. THEIR DISCRETIONARY INCOME DOES.
23.76%????!!!! If you put in the actual added payments into your incorrect calculation to make the real one, you will find a savings of the mortgage rate, not 23.76%. End of story.
Financial planner my @ss. When people of other professions are having to correct your work, you are in the wrong field.
Typical MMA salesman….wrong numbers…fraudulent marketing.
Calvin – NJBlue (A policeman doing PF on the side?) wrote back to me admitting the bi-weekly/semimonthly error. I wonder how many agents make this mistake as the entry field is likely set to bi-weekly as default.
The analysis he sent to me and Tracy showed that mistake (clearly to me and Tracy, to agents, not so much) as well as $6500 in checking/savings. After all that, my (free) sheet beats MMA by the 9 months represented by the time value of $3500 over the 20 years. I can pretend to be smart, or I can say that 4th grade math will prove out any MMA analysis.
If people still want a $3500 Egg Timer (c) Calvin they can buy it, but they should understand its cost. In this analysis, it turns into $9287, ‘true cost.’ Let them present it using the truth not the crazy claims they have been. Jeez. ROI? Negative.
The silence from these once-loud UFirst agents is deafening. I don’t know how many of these smackdowns Joe and Tracy and L2G and others are going to have to administer before other UFirst agents stop trying to prove the impossible, but as with most smackdowns, they never fail to entertain.
Nicely done, everyone.
I appreciate the complement.
I can’t tell what led to this, but I suspect that allowing the agents to use $1000 of “discretionary” income helped obfuscate the truth. Insisting they offer numbers using a more realistic $200 helps show that (a) MMA lags DIY by 9 months and (b) that most agents can’t catch a huge error in their analysis.
For any agent who wishes, they can download my sheet and at least know that when the difference is 9 years (!) between us, well, that ain’t sophisticated algorithms, that’s a data entry error. Even when I trust that people like RTL have the best of intentions, the agents’ lack of even 4th grade math skills means they cannot catch that mistake. If nothing else, this raises new and troubling questions.
New advertising copy:
Using UFirst’s MMA software, you can cut 10 years off your mortgage. Doing it yourself would save you 9 more months, but for only $10,000 in real cost, this software serves as your personal egg timer, reminding you to pay your mortgage and juggle funds around, so the software looks busy.
I am thinking of offering a service where I call a subscriber, personally each month, and say “how much is in your checking account? Send it to your mortgage.” Only $25/month for the call.
Craig,
I’m not silent; I just did not have time to reply today but hope to tomorrow. Joe makes some good points; Tracy ended our debate without proving anything to me – just because one cannot figure out how something is done does not make it un-doable – and Calvin seems rather unstable. If I am wrong and UFF is the scam some (21 BBB disgruntled customers and a few bloggers) say it is, I will concede defeat on this site.
What I did have time to do, and given the level of vitriol directed toward UFF, was more carefully inspect my analysis input numbers: original mortgage = $200k @ 6%; 5% Heloc; $2,307 bi-weekly income and $1,000 in checking and savings; $200/month discretionary income to come up with a 13.6 year debt elimination period – not the 20.8 I mentioned in error, Joe – and an interest cost of $93,364 ($138,313 savings), net of all costs.
DIY, using Joe’s Excel sheet (and Bankrate.com to double-check) is $151,876 over 21 years. So MMA is $58,512 better than DIY plus the money customers earn over the 7.4 years of investing their old mortgage payment of $1,200 plus the $200 discretionary.
More tomorrow, as time allows. Toodles.
PS. Calvin, I KNOW the savings is from the increased money applied to principal and that MMA is not actually an investment; it’s a cost. I was likening it to an investment for perspective purposes. Please calm down so you can return to marketing the highly ethical financial planning concepts of “buying term and investing the difference,” Separately Managed Accounts, variable annuities and 529 Plans like “real” financial planners do.
quit lying and people will treat you with respect. you deserve to be called out for the liar you are, so expect it.
if you know the real cost is the real payments, say so. otherwise, you basically said every car 100% financed is free….since one can ignore the payments.
you are a financial joke and any money you’ve made from financially “advising” (read: conning) people need sto be returned.
“So MMA is $58,512 better than DIY”
the sad thing is you probably actually believe this. MMA, with it’s $3,500 anchor will always come out worse. Especially the non-optimized UFF version, which is sad, since MMA is their trademark.
??? NJB – You are withdrawing your admission that your number should be 20.8? What happened to that? I kept your email. You plan to send me the ‘new’ analysis?
I found an agent willing to send me an analysis, and the $200/mo resulted in 21.8 yrs payoff. She properly entered the $5000/mo income, why do you insist on bi-weekly? And why don’t any two agents match?
MMA can’t produce the result you so want to believe. If MMA did what it promised, correctly, it would save about $3000*6%/yr or about $15/mo. But since MMA cost is $3500, at best it will not quite pay for itself.
Joe, I entered bi-weekly because, according to the Bureau of Labor Statistics, 82.5% of Americans are paid either bi-weekly or weekly (sending copy to your e-mail). So 17.5% of the time (semi-monthly or monthly), the way you want to frame the argument is valid. Your analysis of DIY also includes a first month principal addition of $3,500 that improves your results. Except the prospective client does not have $3,500; he has $200 (and the ability to put $3,500 on the Heloc which is why my results indicated “net of all costs”) – I don’t call that innumeration; I just call it – as a now-unemployed Harvard grad used to – “fuzzy math.”
So, on the $200k, 6%, 30yr mortgage with $1,000 in Savings and Checking (I had $2k in Savings on my last analysis), earning 1% and a 5% Heloc, I come up with 13.7 years of payments and a total interest cost of $94,637. This includes paying off the Heloc and the $3,500. The blogger who ended our argument after failing to prove anything seems to erroneously think the mortgage balance gets transferred to the Heloc and likes your “money shuffle” phrase.
DIY without your $3,500 first month is 21 years and $151,876 interest paid. So (yes Calvin) MMA is $57,239 better than DIY, INCLUDING its “outrageous” $3,500 cost. Unless it is a total fraud which I’ll come to in a moment.
But since I am interested in improving net worth, I would be remiss to end the analysis there. The MMA client has 6.3 years of no mortgage payments (and $200/mo) to get to the time your DIY person is mortgage-free. If we invest/save that $1,399.10 at 2% (even a “not real” financial guy like me can achieve that I think), at year 21 the MMA client has no mortgage PLUS $113,477 while the DIYer has no mortgage and no extra money. So at year 21, the MMA is better than DIY by $113,477 net of all costs. [The "ROI" - or improvement to net worth on those numbers, Calvin, which actually probably double-counts the $3,500, is 14.23% and 18.02% respectively.]
It seems to me that you intellectuals keep saying that this can’t be done, yet you all realize the power of financial leverage. If I buy a $250k and put $100k down then sell it later for $350k, I have increased my cash by 100% even though the house appreciated by 40%. How is this possible?! More on next post…
NJB, don’t gloat just yet, your numbers are impossible. To go from 20.8 to 13.6 years, you have to add an extra $400 to the $200/month already being spent. The HELOC shuffle can’t do that. Engineers are taught to check their numbers and get a feel for them, so they don’t just blindly apply formulas and go with whatever comes out at the end of their slide rule or computer. I suggest you go back to Bankrate and verify my numbers. Then go and recheck yours.
To repeat what Jimmy just said,
$200K, 6% 30 yrs, $1199.10, 20.96 yrs = $1399.10 exactly the extra $200/mo, 13.6 years requires a payment of $1795.64, $596.54 more/mo or $396.54/mo more than the $200 we discussed. Does anyone with more than a handful of functioning brain cells think that anything can recover $4758 per year by shuffling one’s average checking balance which is never higher than $5000, and would average maybe $3000? Is that not obviously absurd?
I know Jim will need to moderate any link. Looking forward to this one posting here.
link
will take you to an Australian web site, their version of the SEC. They are now going after UFF-like companies and those making the same crazt claims.
The link shows one such lawsuit. It ends with ‘For consumers the key message is that the only way to pay off your loan sooner is by moving to a loan with a cheaper interest rate or by making extra repayments.’
Calvin, Jimmy, Craig, you been consulting with the ASIC? The above quote could have been any of us talking.
You gents seem to be discounting completely the fact that if MMA has the client write a $1,000 check from the HELOC to the mortgage, in that month, the client has just fast-forwarded 5 months of $200 additions. If the client writes that check the day before his income comes in and reduces the Heloc balance, he will have paid $0 in Heloc interest while eliminating mortgage interest. Helocs use Average Daily Balance interest; mortgages amortize interest. Btw, why aren’t you guys outraged that you make 10 years of mortgage payments on that 6%/$200k and still owe $167k on it (after paying $112k in interest)? It’s a mortgage that’s a rip-off, not the system to eliminate it.
MMA combines a number of things – leverage, ADB vs. amortize, cash-flow, blah, blah, blah (the “blah, blah, blah” is there for Calvin to jump on) – to achieve the results it does. It seems to me that because you guys are smart and have not figured out how the smart people at UFF combine all this, you are frustrated and suggest “it can’t be done; ipso-facto, MMA is a fraud.” What is a more likely scenario: The 50k, 75k, maybe 100k people who bought MMA included only 21 “smart” people (those who complained to BBB) and you guys OR you guys are missing something? Please consider one of my two challenges at the end of this unfortunately-long post.
There’s another system, BTW, that you can probably start ranting about as well called the Home Ownership Accelerator. I don’t use it even though it may be a bit better (at least theoretically) than MMA but it too takes advantage of ADB versus Amortization. I don’t want to be 100% variable loans (Heloc) in a rising-rate environment or I’d look at it more closely. Ordering loans by interest rate, as Calvin once suggested, is not sufficient because ADB loans are fairer and easier to pay off than amortizing loans.
I’m also sending to Joe a thought exercise since perhaps some of the MMA naysayers are mortgage brokers who like to keep rolling mortgages and pocketing commissions each time rates drop 50 basis points. Summary is this: Ethical Jim, the mortgage broker, rolls his client out of a 7%-30 at year 15 and (after pocketing a big commission) sends client to a 5.5%-30, ostensibly “to improve cash flow.” Client puts 100% of increased cash flow ($470/mo) toward principal on new mortgage – which clients NEVER do in reality – and we get this:
Re-fi customer paid off his house in 27 years at a total cost of $547,824. Had he stayed in the 7% mortgage and done nothing but pay the P&I, he’d be done in 30 years at a cost of $479,017. Ethical Jim the mortgage guy “helped” the client to the tune of -$68,807. And I am the dishonest crook for a $3,500 debt payoff system?!
Are you guys going to soon go after the “extended warranty” folks? I just bough a new washer (and I suspect, I paid Best Buy far more than they paid for it). They wanted to sell me a 5-year warranty (60%+ of which is commission); washers now last on average 8 years so the warranty is 100% unnecessary, unless of course – like all insurance – I need it. There are lots more extended warranties sold than MMAs so maybe we should blog about that. Or maybe we should blog about the evil Personal Trainer industry – paying someone (more than $3,500) to tell you to exercise more and eat less.
Anyway, I’ve expended about as much time as I’m able to on this. You guys have “proven” (to me anyway) nothing except that by using straight line numbers, ignoring the different ways debt service is calculated, eliminating timing of cash flows, ignoring amortized interest, etc., MMA cannot work. MMA sales figures would seem to suggest you’ve missed something and so here are my twin challenges:
1. Calvin once lamented that since he had no damages, he could not sue the evil empire that is UFF. So why not buy a MMA and then sue (sort of “putting your money where your mouth is”). Surely in court, your superior intellects will “prove” the fraud, gain an enormous windfall and help save the unenlightened masses from ne’er-do-well-MMA salespeople. Heck, I can put you in touch with a “fraud investigator” to assist…
2. Become an agent. It only costs $175 – ya pikers! – and would give you all the “inside dirt” and the diabolical “sales pitches” (warning: UFF does not share the proprietary algorithms and/or software code – “or factorial math” (that one’s for you Calvin!) – with agents. You could then attack-from-within, divide-and-conquer and all that stuff.
Surely there’s a business opportunity in here somewhere, too! Instead of spending the amount of time and brainpower you guys do blogging, you could join forces and become “MMA-Rescue Inc.” or something like that. I’ll try to respond to future comments on my analyses, Joe but I have to get back to spending time on my business (which is not MMA sales). As far as I can tell, you folks have not proven MMA cannot work but have forcefully and almost-persuasively stated your belief that it can’t. Which of course, is your right. As is not buying one. Best regards,
NJB82
“if the client writes that check the day before his income comes in and reduces the Heloc balance, he will have paid $0 in Heloc interest while eliminating mortgage interest.”
So what? If he wrote it the day he’s paid, one day’s interest on the $1000 is pennies either way. HELOC shuffle captures few pennies, not enough to pay itself off.
I agree that it’s not tough to find 100K stupid people. 21 out of that number doesn’t sound out of line.
My quiz – A mortgage of $191,812 7% has a payment of $1276.13, 180mo bal $141,977.07. @5.5% the payment due drops to $806.13, the $470 delta you suggested. When added back to the monthly payments, the mortgage now ends at month 156, instead of 180 mo left. He saved exactly 24 months. Thank you for the challenge, I hope I didn’t disappoint. Of course it drops. The refi saved this guy 2 years. You might want to check your numbers, how did you figure it takes longer?
Keep those numbers coming…..
“It seems to me that you intellectuals keep saying that this can’t be done, yet you all realize the power of financial leverage.”
i understand financial leverage. I can also do some pretty good estimating in my head which says your comparison between MMA and DIY is bogus.
This is the problem right here. You are working with a black box with no clue as to how it works. You take the analysis results like biblical scripture and can’t step back and think “does this make sense”?
You are taking a loan, adding principal to it ($3500), and saying with the same amount of money available each month, you save 6,3 years. The HELOC is 5% while the mortgaqe is 6%. Just rerun a standard mortgage at 5% and you will see what you gain if you were able to if you could “flex” the entire balance of the mortgage rather than just a few months at a time (what the MMA does).
Get a clue. We can show what the money movements for an optimal DIY, MMA, etc, etc, will give you while all you can do is incorrectly plug numbers into a black box you don’t understand and hoe and pray it’s right.
You are a joke and given what you are posting, you need to be in jail given it’s outright fraud.
Does hyperbole work in your other arguments? Given the outright fraud being perpetrated and for which I should be imprisoned:
1. Buy product (have standing and “damages”)
2. Contact Eric Holder with complaint
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
3. Sue everyone, become wealthy, quit job and set about life’s work of finally proving, once and for all, that you ARE the smartest person in the world.
“Does hyperbole work in your other arguments?”
Hyperbole? Try math. Seriously, try it for once. It’s not hard.
And I will not EVER give a dime to your parent company. And I could never get wealthy suing for even triple “actual” damages, a common cap on lawsuits. Plus there’s that whole thing about the net being scoured with info specifically showing I knew it was a fraud before I bought it.
Guess you don’t know jack about the law. Do you know anything?
Seriously. Anything?
NJB – Indeed I can show that with just the $200, I get 21 years, if I am permitted to add the $3500 fee to day one (where else would you suggest I add it?) I get 20.25 yrs.
Funny thing, $2307 is actually the correct bi-weekly number to enter. But you have another error on your analysis. I would bet my very soul against the devil’s gold that you have an error which you do not understand. Since you’ve sent me no PDF analysis, I am just reading number here that have no support. I do have a PDF from another agent, these exact number, 262 month payoff. At least one agent got it right. (you want a copy?)
Joe
Joe, Last time I sent an analysis for an off-line conversation, it got posted to a blog site so I’ll have to pass (although you strike me as having more class than that) on sending it but will be delighted to look at the other agent’s figures. Perhaps I made an error as I am trying to do this stuff between phone calls, e-mails and other things so by all means, shoot it over. I’ll send my (non-UFF) spreadsheets to you asap.
In my analysis, the $3500 gets added to the Heloc balance; the client in month one has $200 to attack debt, not $3500.
So, in trying to reconcile NJBlue82’s different results with the ones JoeT got, I decided to have a friend play around with the MMA Analysis to find what could be entered to change the payoff dates.
He tried two scenarios with everything exactly the same except the income ($2,500 semi-monthly vs. $2307.70 bi-weekly).
This is what was entered for each scenario:
Mortgage: $200,000 @ 6%, payment of $1,199.10, Fixed, Conventional, 360 remaining term.
HELOC: $15,000 limit @ 5%, current balance of $0, 120 month term, Variable, Conventional.
Checking: $1,000 @ 0%, average of $500, automatic low limit (set by MMA).
Savings: $1,000 @ 1%, average of $500, automatic low limit.
MMA Payment: $3,500 in full from HELOC.
Discretionary Income: $200 (per month).
The results were interesting to say the least. I encourage NJBlue82 to also enter the exact same data above and first enter $2,307.7 bi-weekly net income, then enter $2,500 semi-monthly net income and report here what he finds. Look carefully on the “Analysis” screen.
Everyone agrees these both result in $60,000 per year, correct? And $200 discretionary income means only $200 left at the end of the month, correct?
I will give NJB a chance to post, but will follow this post up with screen caps of the results for all to see should he choose not to.
Late, differences are
1. Heloc $50k limit, 180 months, vbl
2. ck/sv both $1,000, both at 1% (i.e. ING Direct 1.4%, Everbank 1.02%)
MMA works better for bi-weekly incomers than semi-monthly, as JoeTax noticed, but 82.5% of Americans get paid bi or weekly (weekly numbers work out about the same as bi-weekly does). I’m pretty sure MMA will work better for some customers than it will for others, as they would see from an analysis of their particular situation.
Is there an “a-ha!” here?
Did you enter both income options? As far as the MMA analysis is concerned, which I assume you are using, the different HELOC limits and checking savings rates don’t change the final “payoff” date much, if any at all. Look again and compare closely. There is a reason why your bi-weekly analysis and Joe’s semi-monthly differ, according to the MMA analysis, even though both have the same yearly and discretionary income. But many wouldn’t catch it.
L2G
Are you saying that MMA always assumes a 2-pay, biweekly month, (or 4-week, weekly month) giving it a “free” 2-pay kick every year? That extra 4615 works out to about 385 a month and explains the discrepancy we’re seeing.
Is there a way to turn that off? This is almost as bad as having MMA hijack debt repayments so it can keep using them after the debt is paid back.
Well, I was going to let NJBlue82 answer, but here are the actual screen shots of the analysis screen (prior to creating the pdf reports that you see elsewhere):
This link is the $2,500 semi-monthly income:
http://stashbox.org/569510/2500_SemiMonthly.png
This link is the $2,307.70 bi-weekly income:
http://stashbox.org/569514/2307_BiWeekly.png
And if you look at the “Cashflow Summary” at the bottom, you will see the difference between the two. JimmyDaGeek is correct. The MMA Analysis software computes monthly expenses by taking net income * 2 (semi-monthly AND bi-weekly) or * 4 for weekly, subtracts the user entered discretionary income, and any debt expenses (in this case only the mortgage). So, by default, the two scenarios that were compared have differing expenses even though they had the “same” discretionary income. “Feature” or “bug”, you decide.
The good thing is that there IS a checkbox to “Include extra checks to discretionary income” which can be turned off.
So, what are the values if $2,307.7 bi-weekly is entered but the extra checks are NOT used as discretionary? Years to Pay Off: 21.42
NJB82 was asleep at 11:13, Late, but I promise to take a look at your sheets if time allows this afternoon.
Alert!
Carrie Schwab Pomerantz, the lady who grew up billionaire-dirt-poor on the hardscrabble streets of San Mateo County as Chuck’s daughter, weighed in about paying off mortgages in 2008! If you’re not a Schwab client, you can get her sanitized, typical Wall-Street-compliance department-approved thoughts on creators dot com’s Business and Finance section.
No mention of MMA, good or evil, but I’m hoping she soon joins this blog…
And your point is? Have you compared the screen shots I posted with your analyses? Can you see that your $2,307 bi-weekly income and $200 discretionary was actually not an apples to apples comparison?
Many agents see the final results (ie Pay Off date or Interest saved) without realizing that the results they are comparing can have quite different assumptions. For example, in your bi-weekly run, the MMA assumed the client would have $3,216.30 of monthly expenses. In the semi-monthly run, the MMA assumes the client has $3,600.90 monthly expenses. Clearly, this is not an apples to apples comparison, even though both have “yearly incomes of $60K and monthly discretionary incomes of $200. The reason the bi-weekly pays off in 13.7 years is due to the fact that the former scenario has $384.60 more per month to pay down debt.
You said in a post on 7/14 @ 2:20PM, “MMA combines a number of things – leverage, ADB vs. amortize, cash-flow, blah, blah, blah (the “blah, blah, blah” is there for Calvin to jump on) – to achieve the results it does.”
Even with all the “blah, blah, blah” that the MMA program uses, the simple fact is that a person’s own discretionary income is really the thing that pays down mortgage principal. And if agents post ALL (and I mean all) the data entered into the MMA, it can be shown that anyone can beat it paying down principal on their own, without the -$3,500 handicap the MMA user has.
Late,
Your point about a changing monthly expense number seems excellent and I will review your screens when time allows. This, like JoeTax’s comments, advances the debate and I appreciate it. Back soon.
From the views I have, it was tough to even guess what MMA did with expenses when pay frequency changed. That’s at least trying to get to the bottom of the discrepancy. I hope so far it’s easy to agree that, given exactly that $60k/yr, the difference in the outcome would be close to zero when pay times change. The average monthly balance shouldn’t change at all, let alone enough to make a multi-year difference to the program.
We’ll wait for your update, I appreciate the kind words.
NJ – funny, everything she says, agents dispute. She mentions to take taxes into account, agents say you should not spend $1 to get back 25 cents.
Carrie talks about not walking away from Matched 401(k) contributions. I had an agent ‘explain’ that $1 matched in the 401(k) is $2, but in MMA, it saves you $5.
Paying off one’s mortgage is a separate decision from whether to allow yourself to be scammed out of $3500. I’d like mine paid a year before my child goes to college, but that’s just my plan, others can do what they wish.
JT – Not sure how diverting 401-k contribs to MMA turns $1 into $5 (I cannot take credit for other agents’ theories, only my own lies, misstatements, deceit, outright fraud and HORRIBLE, HORRIBLE financial planning skills).
On the other hand, given the market’s performance since the 2000 top, some people are negative on their 401s including the match. Carrie & chuck – a “discount” version of Wall St’s skimming operation – would probably point out that the market’s run from 03-08 got people “back to even.” Yet investors’ statements ($ not %) suggest otherwise! Innumeracy or duplicity?!
Thus, MMA is clearly the answer to all financial questions! (kidding!)
Simple, really, and actually true, 1.06^30 = 5.75. So at the early part of the mortgage, first couple years, a dollar into MMA will save $5 at the backend. This ignores the time value of the 401(k) over that same period, but focuses on the payoff cells and interest paid.
My 08 balance exceeds 03, but only due to deposits, matching, debt repayment. 08 ended at 903.25 vs 03 1111.92 (S&P) down nearly 19% closer to breakeven with dividends.
But, another point I make, over and over, is that you cannot compare 401(k) returns to the mortgage rate. The choice is between a safe savings (Gov bonds, CDs, money market) and the mortgage prepayment. $1 to 401(k) would be about 75 cents out of pocket. $2, if matched 100% (3/4 of companies still matching some amount).
Go get disabled, and that $2 comes out with no penalty, and little tax if taken out a bit year by year. Not you, NJ, but any agent who says to fund MMA payoff prior to grabbing that matching money has no place in any financial discussion.
Have you really read that much into it before you based your comment, or is it just jealousy that fueled your comment? It’s like you think you know more than others that have put it into practice! Are you so cocksure that the financial institutions have YOUR best interest in mind when they have you sign a 30 year loan that will seriously crimpt your lifestyle? Or is it just ignorange shpowing it’s face? Do osome research. Are the banks leting you have their money?? When do you expect to pay off your mortgage. I my eyes, they are not trustworthy. And THEY ARE BEING BAILED OUT WITH YOUR TAX MONEY!! Did you stupidly sign over this money when you cast yopur vote??? I maintain that people don’t know what they are in for. This trend is continuing because of ignorant people who speakbefore they learn!
Scary! When I read prattle like this, I don’t wonder why MMA has had some success. No one says not to pay off your mortgage. That is a personal choice – reduced worry vs. greater return. There is nothing sinister about a 30-year or 20-year mortgage. You would know if you understood how mortgage payments are calculated. We are simply saying that if you are financially disciplined, all you need to do to pay off your mortgage is write an extra check each month. And if you want to mimic MMA, just send all the spare cash in your checkbook each month to your bank. And keep a HELOC around for emergencies. You’ll need it because you won’t have any spare cash.
Yes, I’ve read enough, written well over 60 pages of my own findings. I am no more jealous on MMA than of Madoff’s Clients’ extraordinary returns. I’m just hopeful this scam won’t take 20 years to come to light, I’m not getting younger.
Uh, no, the bank is not my spiritual advisor, they have no personal interest in me, just a financial relationship. My mortgage really has nothing to do with this conversation, but it never crimped my lifestyle since we did not take on a mortgage that was more than we could afford. But again, tangent to this discussion.
Are you RTL back posting as anon? Your ranting style is remarkably similar, and your signal to noise ratio equally low. I suggest you remove the speck from you eyes and read this entire thread, and before you spew trash again, respond to the number challenges.
I don’t need to research further, as I’ve seen enough. Actually, the more I see from UFirst, the worse the program looks.
You see, it started as an expensive egg timer (c)Calvin, but then it became clear that (A) The HELOC shuffle is not properly implemented, the UFirst video betrays that failure and I posted on it, catching them in that lie and (B) the software itself doesn’t seem agent friendly enough to allow the shift from bi-weekly to semi-monthly pay, while holding monthly expenses and annual income fixed.
The rest of your drivel is meaningless, you might want to finish high school before you embarrass yourself further.
Joe,
As much as I’d like to take credit for the egg timer description, it was not mine. And neither was a better, far better comparison. The magic “electricity saver stick” that one uses to turn off the lights when they leave a room. The stick, when used properly, could save a user tens of thousands in electricity bills by letting the user turn of the lights and stop needlessly wasting costly energy. No one can beat the stick.
cal
NJBlue82,
Any comments yet? I’ve lost track of how many agents in the 740+ posts in the comments here(and whoknows how many on other various sites) have promised a review only to never be heard from again.
>>Your point about a changing monthly expense
>>number seems excellent and I will review
>>your screens when time allows. This, like
>>JoeTax’s comments, advances the debate and I
>>appreciate it. Back soon.
Guess our friendly neighborhood scammy agent, NJBlue has disappeared. My guess is that he, like others, found the errors and realized the numbers don’t work out in the MMA’s favor, and quit posting. They never seem to admit they are wrong.
The numbers never work out for the MMA. It’s a money loser….unless you are selling it.
In most cases, it’s also a money loser if you *are* selling it. It’s harder to feel empathy for the agents, but many of them have been duped as well.
agreed. but at least if you are selling it, you *can* come out ahead. buying, you cannot. note: to anyone reading it, i am not endorsing the prospect of selling it, just pointing out the only winner involved in the sale of the UFF product is the UFF and the agent, never the buyer.
Still here Calvin. Have not had time to reply to your 7/14 9:22pm post. I clearly know far less about the legal system than you – wow, yet another of your many areas of expertise! – but I do know these five words:
Straw buyer / class action suit.
Unless of course, you can’t muster $3,500 in advance of the certain windfall. I just hope your friends at the Post Office agree with your screaming about MMA so you don’t have to “take the next step” with them.
NJB, Are you referring to this posts:
http://www.sequenceinc.com/fraudfiles/2009/07/10/the-uff-money-merge-account-fraud/
and the fact that MMA software purposefully misrepresents their results for weekly and bi-weekly incomes, which constitutes fraud? Or the fact the UFF agents are too stupid to question the fact that you can’t have such dramatic differences in the results between a semi-monthly income and a bi-weekly income, even when the total monthly income is the same?
I’m not sure it does anything on purpose. Odds are, it’s just tough to enter it correctly.
I am more disturbed by the fact that most agents can’t tell there’s an error. (Yes, if they are flipping from one pay period to another they are stupid, but if they tried to enter bi-weekly and were given a bad result, I’ll blame the lack of user-friendliness on the system.) I wonder how many people are working off bad projections, as NJB did say that most of us are paid bi-weekly. (I’m actually paid paid bi-weakly, but that’s another story, and not a typo.)
NJ, I cannot buy the MMA software and win a lawsuit for two main reasons:
1) It is easily proven through my countless posts on the internet that I would “know this is a fraud in the first place”, therefore it would be my own fault for getting “scammed” and more importantly…..
2) I have no mortgage to apply the MMA software to. I paid off my mortgage using a faster method…..sending all my extra money right to the mortgage each month. Of course, the MMA does the same thing, they just charge you through the nose to do so.
When you realize the UFF software will never save more than the initial $3500 and the added interest, you’ll figure out your problem.
L2G, JT, JDG,
I have been considering your comments, doing further research and numbers crunching offline -as well as actually working for a living – and will cry “Uncle” tomorrow, conditionally (will explain that tomorrow).
NJB
Where have I seen this play out before? Oh yeah, every single effing time an agent actually crunches a number. Here’s how it will go:
You’ll admit that the results of a simple DIY approach are close to the MMA, and may beat the MMA in some situations (actually, it beats a free MMA for any scenario where the HELOC rate isn’t unrealistically low). You may admit that the MMA loses quite badly once the $3500 cost is factored in. Your “condition” will be that the DIY approach doesn’t factor in some sort of human element that the MMA does, as if spending $3500 for software will suddenly cause people to save their money.
There are many simple counter arguments to that one. My favourite is, if you charged them $10,000 your clients would have 3X the motivation to save! Others include the fact that the software is time-consuming, the $3500 wasted is hardly a good first step on a path toward saving, etc.
Let’s see if my prophesy comes to pass…
Uh, no.
Gentlemen (and others):
I had intended to “face the music” this evening with a blog post but my 16 month-old daughter, and her exhausted mother, had other plans. I want to be respectful of the time you folks have put into the educational process and regret that I must put my post off for another night. I have to go out later, to a Shaklee meeting (just kidding), and will be back on tomorrow sometime.
Have a nice night,
NJB82
credit where credit is due, that Shaklee line made me laugh.
Thanks, maybe you’re not as bad as your rants make you out to be, after all!
Uncle! I have seen the light.
As I said I would do, I am publicly accepting defeat on the MMA vs. DIY issue. On 7/10, I entered the Bargaineering site with the disclaimer that I was not a “Kool-Aid” drinker. That was something of an understatement as I have always been uncomfortable with the MMA price. I have sold a grand total of ONE (a family who asked me for a solution) and I offered it to the family I mentioned on 7/10 that needs to borrow to complete their second home. Based upon the input from you folks, my own additional research and some serious numbers crunching, I will also lead the second family to Debt Snowball and some good Excel calculators on vertex22 dot com. I actually picked the MMA fight – and lost – on 7/10 to draw out the objections I might not have considered and you guys did a really good job illuminating them! For that, I thank you. I could have done without the invective, notably absent from L2G and JoeTax (and for the most part Jimmy) whom I consider the best bloggers on this subject.
I know one of you will ask, so I’ll answer in advance: No, I’m not going to refund the purchase price or my huge, $450 commission to my lone MMA customer. The reason being, I called them on 7/21 and they like MMA, as is their right and I suspect, as many customer do. Their income is $390k and they identified $2,108 – I don’t know how people as busy and disorganized as they came up with the $8 part – as monthly discretionary income. He is in fact, paid semi-monthly so I did not have the dreaded “expense change glitch” situation to worry about. I told him that he could have done debt reduction himself, without software. His response may be instructive:
He said – and this is almost verbatim – “so what? I asked for a solution and you offered me one. My wife loves it. I pay $5,000 a year to have my lawn and garden taken care of and $8,000 to the same company at my office. I pay $75 a week for my wife’s nails, my CPA gets about $15,000 and my UBS guy gets $5,000 or so.”
And that leads me to the conditional part of my “Uncle:”
I am personally not going to offer MMA, and only had on the two occasions I referenced anyway, because I share your opinion that it is too expensive given its marginal utility. I do admit that a person can pay down debt themselves for far less money and perhaps, more easily than spending 20 minutes a month entering data into MMA. I disagree with you folks that MMA is a scam or a fraud. I think it is an expensive, good-looking way to eliminate debt; it works. It may not work to your liking but it will pay down people’s debts. Does the $3,500 keep people disciplined? No more than the $900 dust-laden treadmill in my basement has kept me disciplined. So it’s expensive and not necessarily as effective as DIY – so what?
On Wednesday, I paid $9.50 to have my car washed only reasonably well. I then gave $2 to the two shmoes who barely dried it. When I wash the car myself, it’s spotless and looks brand new; few people clean their cars as well as me. So unlike the refrigerator/icebox MMA metaphor that you guys trash, I KNEW the car wash was going to do an inferior job for a ridiculous price ($11.50 for nine minutes = $77/hour (please check my math on that JoeTax!). And I paid it anyway because I wanted the car moderately clean. My MMA client bought it because he likes it. Some people buy S65 AMG Mercedes for $198,000 instead of an S550 for $89,000: The S65 is surely no better-built and it only goes 0-60 1.2 seconds faster (with the same electonically-limited 155mph top speed). Should Mercedes be shut down for offering a car that provides 22% more value for over double the price? Of course not – that’s capitalism. Some people LIKE the S65 and they buy it.
As to the example in JT’s original challenge, I don’t think a $60k net income family with only $200 leftover would/should have a $200k mortgage and if I were to counsel them, I’d say something like, “DON’T buy MMA. In fact, don’t buy ANYTHING – you’re one or two paychecks from foreclosure as is! I do think U-1st ought to set minimum income and discretionary standards so agents cannot sell it to inappropriate prospects.
I would like to point out a comment that stuck with me, from L2G. A pro-MMA person blogged about MMA tracking and optimizing the payment for numerous debts and how DIY would be harder (probably an invalid assumption). L2G pointed out that if MMA cannot beat DIY for one debt (one mortgage), it probably should not be trusted to pay many. I confess to being enamored originally with the multiple-debt, frequency of income/cash flow thing. Yours was a good point, L2G and concise.
As for me, I never intended to be an MMA user. I have a mortgage because I want a mortgage. Home equity, as most of you know, earns 0% and can be – as we’ve seen with Helocs getting canceled – completely illiquid. And paying back cheaper dollars in an (the coming Government-induced) inflationary environment makes sense. I have 100% liquid funds, in an amount in excess of my mortgage balance, growing at an IRR of about 3% that will come out tax-free and I have no other debt because if I don’t feel comfortable writing a check for something, I don’t buy it. For some, not me, paying off a mortgage might make sense. So I’m a convert to your way of thinking: You guys win.
But while I will no longer offer MMA as a debt solution, I will neither join your crusade against it. I am a capitalist and if someone hears an honest MMA pitch/Mercedes pitch/absurdly-computerized LG washing machine pitch/etc. and likes it, it’s not unethical for the salesman to sell it. Chevrolet salesman are not required to tell people that Honda makes better cars for the same price.
Next, a critique of the critical…
Well, I was clearly wrong in my prediction. You did not try to defend the “self-discipline” claim of the MMA. To find this level of admission from a (former?) UFirst agent is rare indeed. Thank you for your honesty in comparing approaches.
As you are clearly capable of making the comparison, I’m curious why you did not do so sooner? Any google search for anything MMA-related turns up as many objections as it does sales pitches. Nothing twigged back then?
Also, you are still clinging to the “marginal value” claim, and while it’s the weakest claim used by UFirst agents, it’s one I still object to. I know, you’re shocked.
But seriously, comparing the value of an S65 to the value of the MMA? The S65 is claimed to be better than the S550, and it is, if only slightly in tangible areas (though Jeremy Clarkson would disagree with you). Where is the analogy to the MMA? Compare it to a genuine offering like Quicken or MS Money. The MMA isn’t better than either of those offerings. The MMA doesn’t have half the functionality, and as you’ve seen, can’t retire a debt faster. It’s not a case of paying for 2 S550s and getting one S65. It’s a case of paying for 35 S550s and getting a Lada. That’s deceit.
Dear NJB.
I truly apologize for any insults. I get frustrated when posters keep parroting what they have been taught without being able to prove anything they say beyond the explanations they learned. They have been coached to “drink the koolaid” so as to be more effective.
Contrary to others, I believe, because most people are financially undisciplined and innumerate, that MMA-like software is a solution for people that insist on having a babysitter remind them to stop spending money and to pay down their mortgage. I met people like that, that don’t want to think about what they have to do, except to be told do it. But that is only as a last resort, like bariatric bypass surgery for obese people.
I advocate do-it-yourself because what UFF agent is going to sit down with people and tell them that all they have to do is send money to the bank every month, or explain to them how to use the debt snowball so they can become debt-free and cash-rich on their own? Unless a UFF agent is a fee-only financial planner, who sells advice rather than products, and knows how to think for themselves, this will not happen.
No problem, Jimmy. Admire your passion but please see my new post for a general commentary on bloggers (not you specifically). Best, NJB
This is the email reply that I received from the UFF sales rep after I informed him I was declining enrollment.
I appreciate the email you sent, but hopefully you’re not basing your decision on that article. The guy that wrote that article obviously know’s nothing about our program. You know, there’s always going to be Nah-sayers about any product and it seems that the Internet has become the new “Bathroom Wall”. But every blog forum I’ve read online, the people saying negative things about UFirst haven’t really given it an honest look. But it’s always the same, about every third or fourth entry is from someone that is actually on the product and saying how great it really is.
I’ve told you from day one that this thing isn’t magic. There is no magic money that that mysteriously makes your mortgage balance drop. The only way to pay down mortgage principle is to send in extra money. The problem that the guy in that email doesn’t seem to realize is that in REAL LIFE… people just don’t do it. I receive a monthly mortgage newsletter that stated a few months back that 92% of all mortgages never receive $1 extra towards principle than is scheduled. The Money Merge Account and some of the other programs aren’t doing anything “magical”, but they’re getting people on a track that they will actually follow. It shows them exactly what to do, and when to do it. Could someone do it on their own??? Probably so, but sending in extra money to their mortgage is nothing new and how many people have been doing now?
But the fact is, the product works. There is a ton of financial creditability. Look at the articles in BrokerBanker Magazine, Mortgage Planner Magazine, Personal Real Estate Investor, the NBC News clip… hopefully your brother in law has had a chance to check those out. Edward Griffin (the author of “Creature from Jeckle Island”) is a huge supporter of UFirst. He is looked at as one of the most financially savy individuals in our country. I think I would trust the opinion of Ernst and Young before the guy in that link you sent me.
Here’s the thing, finances are about like religion, in that everyone has their own opinion of what’s best and everyone else is wrong! I’m not saying that UFirst is the only way to pay down a mortgage and get people on track financially, but it really is helping tens of thousands of people become debt free. I have personally put people on the program in past years that have complete paid off their mortgage. How can we tell those people that this thing doesn’t work???
I guess the question you really have to ask yourself is… do you think you can do better on your own than what the MMA program can do for you. If you think you can, then you’re right in taking a pass on this, but if you’re truly honest with yourself, I think you’d agree that this program will save you a ton more than you can do on your own.
Hope this makes you think a little more before making a decision on this. Having all your debt paid off in less than 10 years will be pretty hard to beat.
Sorry for the long email, but I look forward to your response.
John, there’s a lot there, but much of it is the same rhetoric we’ve addressed here dozens of times. The magazines are promotional, and the articles, subsidized. They are cover to cover ads, in other words. The one author he names is a guy I hadn’t heard of till UFirst started mentioning him, and I am an avid finance reader.
Finances are nothing like religion. I can sit with you, show you the numbers and unless you deny my starting premise, that 1+1=2, you will understand and agree with my every step. It’s how math is taught. You think you’ll ever say “Well, Joe you claim that $1 over 12 or so years at 6% (rule of 72) will double, and my Priest tell me it’s really 6 years, so we’re through here”?
He saw that 92% in a ‘newsletter’ so it must be true, right? Please, along with your August mortgage payment send an extra $10 toward principal. This will immediately put you in the other 8% who choose to prepay. Next month, take the $3500 you would have had stolen from you, and if (a) you have no credit card debt, (b) you are comfortable with your emergency fund, and (c) you are already depositing a fair amount into your 401(k) or retirement account, at least to get the match, if any, then send the $3500 to the mortgage, and do the math (see my spreadsheet, linked from my name above) to see how many months you just saved off the back end. My sheet offers a double your money back guarantee for your life (not just 30 days or the mortgage life). Can MMA offer that? I think not.
(The sheet is free, of course, no email or signup, or anything, just grab it).
Have you gotten an ‘analysis’ from this guy? Funny how it’s a 10 year payoff, just like their shady examples all over the web.
John,
Thank you for that post. Previous posts have addressed the lies regarding these vanity magazines and the E&Y award. I looked up Edward Griffin. If your UFF agent quotes him, run, unless you buy into this person’s POV. I didn’t spend much time reading everything, but Griffin rants about the Federal Reserve, which is a completely different discussion. Here is a link to Griffin’s statement written 2 years ago: http://www.thesolomonprinciple.org/docs/pdf/MMA-GEdwardGriffinArticle.pdf. What he says about finance no longer holds true, and he is talking from ignorance regarding the effectiveness of a HELOC. As we have posted over and over, the $3500 MMA costs destroys any advantage it might bring vs. doing it yourself.
NJB – you don’t need to help with the crusade. If all agents were as open minded as you, there would be none. There are overpriced everythings out there, but few would get this group going as MMA does. I’d not speak for the others, but for me it’s the combination of (a) innumerate people selling a quasi-financial product, (b) the outrageous claims made by those agents, (c) the insane comparisons.
If you want to know who makes me crazy, look at the rantings of “Real Truth in Lending” and the now canceled Jubilee (who posted some crazy claims, clearly having no idea how mortgage interest is calculated.)
You know, the 60K income $200K mortgage is not my example, it’s what UFirst has loaded on all their videos and written examples. I find that ratio to be less out of line than the claim that this example couple has $1000 extra every month to put toward their mortgage.
Last, I’ve had multiple agents respond to my matched 401(k) question telling me the money is better put toward the mortgage (I am repeating myself, no?) than the 401(k). This is disturbing for 2 reasons, agents are under the disclaimer that they are not financial advisers, and their advice is wrong, as you agree.
You are not typical, and not stupid. Next time I drive through Jersey, I’ll buy you a beer.
Joe
It is I who will buy, JT, for it is I who received the education. When you’re headed this way, shoot me an e-mail. Try not to hit one our corrupt politicians on the way; it’ll dent your car.
Great information site. Having been in the mortgage business as an originator for most of the last 12 years, I am now working on loan mod and loss mit files with a attorney I have know and trusted for years. I have been approached with the mma program and the cost is one thing that has slowed any real interest of mine. I have also looked at and read about Harj Gil and his program, which isn’t free but does cost less while still requiring a heloc to make it work. What do you or your readers think about the older existent program of a bi-weekly mortgage acceleration? I am considering this as a less expensive, at least with much less upfront costs to the buyer, as a tool to present to my loan mod clients who can turn their mortgages around.
Terr, if you truly know mortgages, then you know that there should be no upfront costs to set up a bi-weekly mortgage program. Why? Because this is easily mimicked by a client paying 1/12 of his monthly mortgage payment as extra principal. In fact, it should work out a little better, because the loan balance will be reduced each month, instead of having the extra principal sit in a bank’s escrow account for most of the year.
And if you really want to help your clients, teach them how to create and read an amortization table so they can motivate themselves to pay down their mortgage without having to pay for any software or program.
Terr – if the client can afford it, why not just put them into a 15 or 20 yr fixed?
I had a 30 yr mort as the 20 seemed tight, but 5 yrs later, rates dropped and I refied (paying down some principal, too) to a 20. Rates fell further and the last refi was to a 15, with payments lower than the original 30yr mortgage. Teach them they can make extra payments, $20, $100, $500, whatever they have beyond normal emergency fund. Prepaying costs nothing. And no software needed at all.
Dear No-MMA Crusaders,
At the risk of beating a dead horse, my “uncle” post ended with the line, “Next a critique of the critical.” I’d like to explain that, now that I have a few moments.
Some of you guys come off as kinda rage-filled and maybe it’s that you’re a bit burned out, given that you have the same MMA debates over and over. I bounced around some other sites and noticed that a few of you are blogging and crunching numbers on several sites! And perhaps for limited audiences. In the month I posted for instance, you debated me, TRTiL, Tom, Bill, Chris and Anon – six people! Maybe a lot of other people tuned in, did not post and were educated but that’s suspect. You have put in a lot of work and I believe your intentions are noble but guys – for the crankiest among you anyway – take a break! Perhaps you could blog in shifts, say Jimmy the first week, Calvin the second, Late the third, etc. It only takes one of you, not five! This would free the others up to (smell the roses and) tilt at bigger windmills. The United States may indeed fail one day – it seems to me to be headed that way – but it will not be because a bunch of people overpaid for mortgage elimination.
Altruism – good. Selective outrage – a bit less good. As a guy who owns the company and signs the paychecks, it occurs to me that unless each of you prolific MMA bloggers is self-employed or blogging exclusively from home after-hours, you’re stealing from your employer during the workday when you are blogging or reviewing MMA analyses. If you earn $100k per year, in only seven hours, you’ve swiped $3,500 worth of employment time from your boss. MMA might not work as well as DIY and it might be a bad value – like ten million other American products! – but selling an overpriced product for as much as the market will bear is part of capitalism; blogging on company time is theft. So for some of you, it may make sense to ratchet down the righteous indignation a bit.
The posting on public blog sites of U-1st agent names and rep numbers and in some cases, their uplines and downlines who have not picked a fight and may not even be interested in selling MMA anymore, should end. Not only is the act of “outing” agents classless, it smacks of the 3rd grade, tattle-tale who is still not getting enough attention. It demeans the good anti-MMA arguments that you guys are fully capable of winning on the merits. The reason I post anonymously is that I have no idea whether one of you guys – or some deranged reader – goes off the deep end and shoots me just because I offered two MMAs. Debunking the MMA sales pitch and calling agents out on misstatements and misconceptions, fair game. But when you accuse all agents of being crooks (and some surely are) and then name them, you’re setting up a potentially tragic situation. If I’d sold 100 MMAs before I came to Bargaineering, do my kids really deserve to be without a father because I was shot?! Gosh guys, UFF agents (but not me) are selling an overpriced product; not raping schoolchildren.
Along the same line, obtaining (or receiving) internal, proprietary company documents, if not outright theft, is pretty unseemly dontchathink? I find it ironic that the internal U-First master agent list is available on a high-minded website devoted to exposing scams and frauds.
In closing, it has been enlightening – and at times fun! – engaging you guys and cutting through the vituperation, enlightening. I appreciate the work you’ve put into your analyses and your dedication to informing the people who log on that there are other alternatives. My two cents – and worth both pennies! – is that some of you ought to tone it down a bit. And maybe take break from the No-MMA crusade at times. Best,
NJB
“If you earn $100k per year, in only seven hours, you’ve swiped $3,500 worth of employment time from your boss.”
Or $350 if you apply the math correctly.
“but selling an overpriced product for as much as the market will bear is part of capitalism;”
We don’t object to that, we object to the false advertising the UFF agents use. That is theft.
“blogging on company time is theft.”
My company, specifically, my boss, actually knows what I do. As long as he’s ok with it, I’m ok with it. I get a lot done, and have lots of “5 minute” waits while the computers crunch numbers. It’s not theft if it’s agreed upon beforehand. False advertising is always theft.
As for outing agents, I think you will find a lot of it is done to expose shills….those acting as “independent” supporters. As for someone shooting you, I can probably guarantee us anti-MMAers have received more threats than any UFF agent.
While I admire your crying “uncle” and admitting mistakes, it would appear you have missed the absolute most important problem with your past “transgressions.” It wasn’t the overpriced nature of your product, it was your words advertising the product were false. Charging too much for a piece of software is not problematic in and of itself. Doing so while making false claims is problematic, and, perhaps, illegal. I’m guessing you truly didn’t know any better, but that will not be the case.
I have dealt with literally 100’s of agents to this point. None could do all of the following:
1. Properly explain the system.
2. Tell the truth.
3. Do the math.
Some could do one or two of those, but not all three. That shows a systematic problem of the company, not one or two bad apples. And yes, we are getting breaks these days, as the UFF’s steam seems to have run out.
Doh! Good reply, Calvin. I really need to start doing my MMA math prior to 1am…
Is the “false claim” the performance overstatement that MMA makes when a rep inputs bi-weekly income instead of semi-monthly? If so, I totally agree with you and I am highly suspicious of whether this is a software “glitch” or an intentional sleight-of-hand. I don’t think I made any other false claims however, in my conversations with the two folks to whom I spoke about MMA.
And while I agree that MMA reps might be angry at the Anti-MMA Brigade, none can justifiably claim that any of you are dishonest in your disdain. Portraying MMA reps (some/most of whom are unaware of the glitch or who like me, have already been shown the light) as crooks to customers who paid 35-bones is a potential nightmare.
More troubling to me than expensive personal finance software is the fact that UFF is now trying to convert its MLM salesforce into an insurance agency. I attended one of the Kool-Aid meetings, saw my “fellow reps” and all I can say is: Yikes!
You’re not as bad a guy as some of your “passionate”
posts at times have made you seem. If you carpool into New Joisey with JT, I’ll buy both of you a couple pops. Best, NJB
I have no doubt I can come across as a “bad guy” to people sitting on the other side of the fence. I’m passionate about financial literacy in this country because it’s killing us, and I’m passionate about this product because they lied to my friend and tried to steal her money…..
“You’ll payoff your house 10 years early without an extra cent out of your pocket.”
That’s what they told her.
This goes WAY beyond a “software glitch” or “biweekly vs semimonthly.” We have agents talking about how this method is optimized…it isn’t. Some say it’s used by NASA, NSA, Harvard B-School, etc, etc. Not even close. Simply put, the UFF puts forth material that steps as far across the line of truth without actually putting their foot down, and the agents, mostly idiots, take it all the further.
“No changes in cash flow.” Couldn’t be more wrong.
“No changes in lifestlye.” Paying an extra $1000+ each and every month is no change? Do they think people are just throwing their extra cash each month out the window?
“The bank pays for the software….and your house.” Hello, attorney general, I’d like to report some fraud.
Then of course, there are the numbers. While yours were wrong, they pale in comparisons to some of the numbers other agents have put out there. There’s the lady that called Dave Ramsey during his show and tried to convince him that a 6% mortgage rate is really a 115% rate while a 6% HELOC was really close to zero. It’s a joke. Read enough and you will see why some of us call the agents what we do.
UFF agents are the epitome of the cult, kool aid drinkers, etc.
HI Sandy,
I am sorry you had a bad experience with this system. I am curious, what is the issue you are having or did an agent not qualify you right for it? I have to tell you , I have not seen hardly any clients on blogs saying they are not happy with it or it is not working for them, but a lot of competition or people that just like to talk to make themselves look good and like an advisor but are just opinions based on not being on the system themselves. I do not have 1 client that is complaining or not happy with what they are saving …out of over 50 clients on it for the last year or more so why is that I wonder to myself. Because it works very well and they are saving tons of money and years off their debt and mortgage. I can only go by the proof of my client’s testimonies , not the internet junk that is written about the product. The proof is there but i do know some people of other agents who just were not qualified correctly to make sure they would benefit from it and also were not trained properly on it so that is when people are not happy. What is your issue and why did it not work for you? The other reason people don’t like it is that they don’t use it or they don’t follow it so of course it won’t work for them or they lose their job……..that is not the company’s fault. I hope you get your money back if it is for a good reason, but if its on your part it did not work, then you don’t need your money back.
The proof is there….that the MMA is no more effective at paying off one’s mortgage versus just paying your extra money to your debt each month. In fact, it’s pretty much the same thing, but without the smoke and mirrors middleman loan. But that $3500 anchor kills any savings it could hope to create.
Most people are happy with it because they weren’t told they could do the same thing for free and outperform the MMA by $5k, $10k, $20k, or more, depending on their situation.
The MMA never comes out ahead….and it’s been mathematically proven so many times it’s pathetic people still fall for your BS.
You are really not getting it at all are you. I am in mortgage and I have the mortgage software to run my client’s scenarios with doing exactly what you said, paying extra payments on their own every month. I always do that with most of the potential clients that come to me and almost everytime, the MMA way out performs the “pay extra payments to my mortgage” scenario, both in much more interest saved and years to pay off so you are not stating the truth here at all and I prove it everyday to myself and my clients. Obviously you don’t understand the concept or how it really works at all. The system calculates strategic funds transfers when needed and to the exact amount …………not making the client pay extra to their mortgage every month. The proof is there with all the clients and they also have their bank print out an amortization schedule at the beginning of using the system and then months later and it shows exactly how many years they have taken off thier mortgage payoff and exactly how much interest they have saved with the MMA and then we match that with the scenario if they paid extra to their mortgage every single month and it does not come close in most cases. There are some cases where it is better for them to do that and it is almost the same, but most clients, about 90%, it is not the case at all.
I don’t think you sound like a mortgage broker or loan officer so you would not understand this at all and you would not know how to prove it works either by using mortgage software and doing the correct calculations so unless you do that you are pretty much clueless. math is math.
TRTiL,
If you can’t make an apples-to-apples comparison between an MMA analysis and a simple accelerated debt repayment plan, using the same debts, income and expenses, then you are incompetent.
The analysis has been done to death. All other things being equal, the MMA will slow debt repayment by about $3500 plus interest, over the life of the mortgage.
You can try to confuse the matter all you want, but the word is out, and monthly MMA sales are down 80% since the beginning of 2009.
Go find your next MLM scam. This one is all but done.
Craig
TRTiL, so nice to see your run-on paragraphs, making the same discredited claims with no proof again. There are a number of online storage sites where you could upload copies/pdfs of your reports and easily prove your statements.
The so-called rocket scientists that wrote this program also weren’t mortgage brokers. So either they didn’t know what they were doing or it doesn’t make a difference if math is math.
Can you create an amortization table and show us how you did it?
I am sorry you dont see the proof or listen to reason and just start saying things you don’t know anything about. It sounds like you are a very upset ex agent because you seem to know way too much about personal names in the company and certain things you say so i would not trust your words or judgement or listen to someone like you at all about anything this important in people’s lives. By your words below it is clear to me that you don’t know what you are talking about and have no proof. I do have the proof and the clients getting out of debt and that is all that counts. Sales are down because of the economy not because it does not work………..hello??? Financial crisis that affects people’s jobs and income and FEAR. Of course all sales are down in the nation on most products and services and companies going BK all over America so you are very lost. If it were a scam trust me, with a price like $3500, there would be thousands of complaints from all states and in Canada and the Consumer Affairs Dept would have it on recored and attorney general would be investigating them ,……….but go check it out, nothing like that is going on, no complaints with them at all or those agencies. So I am done trying to make you see reality. Have a nice day!
I don’t see your proof because it doesn’t exist. MMA CANNOT beat **FULL** prepayments because of it’s $3500 anchor. That’s been proven.
Put your money where you mouth is….
$200k, 6%, 30 year fixed rate mortgage…payment due on the 1st of each month
$5k *monthly* income after taxes, paid on the last of each month…
$1k expenses excluding mortgage payment, due the 25th of each month (paid by credit card).
$5k in the bank to start with, 3% checking account….
$50k HELOC, 6.5%, $0 balance to start with
You use MMA, I use checkbook.
I’ll happily put $10k in escrow, matched by your $10k, whoever pays off first takes all $20k minus escrow fee. **ALL** money movements have to be shown, we can verify each other’s math. (uff agent doing math…..
)
Now for the deafening sound of crickets….
crickets, baby……crickets!
Just another wall of text from TRTiL. Numbers, please. Start with Calvin’s challenge. Until you do that, you’re just another lying UFirst agent with a love of, but not an aptitude for, words.
RTL,
Your recent comments have managed to “get the band back togetha” as they might say in England. You have anti-MMA stalwarts Calvin, Craig, Jimmy and now JoeTax comin’ atcha – that’s basically the Anti-MMA Dream Team (L2G may be busy at the moment)!
My money is on them for the challenges. If you run a simple $1,000/month addition on a Vertex42 dot com spreadsheet against MMA with monthly or even semi-monthly pay frequency, you will see that MMA does slightly worse. There is a (fortuitous to UFF) glitch in the analysis software that makes Bi-weekly and Weekly look better b/c it reduces monthly expenses and applies the gain to debt reduction. Monthly expenses in the real world, do not change based upon pay frequency.
I picked a fight against the Dream Team to prove to myself that MMA worked (I’m an agent). Doh! It got bloody and I’m now on their side: If you’re saying that MMA helps pay off mortgages faster than doing nothing; you’re right. If you’re saying MMA works better than DIY, you’re wrong.
NJBlue82,
Is there really a glitch in the analysis software or is it a failure on agents’ parts to enter the income correctly? I’ve seen dozens, maybe over a hundred analysis reports and it seemed a common problem was the agent was incorrectly putting in the income. I’m not saying you were doing it wrong, I’m trying to find out if there was an actual error in their analysis software or not.
cal
Calvin – going into the software, I find that the entry is easily done wrong and tough to correct unless you wipe it out and start from the beginning. When done correctly, MMA will only lag do it yourself by a few months, only if you ignore the $3500 fee.
When MMA beats DIY by years, it’s obvious the agent has entered the numbers wrong. Well obvious to you you or me, just not the agent.
Calvin,
I input data a few times and the MMA results are valid for monthly and semi-monthly (and about what one could do if one sent the discretionary money to their mortgage company).
It’s when an agent inputs bi-weekly or weekly pay periods that things get a little screwy: MMA’s analysis screens default a reduction in the expenses and if I recall, does so even if the agent answers the “do you want the extra paychecks to go toward debt elimination?” box No.
Clearly, a family’s monthly expenses are what they are, regardless of how frequently their income arrives. In my opinion – and I have not run an analysis since I was soundly defeatedly in our July arguments – MMA’s performance is overstated for bi-weekly and weekly pay cycle families. Fortuitous glitch (for UFF) or just a glitch? Not sure about that one. Take care,
NJB
RTL – you’re back?
Going to answer the challenge that scared you off before? Or are you just here to practice your run-on unparagraphed rants?
What part of “My free for the downloading spreadsheet beats MMA” shall I explain for you to better understand? Show me your numbers, I’ll show you mine. Or do you plan to run away and hide another month?
By the way, why not answer this – How many people who net $5000/mo actually have an extra $1000 month in and month out? Of those, how many are still in the trouble MMA claims to solve? What an odd combination, if you think about it.
Hi guys,
I’m actually doing the MMA. I only have about $75 left at the end of each month so I couldn’t save enough each year to make an extra payment. I put the $3,500 for the program on my Heloc to get started. So far I’ve paid off $13,000 of principle on my mortgage and my Heloc Interest costs are only about $11 per month. I can afford that expense. My 14 year mortgage, $8,500 of other loans and the cost of the program will be paid off in 8.5 years. I can see the progress on my bank statements. The MMA works.
Well, Brian, you don’t have to make a full month’s payment, just a bit of extra principal, the $75 would have done nicely.
I’m happy that you’re so happy.
I just wish you were happy and $3500 richer by ‘not’ borrowing that $3500 in the first place. You could have used the HELOC to pay off the other higher interest debt and send the $75 to the HELOC until it was paid, then send it to the mortgage each month, but I know, that’s too easy.
Hi Joe,
Thank you for your very civil reponse. I know you feel strongly about what you believe so I appreciate your polite rejoinder. I think I understand your plan but if I sent the $3,500 towards mortgage principle and then the $75 per month to mortgage principle as you suggest, that would give me $4,400 towards principle the first year and then roughly $1,000 per year towards paying off my principle. That would take me six years to pay off $10,000 of principle. Using MMA I paid off that much in my first two months. If my financial situation stays the same that means I will only be paying $11 per month for 102 months, a total of $1,122 in Heloc interest to be rid of my whole debt. The mortgage interest cancelled by that $1,122 is a little more than $25,000. Your suggestion of early pay off is good but the MMA has accelerated my payoff in a way that is far more helpful to my financial long term health. Plus if I invest my mortgage payment at 1% after my mortgage is paid off I will have accumulated about $40,000 plus dollars between the time of my early pay off and what would have been my initial pay off date. I would have lost the opportunity to accumulate that money if not for the MMA.
Brian,
The math is very straightforward. The MMA cannot be doing what you are saying it’s doing. You either have more discretionary income than you think, or you are looking at the results incorrectly. I am more than happy to show you where your discrepency is, but it would mean putting some numbers out there (income, expenses, etc). If you only have $75 extra a month, the most the MMA can send to your mortgage is $75 a month plus a few dollars in interest, while the extra $3500 in debt generates and extra $10-$20 in interest alone, not to mention the extra principal owed.
I’m not trying to call you out or call you a liar, I’m just saying the math is saying your numbers can’t be right. Something is different from what you think it is. The most common one is bi-weekly income. If you are paid every two weeks, and you have $75 left over each month *that you get two paychecks*, then you have substantially more income since you have two paychecks unaccounted for in your $75/month. Just one thing it could be. We have run literally hundreds of simulations of this process. We know exactly what it’s doing. It never wins with the $3500 anchor, and rarely wins without it.
Calvin
Brian,
You wrote “Using MMA I paid off that much ($10K?) in my first two months.”
Look at it from a ‘balance sheet’ perspective. In the first second you purchased this, your balance sheet dropped by $3500. The fact that it saved you future interest is an obfuscation purposely shown by agents to divert you from that fact. It is easily canceled by the future interest on the $3500 owed in the HELOC.
With no numbers, I’ll assume 6% HELOC. It will take 53 months to pay off the $3500 with your extra $75/mo. 4 years of your money just to get back to break even.
Besides my civility, I hope you notice I do my best to stick to numbers.
Add up all your debt right now, the last statements for Mortgage, HELOC, CC. How much less is it than the day before you bought MMA (and when was that?)
Joe
Hi guys,
Here is what happened my first month. The program told me to pay off $10 K out of my heloc to my mortgage principle. Then it instructed me to put all my income into the heloc as a principle payment. That suppressed my average daily balance significantly and with a heloc its the average daily balance which dictates my interest payment. My actual figures are at home so I’m doing this from memory. My initial average daily balance for the heloc was about $6,000, the interest rate was 2.5% and the first monthly payment was $11.22. So, I borrowed $10 K on my heloc, paid interest on only $6K, and got to use $4k basically interest free. My $75 per month positive cash flow continues to drive down my average daily balance. When my ADB gets to a certain tipping point the program instructs me hit up my heloc again and pay off principle on my mortgage. By doing this again and again the mortgage/debt payback is accelerated. I will admit to not being a financial wizard, but the concept makes sense to me and it is certainly working for me. I can see it in my bank statements. The mortgage principle is down 10K and all the front loaded interest has gone with it.
Ok. At a rate of 2.5% on the HELOC, the shuffle can save you some money, I get that. On a 6% mortgage, the 3.5% savings is nearly $300/yr after taxes, good. But –
(a) you could do this on your own, and work from a HELOC instead of maintaining a checking balance.
(b) you could choose your own comfort level, why not use $30,000 HELOC draw? It seems that when the HELOC rate is below the mortgage rate, the MMA software doesn’t know what to do.
(c) my agreement that HELOC use helps you a bit notwithstanding, you realize there’s risk associated with that type of account, it’s a lien on your home. $50K in CC debt, no problem, they can try to collect. $5K on HELOC, you can get foreclosed on.
(d) don’t confuse “daily balance” accounting with borrowing interest free. I read an MMA endorsement, guy borrows $20K on June 29th, and is amazed how the interest was pennies, based on a June 30th statement date. HELOC is calculated on daily balance, so you pay the full rate on money you owe each day. The shuffle lets you “earn” 2.5% on your cash flow instead of the 0% you’d get in checking.
All well and good, but all the savings don’t add to enough to fund the MMA fee of $3500. I’ve done the math many times and proven MMA cannot beat DIY. Ever.
Hi Joe,
I do use the Heloc as a checking account now. I don’t know all the math behind it but I assume that there is a tipping point as to how much to use out of a heloc to apply towards mortgage. If I take out too much I end up paying too much towards interest on the heloc. If I don’t take enough on the heloc I don’t maximize my repayment time. Again, I don’t know the math on that one. I do realize the risk of using a heloc and have other assets to cover if need arises. I agree a DIY approach will probably save money but I would have to be really good with math. I’m not. What is really nice with the MMA is that I’m online about 5 minutes per week. I have a sound plan for getting out of debt quickly. I might have spent $3,500 but my total interest savings will be between $25,000 and $35,000 over the life of my mortgage. (I did a best case and worse case (hopefully) scenario. What I got for the money was a solid plan that changes in real time with my financial situation. It’s easy, it’s accurate, the service from the company after the sale has been terrific and for the 95% of us who aren’t as good with the math as you are, and I say that sincerely, it gets us out of debt quickly. I really like using the program. It’s motivational and it has done exactly what my agent told me it would do.
Be happy and avoid anti-MMA posts. You bought the program, and are happy with it.
My mission is to talk to people before the sale. My message is simple, “at the end of each month, send your extra money to the mortgage, marked as principal.” repeat.
It’s far more than 95%, I’m the guy who aced the Math SATs in high school. I didn’t play football, but got an A in gym as I tutored the players to keep their grades high enough to keep playing.
But – there’s no math to do this, well, maybe just adding that bit to the check, but anyone can add with a calculator, right? MMA agents are trained to convince you that the math is beyond you. My secret? There is no math.
Hello Joe,
I’ve NOT read all 801 comments here, but I have read several of yours.
I too aced the Math SATs in high school, for what ever that is worth.
I’ve done a ton of investigation on this MMA thing and built an Amortization Table with the ability to add additional money to the monthly mortgage payment to see how it would compare.
You are right, IF, and this is a HUGE/BIG if, you pay $200 additionally each and every month for 21.1 years, you will beat the MMA, which including the $3,500 fee, comes out at 21.4 years. If you miss on average one $200 extra payment per year, its dead even, so probably throw Christmas gifts out each year and use the $200 for your mortgage – NOT!
So if you have THAT kind of discipline, have at it, but we all know that * LIFE * gets in the way, the car breaks down, a kid gets sick, the A/C goes out, etc. and you DON’T make that extra $200 for a month, then the feeling is that next month to catch up you REALLY should do $400 that you DON’T have so you don’t do it then either, and just like going to the gym every day, then miss a day, then well I missed yesterday I’ll start back next week, and before you know it, you’ve NOT been back at all. Same thing happens with the “I’ll pay $200 extra a month” scenario and over 98% of those who start that discipline abandon it wihtin the first year.
With the MMA system, at least it will get you back on track, unless you fully abandon the software as well, in which case, its not the software’s fault, it was trying and recalculating to keep you on track.
Even though the $200 scenario shows it beating the MMA, I’ve run dozens of scenarios where it DIDN’T, and if you add in other debts such as auto loans and a couple credit cards, it DOES almost become impossible for you to figure out how much and when additional amounts should go to each debt. And who JUST has a mortgage these days without ANY other debt as well? Almost nobody.
One last thing, the “I’ll pay an extra $200 a month” plan does not leave you liquid, it uses most available cash to do so, and in the case of an emergency, you can’t just go back to the bank and say, “I’ve paid an extra $2,400 last year and could use it, would you kindly give it back?” They’d say, sure, just take out another loan, which just increased your monthly expenses and your debt load.
Feel free to watch my video series at
NeverRefi dot com / stnick
Nick -
MMA assumes the extra funds are available as well, of course it only works with the money the user has. If my user (of my free spreadsheet, or of nothing) does have the $200 one month, neither does the MMA user.
The reliance on an equity line as emergency fund doesn’t require MMA, anyone can do this. To be sure, it’s not recommended either way, but there’s no magic to the MMA user having that available.
Congrats on the SAT, if that’s the case. Usually those who do that have a certain personality, a bit more black and white, and a bit too logical, almost to a fault. We usually don’t fall for nonsense like this.
By the way, the user with all the other debt should focus on paying that debt off, highest rate first. It makes little sense to throw $3500 to this software when the algorithm is so simple. “Pay all account’s minimums, and send any extra funds to the highest interest rate debt.”
You do get points for your paragraphs, though. We find many agents going off on incoherent rants with no structure. Your points are well presented, even though I dispute the validity of each and every one.
I’ll pass on the video. Why not read my 60 page PDF of all my own posts, and come back with numbers. An example of when MMA actually is better.
St. Nick,
(Merry Christmas. I’ve been good – can I have a Bentley now?)
Another option is Excel, some cool examples of which are at vertex42 dot com. Look under Extra Payments. You could charge clients $350/year to manage the process and they’d be ahead by a few years and a few hundred bucks over MMA. Just sayin’.
“I agree a DIY approach will probably save money but I would have to be really good with math.”
You were told this, but it isn’t true. When your HELOC rate is lower than your mortgage rate, the optimal amount is “as much as possible”, though as Joe correctly pointed out, the bigger the number, the bigger the risk. When it is more than your mortgage rate, it’s equal to your monthly income the first month, and your discretionary income after that. That’s it. The funny thing is the MMA software doesn’t ever seem to use the optimal amounts.
If Joe is right in estimating your savings at $300/yr, that means you have a minimum of 12 years until you’ve paid for the software with your savings, and that ignores the interest on the additional $3500, which you carry until the mortgage is paid off….probably adding another few years to your break even date. 12 years for principal, plus another few for added interest, for many users, the break even never happens because you would pay off the house before breaking even with what you could have done easily on your own.
As Joe said, you like it, so be happy with what you don’t know. Just please don’t recommend putting others into the same system when just a minimal amount of information will give them a free and better alternative. Handing over your finances to a black box is not a good thing.
calvin
So you were one of those math guys in high school. I was the football player. You math guys seemed a little geeky then but I truly appreciate the abilites you have now. When I went through the MMA figures I thought that if MMA cut over four months off my repayment time compared to what I could do myself I would save money. My monthly mortgage is just less than $900. The MMA program is cutting off at least 24 months and I’m sure it’s more than that compared with what would happen if I did my own pay down. I know that’s a simple way for a simple football player to look at it, but leveraging the banks money through a heloc will more than help me recoop the $3,500 start up fee.
Fair enough, not to mention you guys got the girls.
All I’d suggest to you now is that if you have an employer who offers any match on your 401(k), take it, don’t miss a dime of match to prepay a mortgage. And don’t pay a dime of high interest credit card debt to pay the mortgage. I wish you well, I hope your knees still work.
Hi Brian,
What happened to that $8500 loan? Did MMA tell you to write a check from the HELOC to pay it off? What is its interest rate and monthly payment?
One of the tricks that MMA uses is to pay off any outstanding debt you have using the HELOC and “steal” that monthly payment to pay off your mortgage. You magically have extra money to pay down your mortgage while the HELOC balance isn’t paid off as fast as it ought to be.