When Henry Ford uttered the words, “Whether you think that you can, or you think that you can’t, either way you are right.” he may not have known how right he was or on how many levels he was accurate.

Fear can be clearly defined as – the action or inaction that is caused or avoided based on a lack of information. In other words, in any area of life the more you know, the further you will go. Equipped with the right education and information, human beings become more willing to apply what they have learned to serve their lives and move in the direction of their goals. Financial security and the peace of mind to know that your money is under control is something every Canadian desires but the majority have never experienced. The reason is directly proportionate to the level of education the average Canadian possesses with regards to managing debt and money in general.

Jim Rohn once said that formal education will make you a living while self education will make you a fortune. Where your debts are concerned, self education will SAVE you a fortune! If you took the time to learn how each one of your liabilities – especially your mortgage – worked (about an hour of studying, give or take 30 minutes), then for the rest of your life you would truly understand the impact of your financial decisions instead of relying on the advice of another person which is never as comfortable as knowing for certain based on your own self education.

For most Canadians, their mortgage is their largest liability and due to nature of compounding interest, it is also what you might call “the serial killer” of debt. It’s weapon is interest and it keeps coming for more of your hard earned money until you eliminate it entirely. It’s that simple. Faced with an enemy of this nature in real life (an angry bear in the woods), I’m sure you, just like me, would leave no stone unturned in your search for ways to weaken and eventually kill off your enemy before it finishes you off, right?

So I guess you ought to ask yourself if you are approaching the elimination of your mortgage with the kind of urgency necessary to win your battle? First and foremost, have you even identified the most efficient path you are able to take to pay off your mortgage given your income and expenses? Most people never do and the worst part is that it’s actually simple to do, it’s just basic math! Next, once you know that it is possible to pay the mortgage in say 8 years and 5 months with little to no change to your current lifestyle, would you be willing to make the commitment to follow the steps necessary to accomplish that feat? No one can teach you desire…you either want it or you don’t, right?

InterestSUCKS.ca was born to help you get the information you need in order to quickly learn how to bank like the bank and save money. All you have to do is commit to being a student of your life and finances and this site will become your resource centre and personal guide to getting debt free in a reasonable period of time. Do you believe it is possible for you to do better than you are doing now? Whether you believe it, or you don’t…either way you are right.

Good luck!

Any time you borrow money of any kind, you should always have a strategy in place to pay the debt back as quickly as possible. Understanding interest and how it works with the particular kind of loan you are taking is critical to successful financial management. It’s all math…and simple math at that. Here’s an interesting math scenario for all of you to digest! It may make you think twice about the way you are managing your debts.

For most people, their mortgage is their largest and most damaging debt in terms of interest accrual. Let’s say you borrowed $250,000.00 at 5% interest and paid it back over 25 years. How much interest do you think you would pay on the money your borrowed? How about a whopping $186,000.00!!! If you divide $186,000.00 by the amount you borrowed ($250,000.00) you get the true rate of interest, which is 74.4%!! Can you imagine if the bank told you in the beginning that they would be charging you 74.4% interest on this money? You might have never bought the home in the first place!! Believe it or not, it gets worse!

Currently 37% of mortgages in Canada are amortized over longer than 25 years (in most cases 30, 35, or 40 years). Well, if you used the same numbers as above and paid the $250,000.00 back over 30 years, you would pay 92%  or $230,000.00 in interest. A 35 year amortization for that same mortgage will accrue 110% interest ($276,000.00) and a 40 year amortization?? Forget about it!! A 40 year mortgage will accrue an absolutely ridiculous 130% interest!!!

It’s amazing what happens to the way we think, once we are equipped with factual knowledge (in this case real numbers) that allows us to see the true picture. Perhaps before reading this, you didn’t realize the level of importance in paying off your mortgage in the shortest amount of time possible. Do you even know how fast you could become mortgage free given your income and expenses? Most people don’t! I ask people every day when they will be mortgage free and they usually shrug their shoulders and estimate in blocks of years! “Oh, you know, somewhere between 15-20 years”…which is crazy when you consider the cost of not being on the shortest possible path to paying back the principle owing on your mortgage.

The numbers tell us it is possible for the average person, with an average income to pay an average mortgage off in 12 years or less and save 50% of the interest they would have otherwise paid. Now, getting your mortgage under control like this may seem like a scary thing, but it doesn’t have to be. All the education you need is here on this site and if you do not find the answers you need, please drop me a note or comment on the post and ask me…I want to help you.

-Chris

Today marks the official launch of InterestSUCKS.ca, your place for learning how to “Bank-Like-The-Bank” and make interest work for you, not against you.

We are a Canadian site dedicated to educating other Canadians on how we can own our homes free and clear in less time than we have ever dreamt just by banking smarter. Take some time reading our first two articles titled How To Take Control of What Is Controllable and You can take a shower now, or a bath later! and be sure to subscribe to our feed.

Don’t be shy, have a poke around this site and you will find mortgage related tools including personal credit checks, as well as finance related news from all over the web as well as the details you need to be able to learn how to “Bank-Like-The-Bank”.

Have fun, good luck, and please get in touch with us if you have any comments/suggestions.

A good friend and associate of mine gets the credit for this one…thanks David! He sent me an email this morning about the Smith Manoeuvre. I have been fortunate to spend enough time with David to show him that paying off a mortgage as quick as possible has only one goal…get to zero fast! Did you know that 37% of Canadians with a mortgage have an amortization longer than 25 years? That’s crazy!! People are always trying to find new and interesting ways to get mortgage free faster, and the Smith Manoeuvre is a popular choice for those who have built up some equity in their home (at least 20%) and have a tolerance for taking calculated risks. For the record, I do not believe in this type of strategy only because I am partial to strategies for paying off debt that are safe, certain and predictable like the Money Merge Program from United First Financial.

The Money Merge Account (MMA) system helps average people determine what IS possible for them in terms of becoming mortgage free. Like a GPS for paying off debt, the MMA program is a web based software system that charts the “path of least interest” for you based on your current budget and gives you specific instructions what to do with your money when you get paid. It does not move money for you and is totally secure because it does not know any of your banking info. It simply manages the process of becoming debt free as efficiently as possible based on what you tell it is happening in real life. It’s simple to use and all my clients are using it. Imagine you are Sharon, a single mother of 3 who just found out that the MMA program would show her how to pay her 30 year mortgage off in 6 years, saving her $248,000.00 in interest!

About the only thing the Smith Maneouvre and The Money Merge Account program have in common is that they both use a line of credit and both share the common goal of trying to help people pay their mortgages off sooner. That’s it.

The Smith Maneouvre is not a bad strategy by any means, but it is risky, and it requires you to already have considerable equity, which many people do not have, and once you are performing the Maneouvre, you must manage the entire process, making sure to move money around every month to ensure effectiveness with the Maneouvre.

Here’s how it works in a nutshell with my comments after each step…

1. First, you must have a specific type of mortgage product. Your mortgage must be re-advanceable which means there is a Home Equity Line of Credit attached to it. As your mortgage principle comes down, your limit on your line of credit increases proportionately.

   Stop and think! You must exercise extreme discipline not to use this available credit for anything except making the SM work until the mortgage is paid off…assuming everything goes as planned.

2. Use the HELOC portion of your mortgage to invest in income producing entities like dividend paying stocks or rental properties.

   Be Careful, as this can obviously put you in a very insecure position as a homeowner. Recently the housing market has taken a dip and home values have dropped across the country and people who were leveraged up this way have been burnt. Being in a negative equity position, where you owe more to the bank than the house is worth, is never comfortable and peace of mind is a big consideration for me.

3. When it comes time to file your taxes, you can then deduct the interest you paid on the money you invested from your income. If the tax paid was $10,000.00 this would reduce your taxable income and you would earn a return.

4. You can then use your tax return and stock dividends to make a lump sum payment on your mortgage.

Uncertainty at it’s best – There is no guarantee with any stock that a dividend will be there, it’s all speculation, just ask those who recently lost their shirt in the stock market!

Repeat these steps until the mortgage is paid. It is impossible to predict when that will be though because all of this depends on nothing “bad” happening in the market.

At the end of the day, the Smith Manoeuvre is nothing like the Money Merge Account which deals only in absolutes and adjusts as life changes. The Smith Manoeuvrer lacks certainty and predictability which ultimately eliminates peace of mind through the process but if you would like to discuss this further, let us know!

Until next time…hang on to your money!

-Chris

Imagine if you had a GPS for paying off your mortgage or other debts. Wouldn’t that be fantastic? It would be like having your own personal financial planner at your service 24 hours a day, 7 days a week and you could communicate with it interactively. It would set a course for you to become mortgage and debt free in the quickest possible time given your unique current income and expenses, give you step by step instructions how to do it. As long as you told it if and when something changed, it would instantly re-calculate like a GPS and provide you with updated step by step instructions you ought to take in order to become debt free as soon as possible and by paying the least amount of interest you could get away with How much would that be worth? Thousands? Tens of thousands? Hundreds of thousands of dollars?

Maybe it sound too good to be true? Why? Doesn’t such a path exist? It’s just math isn’t it? If you were to sit and calculate it every day, couldn’t you determine your best course of action with each dollar you earn? Sure you could…but you and I both know it would be a nightmare to manage all the variables wouldn’t it? Of course it would, so instead, most Canadians never learn to manage their debts properly and end up paying thousands of dollars more interest than is necessary every year! The numbers do not lie. Why do you think the banks have been using software math engines to do their banking for them for decades, ensuring the greatest savings on their liabilities and their greatest return on their investments? Because if you recall: to err is human.

Statistics say 9 out of 10 Canadians can get out of debt faster and pay less interest while doing so and our team wants to make this a reality for you. In an effort to raise awareness in every Canadian of what IS possible, InterestSUCKS.ca has invested in a software tool that can analyze your income and expenses, and in seconds, project for you how quickly it is possible for you to eliminate your mortgage as well as show you how much interest you would save in the process! We are happy to provide you with a complimentary 4 page analysis so you can see for yourself how much power your money actually has! Just drop us a note and one of our agents will contact you directly to gather the information necessary to perform the free analysis.

By the time our team is finished with you., you will know exactly how to bank like the bank! You would do your banking differently, if you only knew…and now you can see for yourself. What are you waiting for??

Every day I am showing new groups of people how to eliminate their debts in less than half the expected time. It’s a simple recipe of math plus timing plus a clear understanding of how to bank more efficiently…that’s it! It’s absolutely amazing how conditioned we all are when it comes to our beliefs regarding managing a mortgage. The average Canadian takes 21 years to pay off their mortgage. The fact is, most people could easily pay their mortgage off  in less than ten years with no change to their budget. Instead, the majority of Canadians (9 out of 10) willingly choose to make years of extra payments and pay thousands of dollars in unnecessary interest over investing a couple of hours of into educating themselves about how to effectively manage their largest debt. It’s absolutely ridiculous and it is a choice.

Let me give you an example. Pretend you got into your current mortgage 2.5 years ago and at that time signed a five year term with the lender. Imagine that because you didn’t really know what you were doing when negotiating, you chose the lowest rate you could find thinking that was the best way to go. Then you met me, and spent an hour with me. 

You realize that with a simple change to the way you bank, you are able to build equity in your home 3 to 4 times faster with no change to your current income or expenses and pay thousands less in interest going forward. Now you realize that there is a big problem…you chose a slightly lower rate 2.5 years ago and in exchange, the bank put restrictions on your ability to accelerate the pay down of the mortgage for the five year term. Perhaps the fine print says you are only able to pay 5 or 10% extra to principle every year…or maybe you can pay more if you want, but it all has to be paid once and only once a year on the anniversary date. This is how the banks ensure they collect the most interest possible during the five years. It’s their protection mechanism but at the time, the lower rate seemed like a deal. Now you realize you are virtually paralysed in this mortgage for the rest of the 2.5 years on your term and that is a high price!

I now explain to you that what this means is that although you are capable of reducing the principle now, you are not allowed to do so for 2.5 years, and instead you will pay interest on the full amount for another 2.5 years. You have a choice….refinance and pay a small penalty to get into a new, smarter mortgage and reduce the principle as fast as possible, saving you literally tens of thousands of dollars and cutting your losses OR do nothing, save the penalty money and pay thousands more unnecessary interest accrue on the mortgage.

What do you do…take a shower now or a bath later?

I’d love to hear your comments.

-Chris