The Smoke and Mirrors of Big
Banking and Your Mortgage |
By Wayne Wood |
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If you ask the average American what the single most significant
financial purchase he/she will make in their lifetime is, most will
answer, My homes that answer correct? No. The correct answer would
be, their mortgage.
Integral to the whole mentality of the
proverbial American Dream at least for the successful
middle class, is home ownership. This has been considered a
financial success gauge of sorts for so long that potential first
time home buyers will do just about anything to qualify for
that first home loan or mortgage and they feel so jubilant when they
succeed. Little do they realize they are being greatly taken
advantage of. They are actually being defrauded in some ways. They
are paying interest so excessive that even the word excessive is a
huge understatement. Let us explore the banking industry a little
and get to the bottom of what is really going on, get to the
reality, versus the illusion the banks have so artfully created.
You might find it interesting to discover that the word,
mortgage, Mort-Gage, means death debt. Not so warm and fuzzy
sounding all of the sudden is it Anyway, if you have a
standard 30 year mortgage, as I mentioned earlier, you are being
greatly taken advantage of. That 5.9% interest rate sounds pretty
decent right Smoke and mirrors. If you never refinance, by the
time you pay off that loan in 30 years you will have paid for your
home 2 and a half to 3 times. That is significantly more than 5.9%
of balance you borrowed is it not
Lets put that in to real
numbers. We will be a bit more closer to the average though and use
a 7.5% interest rate. A $175,000 mortgage at 7.5% average interest
rate amortized over 25 years equals an actual indebtedness of
$384,000 (principal and interest). These are after tax dollars! If
you are in a 40% tax bracket, you will have to earn a whopping
$640,000 before tax in order to pay off the $175,000 mortgage.
$640,000 minus $175,000 equals a $465,000 difference.
But
actually, on average, Americans refinance every 4.9 years. So
really, few rarely stay in a loan anywhere near the standard 30 year
term anyway. And since mortgages are front end loaded on the
interest, you will have paid very little on the principle in 5-10
years, most of your equity being achieved through appreciation of
the homes value. In fact, in 20 years you will still owe 60-70% of
your principle. And the banks gouging of your wallet is far from
finished. Consider this.
The bank can loan up to 9 times what
it has on deposit. What's the significance of this? They only had to
have a little over $22,000 on deposit for example, to loan $200,000.
How is this possible? Where did the other $178,000 come from? Did it
just appear from nothing? As a matter of fact it did.
That
money literally sprang into being when they transferred it to your
account or wrote you that check. So the bank ends up making
two-and-a-half to three times the amount of money they never loaned
you in the first place, and they charged you almost all of that
interest on nothing. So you see, all this interest the bank is
receiving, all these interest payments, mostly paid in the front end
of your home loan, and virtually every other loan out there, amounts
to rivers of interest payments on nothing! If you are the one
loaning the nothing money, that's not too shabby. How much easier
and risk free can making a fortune get You didn't have to risk
a penny, and yet you get to collect interest! Earning money from
money created out of thin air. How is that different from
counterfeiting? How is that different than me printing money on my
money machine in my garage, loaning it to you, and charging you
interest on it. The only difference is that they can do it ?legally,
and I would go to jail for it.
Any interest, no matter how
little, charged on nothing, I would have to call excessive! Wouldn't
you agree And if most of us refinance every 5 years, their interest
on nothing is compounded again, because what you owe them never
really goes down much, in fact in many cases it would go up. Makes
you want to go to your mortgage lender and have a talk with him
doesn't it But do you really think they are going to tell you how to
cut their profits I don't think so. So is there anything you can do
What if you could take your current mortgage payment and cut it in
half Say you have a $1000 house payment. What if you could
take $500 of that money that was previously going to the bank as
excessive interest on money they created out of nothing, and instead
invest it at, for now lets just say a 10% annual return.
How
much would you have at the end of 1 year, 2 years, 5 years and 10
years, and 16 years with annual compounding
Answers:
1
Year: $6,833
2 Years: $13,827
5 Years: $39,496
10
Years: $103,536
16 Years: 202,246.86
So in just about
half the time you own your house outright, you're no longer in debt
to the bank, plus you have the additional equity of 16 years of
appreciation. And this is at only a 10% annual return. Since on a
standard 30 year fixed rate loan you, on average, still owe about
76% of the principle after 15 years, not only do you now own your
home, but you have saved yourself $152,000 in interest on legally
counterfeited money, that you would otherwise have had to pay to the
bank over the next 15 years.
Even if you did not invest your
monthly increased cash flow, but instead used it to pay off credit
cards, take vacations, whatever, and refinanced every 5 years to
collect the idle equity in your home, suddenly your home has become
a cash flow tool, an asset, instead of a liability. However, if you
are willing to invest, you have even more options.
Documented
by Standard & Poors of the S&P 500 Index, there are investment funds
out there earning from 30% to as much as 400% per year! There are
funds earning 10% and more per month! Why haven't you ever heard of
these types of investments Even the majority our financial
professionals and advisors would laugh in your face if you tried to
tell them you could get these types of returns. Yes, the big bankers
gouging of your hard earned money continues.
They have
intentionally been part of a misinformation campaign for the better
part of a century to make sure that you and the general public do
not know about these investments. For example, I recently saw a
commercial on television. It portrayed a man holding a scalpel to
his chest and talking to a heart surgeon on his cell phone. He was
saying to the surgeon, Shouldn't you be doing this The
narrator then chimed in, You wouldn't try to perform your own
heart surgery would you? Than why would you try to manage your money
Let the experts at ABC company etc.You see They do not want
you trying to manage your own money and spend who knows how many
millions of dollars every year in advertising trying to convince you
to let them do it. Why? Because in addition to charging excessive
rivers of interest on non-existent money, they want your money with
them so they can pay you the measly 1.1% to, if you are fortunate,
5% trickle down interest, while they make 30% to 400% on that same
money. Can you imagine the affect on their bottom line if we all
started taking our money out of the bank and investing it at these
high returns on our own Wouldn't you love to be able to cut
them out of the picture and make 30% to 400% returns on your money
Or 10% to 20% compounded monthly
To demonstrate the power of
compound interest at these levels, lets take that same example we
discussed earlier and figure it at only an 80% annual return. We
won't even get into the 100% to 400% levels.
So again we will
take that $500 previously going to the bank as excessive interest on
money they created out of nothing, and instead invest it at 80%.
How much would you have at the end of 5 years and 10 years, and 15
years with annual compounding?
Answers:
5 Years:
$241,417.00
10 Years: $11,842,339.00
15 Years:
$569,305,174.00
In 16 years you would be a billionaire from a
$6000 yearly investment or $500 a month. And again that is not even
taking into consideration the 100% to 400% returns. Realistically of
course nobody would ever have that much capital in one place, but
these numbers certainly illustrate the power of compound interest.
But this is essentially what the big banks are doing with your
money. Multiply all that interest on nothing by every car, every
house, every factory, every restaurant, every farm, every high-rise
office building, etc Then also factor in all the money from the high
yield investments they don't want you to know about, billions per
year invested at those returns as opposed to the $6000 per year you
invested and still achieved billionaire status with in only 16
years, and you have absolutely mind boggling wealth, mostly earned
through deception and propaganda.
I don't think you have any
reason to feel guilty about pulling your money out of your savings
and checking accounts with the big banks. For your daily financial
needs, put it instead in a small local bank or community credit
union that helps to reinvest into your community. And immediately
get educated financially about how you can invest in controlled risk
investments earning 30% to 400%, as well as the rest of the
financial secrets of which I have only scratched the surface of
here. Fill out the paperwork right away to see if you qualify for
the 1% payment option loan that we can get you access to, in
addition to 3 other very unique mortgage programs the large banks
would love to do away with. Take that increased monthly cash flow
and invest, invest, invest.
Yes, armed with the right
knowledge, you can turn your mortgage into an asset instead of a
liability. Your home can be a cash flow tool working for you instead
of you working hard to pay your mortgage. You can use your mortgage
to accelerate and finance not just a great retirement, but an
amazing one, in a few short years, without increasing your monthly
expenditures and virtually no money out-of-pocket to get started.
Why would anyone with a mortgage not want to do this
However, what about the person without a mortgage to refinance
Or what about persons without a healthy enough credit score to
finance a home period
The average working man/woman pays
from $7,000 to $10,000 a year in income taxes. What if you could
legally and lawfully recoup most if not all of that tax burden
You now have more to invest annually than the individual saving $500
a month on their mortgage. Once again, with the right knowledge, a
huge percentage of the population can do this. And if you are in a
situation where you can utilize both of these strategies, how
quickly could you achieve your financial freedom
In
conclusion, armed with this knowledge, just about anyone can achieve
financial freedom for themselves and their family. The key is
knowledge. People spend thousands, tens of thousands, even hundreds
of thousands of dollars on education. They start college funds for
their children when they are infants and save for almost two decades
for that education. Then that same person balks, hesitates to spend
just a little, on an education that can enable them to obtain true
freedom. Financial freedom, time freedom, retirement freedom,
freedom from stress, as well as personal privacy and sovereignty.
Sadly most persons are so conditioned by the system that even at
their own peril, will never act to unplug themselves from it.
Hopefully, you are not that person. If you decide to take action,
you can beat the banks. Call or email me anytime for more
information.
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