I want my prize!

You won't find the truth about MMA's, United First Financial or anything of the sort by looking here. All you find are the same polarized opinions that seem to characterize every message board on a controversial topic. There are lovers of the product and there are haters of the product and both will overlook the shortcomings of their points of view.

For what's it worth, I am not a user of the program, nor will I ever be. I am of the "get a big mortgage and keep it" school of thought. For me, that works because I have the discipline to make it work with my financial plans. Bottom line, I like the cheap money and in my financial situation there is no real risk to taking advantage of it.

For others, though, this might not be the case. Perhaps others, for reasons emotional, psychological and financial, would prefer to pay off their home quickly. To them I say "bravo". They are as much taking charge of their financial futures as I am. Different style, but that's OK. My plan fits my values, their plan fits theirs.

A common criticism is that to participate in an MMA program, you will spend $3500 for what amounts to a fancy calculator. This is true, but if a "fancy calculator" is what it takes to keep you motivated, on-track and in charge of your situation, $3500 is a small price to pay. I'd never do it myself, but that's just me. Doesn't mean there isn't merit to it. I paid Merrill Lynch $2500 for a "financial plan" that is, to this day, sitting on my shelf collecting dust. I think I read it once. Most expensive book I ever read!

Another criticism is that "the math doesn't work". Well, you know what, I did the analysis, and you are right. Some of the rationale given isn't exactly correct, but the math, strictly speaking, doesn't work. But personal finance isn't all about math. It's as much about praxeology as it is about numbers. And it participating in an MMA program causes one to act to take charge of his financial life, well, so be it. The individual is better off for it.

So, is a balanced perspective welcome here at fatwallet.com?

Systems like the one OP mentions are overpriced and marketed in misleading ways.

The system "works" as follows:

1) A home equity line of credit is established (these used to carry interest rates LOWER than your home loan, now they are substantially higher)
2) Income is paid into your HELOC and if the HELOC has a surplus that surplus is paid towards your home mortgage.
3) Expenses (paid via checks typically) are paid with a loan from your HELOC

The excess of your income over your expenses results in additional paydown of your mortgage. If you have a spell of more expenses than income you end up paying interest on your HELOC at a rate that is going to be much higher than your home loan.

If you consistently spend more than you make you not only won't pay off your home early you'll watch your debt load grow.

If you consistently spend less than you make you will see your mortgage balance decrease.

For that you pay $3500, I'll give you a simple, free version. Direct deposit your paycheck to a savings account that earns interest, make your mortgage payments as late as you can without incurring a late fee (typically the 15th of the months instead of the 1st) spend less and make an additional payment towards the principle as close to the end of the month with your excess savings. An even better approach is to leave your low interest fixed rate mortgage alone and simply toss some money into an investment account every month, preferably one that isn't invested in individual stocks that someone pitched you on some message board.

There is a reason these "systems" are sold at seminars, they need a smooth talking salesman to separate you from $3500 for something that is better suited for a $19.95 paperback book.

The majority of people who foolishly fork over $3500 for these systems aren't going to stick with it much longer than they stuck with their health club membership. Their excitement will wane about as quickly as their enthusism over the overpriced timeshare they bought. The reason their excitement will wane is because people who blow $3500 on systems like this aren't good at spending less than they make.

Now for some hard math, which is where these plans wildly mislead people.

The hard math is that someone who takes home $5K/month and has a 6% mortgage, ignoring taxes, will "save" a massive $300/yr if they can manage to put the entire $5K against their mortgage at the 1st of the month and get it back at the end of each month to pay their bills.

That isn't going to pay your mortgage off years earlier but this is the smokescreen used by the promoters. It is what drives the complicated magic software and linked accounts.

The reality is that the rapid repayments touted by the promoters are only possible if people pay substantially more towards their mortgage each month, money that they used to spend or save elsewhere.

If you cut thru the marketing BS and the foggy testimonials for $3500 they teach you that if you spend more money on your mortgage and less on beer and eating out you can pay your mortgage off faster. Well smack my head Junior, that's gotta be worth $3500!

Oh, I forgot the part about if you can con some of your friends, neighbors or random strangers on the Internet to make the same dumb mistake of forking over $3500 you can earn a cut of their foolishness.

ThirdJoker said:Just once, I'd like to see someone float an unpopular idea and have a few "Hey, great, if it works for you, terrific!" responses. Everyone seems to act like they are selling their soul if they even hint that something contrary to their strategy just might work. I don't get it.

Hey, great if it works for you and doesn't cost $3500.

I don't mind if you pay down your mortgage earlier by putting more of your income towards your mortgage. Go for it. It might or might not be the ideal use of your money but it isn't a bad idea.

But if you want to encourage people to spend $3500 for a system that is nothing more than a complicated way of paying more of your income towards your mortgage then I'm going to say it is a bad approach.

Let me give you another example, I don't have a problem with you suggesting people use an automated coffee maker to wake themselves up instead of an alarm clock. It works for you and that is wonderful. But when you suggest people pay $3500 for that automated coffee maker as a substitute for an alarm clock I think your reasonable idea became unreasonable. Get an alarm clock or a cheaper coffee maker and put the $3480 in savings towards your mortgage.

bcdond said:WalStMonky said:Doh! I figured it out! How could I have been so dense?!? It really is simple math...you collect commissions from lining up suckers to buy into this scam, and that pays your mortgage down much much faster than if you didn't get the commissions!! But wait...do I have to sign up for the money merge account myself? I could line up suckers to earn commissions, and pay off a motgage+HELOC+HY checking account combo much faster than using the scam for my own mortgage...

Do I win a prize for figuring out the secret?

Then how do explain my savings over the past four months. If it wasn't working shouldn't I know it by now?

If you have "savings" over the past four months it is because you spent less money than you earned.

Period.

You are welcome to explain it some other way, preferably with math and not a vague assertion.

bcdond said:

Then how do explain my savings over the past four months. If it wasn't working shouldn't I know it by now?

Please mathematically post your savings and how you arrived to that figure. I'd bet that the putting that same money in a conservative mutual fund would give you even more savings.

You are going to have to first explain your savings to us, before we can explain things to you.

WalStMonky said:ThirdJoker, I guess you would find it 'reasonable' to allow snake oil salesmen to sell sugar pills to cure pain and disease, since they 'work' for some people. Hey, the placebo effect is very real, so why not?

To the extent that the "snake oil salesmen" are making exaggerated claims, no, of course not. But in my mind, yours is an inappropriate analogy. Rather than "snake oil salesman" I prefer to think of the MMA as herbal medicine, acupuncture or chiropractic care.

WalStMonky said:Your calling your 'middle ground' reasonable does not make it so. This is not an argument over which flavor of ice cream is the best. There are very specific claims being made with this product, which are demonstrably untrue.

Make no mistake, I am not calling anything a "middle ground". What I am saying is that anything that works to help or keep someone on the path to financial success has value. Yea, I know, $3500 is expensive. But price is what you pay, value is what you get. Who am I (or who are you) to determine that value for someone else? And maybe you don't need the discipline that the tool provides, but why bash other's use of it? Of course, we point out the pros and cons, but why bash it?

Again, to the extent that "demonstrably untrue claims are being made" I would lead the charge to sanction anyone participating in that. But the gray area, and there is a gray area, isn't where this battle should be fought.

WalStMonky said:...In fact, you have a better chance of curing your cancer with sugar pills than you do of saving money using this scam product.

Mathematically, you are right. Praxeologically, you are not necessarily right. You may even be wrong.

bcdond said:It's more than that. It is plain to see you have not seen a full presentation if you had you would not make the comments you are making. Don't jump to conclusions based on faulty info. This concept has been Nation wide for a year now, and three years of testing before that. Where are all the dissatisfied Customers. The company is growing at a rate of 1400 new clients per month. Surley there would be one person on all these forums that has a complaint. I have yet to find one.

Is this Amway?

ThirdJoker said:To the extent that the "snake oil salesmen" are making exaggerated claims, no, of course not. But in my mind, yours is an inappropriate analogy. Rather than "snake oil salesman" I prefer to think of the MMA as herbal medicine, acupuncture or chiropractic care.Oh, pleassseeee..


Herbal, Acupunture, and certain Chiropractic practice has been shown scientifically to work.

Why not just hand me over the $3,500 and a big stick and I'll make sure you save enough $ to pay off your mortgage sooner?! Praxeologically!!!