Now you have a better idea of the underlying concepts for Homes in Order. I have condensed the entire world of finance into two simple formulas: 1=5 If the typical new homeowner were to prepay just $1 towards their mortgage, they would save $5. But you don’t want to be typical. If you could pay $1,000, you would save $5,000. If you could pay an extra $10,000, you’d save $50,000. 2 = 1,000 If they typical new homeowner were to prepay just $2 towards their mortgage…

When Shawn adds Diligence to Patience, the results really add up. When Shawn makes regular monthly prepayments, the savings really add up. Here’s a look at what happens when he adds only $200 to his monthly payment. As Shawn adds $200 to each monthly payments, the graphs shift monthly. And the savings really add up! By paying just $200 per month extra: Shawn saves $97,618 in interest Shawn saves 7.92 years of mortgage payments Shawn saves 95 mortgage payments. Wouldn’t it be awesome to not have…

Here is a familiar look at Shawn’s mortgage. If Shawn were to pay $1 extra towards his mortgage at any time in the first 20 years, he would double his investment. In fact, in the first 3 years, $1 prepaid would save him more than $6. Patience Shawn will still have a mortgage payment due the next month For the same amount Shawn still has decades of mortgage payments Diligence Shawn sees the benefit of making a single prepayement. Now let’s look at the benefit of…

Shawn from the book is getting excited about saving some money! But it gets even better. If you prepay your mortgage, you will save interest. If you don’t prepay your mortgage, you will pay interest. You don’t have to prepay your mortgage, but if you don’t, you will pay interest. Committing to paying off the mortgage is hard, and making prepayments is hard. The tough thing about prepaying your mortgage is: You will still have mortgage payments. You save at the end of your mortgage, but…

Shawn from the book has learned a lot! The faster you can get out of debt, the less interest you will pay. Those who understand interest earn it. Those who don’t, pay it. The longer you are in debt, the more interest you will pay. Let’s look at Shawn’s mortgage from a different perspective, an interest savings over time perspective. By making prepayments to his mortgage, Shawn will save money. The sooner Shawn makes a prepayment, the more he will save. This is how much interest…

Shawn from the book has learned a lot. Those who understand interest collect it. Those who don’t, pay it. (He pays a fortune in interest!) Paying off your mortgage will save a ton. You don’t have to wait to pay off your whole mortgage. You can make prepayments along the way. Making a prepayment can save you a lot of money. The earlier you make a prepayment, the more you will save. That last bullet point is worth repeating. The earlier you make a prepayment, the…

In two scenarios, Shawn prepays $10,000 towards his mortgage. Let’s compare. In both scenarios, Shawn prepays $10,000. He saves $48,984 and 3.13 years in scenario 1. He only saves $11,051 and 1.13 years in scenario 2. So, what’s the difference? Why did he save so much more in scenario 1? The only difference is time. The earlier you get out of debt, the more you will save. The later you get out of debt, the more interest you will pay. < Year 18 Prepay mortgage summary…

Shawn saves his money and decides to make a prepayment in Year 18. Shawn decides that he make a pre-payment of $10,000 to his normal payment. Look what happens when he makes a prepayment of $10,000. As you can see, in this example, Shawn only saves $11,051. That’s an amazing investment! Shawn just doubled his money. But compared to the previous example, only doubling your money pales in comparison. As you can see: The Principal curve on the graph shifts left. The Interest curve on the…

Shawn from the book is a new homeowner. He finds himself with $10,000 in the bank. He has seen the value of paying off his mortgage, so he decides to make a prepayment of $10,000 in year 2 of owning his home. Look what happens when Shawn makes a prepayment to his mortgage. Shawn makes a prepayment towards his mortgage. Making a prepayment has immediate results. The Principal curve shifts left The Interest curve shifts left Shawn saves 3.13 years of payments Shawn saves $48,984 in…

Shawn is no dummy. He can see that paying interest is not so smart. So, Shawn starts saving his money. And Shawn makes a goal to pay off his mortgage. In Year 26, Shawn takes his savings and pays off his house. Boom! Congratulations, Shawn!!! In January of year 26 of Shawn’s mortgage, after saving all his money for years and years, Shawn makes a payment of $80,760 and he pays off his house! Shawn: Paid off his mortgage 5 years early No longer has a…

Albert Einstein was a smart guy. And speaking to interest, he said: Interest is the eighth wonder of the world. Those who understand it, earn it. Those who don’t, pay it. Albert Einstein Now we’ve seen how mortgage payments work. And we’ve seen how much interest you’re actually paying for a mortgage. So, as far as “understanding” goes…. Shawn: Is paying 85% interest in a payment Is paying over 80% interest for 5 years Is paying over 50% interest for 20 years Is paying $318,861 to…

Let’s take a closer look at the monthly mortgage payment. For a 30 year mortgage, Shawn will make 360 monthly payments. Each payment is comprised of Principal & Interest. Shawn got a great rate of 6.5%. That is an annual rate. If Shawn were to pay off his mortgage in 1 year, he would pay 6.5% interest. However, Shawn’s mortgage is for 30 years. He will pay a lot more than 6.5% interest. In fact, for the first 5 years of his loan, Shawn will pay…

Shawn from the book just bought a house. To get into his house, Shawn went to school, got an education, got a good job, saved money, and bought a house. Congratulations, Shawn! Anybody who can qualify for and buy a house is an excellent manager of money. However, after buying his house, Shawn suddenly realized that he didn’t have as much available cash as he used to. Homes are expensive! And he found out that after achieving his goal of buying a home, he wasn’t sure…

Congratulations! You made it. You are ready to get started on your Personalized Way to Wealth. I’m a real estate guy, and I’m a finance guy. I’ve done the math, and I can show you how to instantly turn $1 into $5. In fact, I can show you how to turn $10 into $50, and I can show you how to turn $100 into $500, or $1,000 into $5,000. I can even show you how to instantly turn $10,000 into ………..? Yep, $50,000. Do you see…

Would you rather have No money in my bank account $200,000 in your bank account1 No money in my bank account $200,000 in my bank account

Thanks for visiting, and good luck to you!

Are you willing to work for it? This means, you have to put a little effort into it, and maybe sacrifice a little? No, or Yes No, I don’t want to work Yes, i am willing to work

Would you rather spend all your money paying interest? Or would you rather put your money to work for you and earn interest? Pay, or Earn Pay Interest Earn Interest

Would you rather have: 30 years of mortgage payments, or 12 years of mortgage payments 30 years of payments 12 years of payments

Would you rather have: $2, or $1,000 $2 $1,000

Let’s jump right in. Let’s see if you are ready to start your personalized Way to Wealth. First, let’s start off with some prequalification questions to see if this is for you. Would you rather have: $1, or $5 $1 $5

Compound Interest Example: Now, let’s say you’re going to need a little more time to repay the loan. Let’s say you need 30 years (typical mortgage) to repay it. $100,000 * 6.5% * 30 years So, your banker punches the numbers and says, “OK, here’s your monthly payment.” Monthly payment = $632.07 This is where most people stop. All they care about is the monthly payment. “Sure, I could afford that! That’s only $632.07 per month!” But are they looking at the big picture? Keep reading the…

Simple Interest Example: When you borrow money from the bank, they charge you interest. So, let’s say you borrow $100,000, and the bank says it will charge you 6.5% interest. $100,000 * 6.5% = $6,500. Principal borrowed: $100,000 Interest rate: 6.5% Interest: $6,500 Total repayment: $100,000 + $6,500 = $106,500 When you repay your loan to the bank, you will repay $100,000 (principal) + $6,500 (interest). So your total repayment will be $106,500. PREVIOUS NEXT

December 27, 2024 The day before the “Valero Alamo Bowl,” in a head coach press conference with Kalani Sitaki of BYU, Coach Prime of Colorado was asked alongside Kalani what one thing he would change about college football today is. He deferred to Kalani who gracefully answered that just as long as he could keep playing football, he is fine. Whatever they decide the rules are, he will follow and will be competetive. He wants to be on the cusp and a leader, but whatever they…