By definition, living at one’s means implies spending near one’s income level. Ideally, you live below your means, but don’t sacrifice your standard of living. The great thing about the MMA pitch (for agents) is their assumption that after all expenses, including Mortgage and Retirement savings, you still have $1000 in money to burn. Isn’t that the norm? Everyone is swimming in extra cash at month’s end, right?

I plan to get more educated on the process but not be overwhelmed regarding paying off the mortgage.

What’s missing here is that there’s good debt and bad debt. Sure, your house is bad debt since money comes out of your pocket, but if you didn’t have a mortgage, you’d be paying rent somewhere anyway. My advice- get rid of bad debt such as credit cards/ car pmts FIRST, then come up with a plan to disrupt the amortization schedule on your mortgage but NOT live below your means….

Thanks for the article….

It’s moreso proof that the MMA agents are flawed. Anyone with even a modicum of understand as to how this stuff works should pick out that mistake in a heartbeat. But they don’t…because they are sheep/idiots/liars. Take your pick.

To recent poster ray, yes, that issue has been discussed, here and elsewhere, you are correct. MMA benefits the bank far more than the homeowner. But the advertising copy “Help your bank by paying down your overpriced house to stay ahead of falling prices” did not get approved.

Matt’s downfall was simple. He claimed that he “used the MMA for 4 years” and that it was introduced to him in “April 2005″. Those statements from Matt are consistent. The problem, as Late2Game pointed out, is that the MMA didn’t even exist until 2006.

So, given that Matt has been lying to us about how long he was using the MMA, is he also lying about not being an agent? Probably, as only agents put that kind of effort into defending the MMA. Matt spent months here deflecting criticism and attacking the credibility of anyone who spoke out against the MMA. Now that his own credibility is shot, he’s gone. No surprise there.

When you pay down the mortgage, you don’t see any actual cash benefit until decades later, when the mortgage finally gets completely paid off. Your net worth grows, but you still have to make the entire monthly payment, even though you may be years ahead on the amortization table. The bank won’t let you skip a payment just because you’ve pre-paid the equivalent of many monthly payments. Your saving of multi-thousnds of dollars comes many years from now, from the payments that you don’t have to make.

An additional risk factor is that if things go pear-shaped for you and you get foreclosed, the bank takes your house and KEEPS all the extra payments you made. Nobody has mentioned this, either.

Whereas if you save/invest the extra payments into a separate “mortgage payoff account”, you can get the cash benefit of the interest earnings whenever you want it. If you ever want or need to skip a mortgage payment, no problem. Just take it out of your separate account and send that to the bank.

And if you ever get foreclosed, you get to keep the savings account. But you shouldn’t get foreclosed on, because quickly the savings account will be large enough so that you can make a lot of mortgage payments even if you lost your job.

So how about investing in preferred stocks, which are essentially bonds?

You could buy JPM (J P Morgan) cumulative preferreds which are yielding 7.4%. That’s a fixed, constant 7.4%, paid quarterly. Plus a built-in 12% capital gain.

Or BAC (Bank of America) cum pref’s yielding 9.2%.

Or HSBC cum pref’s yielding 8.2%.

Or HSBC floating rate cum pref’s yielding between 6.6% and 15.4%.

Not bad, compared to my mortgage rate of 4.875%.

I’d like to address the issue of the FIANCIAL merits pf paying down the mortgage vs. other alternatives. For example:
Putting that extra money into the stock market, like an S&P500 index fund.
Historical long-term average growth of the S&P is about 10.5%.
As of this date, the average compound annual growth rate (CAGR) of the S&P500 for the last 30 years is 7.5%. Including average dividends of 3%, that’s 10.5%. For the last 30 years.

For the last 20 years, the CAGR was 4.9%. Adding 3% dividends brings the return to 7.9%.

Note that these two periods both include the last 10 years, which were truly horrible. Last 10 years was a CAGR of about -4%. (Minus 4%, IOW, a loss). Adding 3% dividends brings it to a -1% loss.

Now, a mortgage is certainly a long-term vehicle, so it’s appropriate to compare mortgage rates (costs) with long-term stock market rates.

When I compare paying off a 6% mortgage vs. earning (average) 10.5% or 7.9% it seems like a no-brainer. 7.9% is more than 6%, so investing is superior to paying down the mortgage.

And eventually the (growing) investment account will meet the (decreasing) mortgage balance and you could pay off the mortgage in one fell swoop.

Why are you quiet all of a sudden after 7 or 8 months of banter?

I mentioned 5 or 6 LOC cycling software products I looked and and the cheapest of the bad choices I made.

Which bad product did you use for the last 4 years and why not be honest when you entered the blog?

What product *did* you buy and what did you pay for it? Why have you let everyone assume you were on the actual MMA product?

You’ve spent so much time trying to catch others in lies or inconsistencies, don’t you think it a bit odd that you are not even on the program being discussed here? This raises new and troubling questions, don’t you think?

Well, if that is the case, then Matt’s agent, who he claimed was a very honest person, was using a Trademarked term to advertise their product, which was from the company that holds the trademark. personally, i have no problem with someone ripping off the UFF’s marketing given the marketing is crap.

>>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.

You said:

>>I’m sure both of you, and your colleagues, will once again work in tandem to try to discredit me instead of owning up to your own inaccurate, incorrect, and off-the-mark statements.

I’ll own up to posting a link to some randomly googled blog (with overstated and “goofy” examples) if you will own up to not representing yourself completely truthful by allowing many here to believe you were a client of United First Financial on the Money Merge Account. What say you?

of which, you can’t show any. I’ve shown plenty of inaccuracies by you. Your statements to risk, the honesty of agents’ marketing materials, “no brainer non-investing” and inflation are all way off base.

have fun defending scammers.

What do you think about Ken’s comment that the post you made was “goofy?”

This has gone from the ridiculous to the outlandish. I’m sure both of you, and your colleagues, will once again work in tandem to try to discredit me instead of owning up to your own inaccurate, incorrect, and off-the-mark statements. Again, I can speak for no one but myself and I’ll leave it at that. You can say whatever you want but it doesn’t change my experience and my honesty on this blog.