“Just pay extra on your mortgage that is all this thing shows you how to do. There is no magic… STUPID program”
Good morning potatochip77. Most people think as you do and it easy to come to that conclusion. First of all you are right in that there is no magic..it’s just math. When someone pays extra on their mortgage can you tell them how much time was saved, how many mortgage payments eliminated and how much front-loaded interest they just cancelled? If not… then how do we know we could not have received a better result (more time more interest saved) if we had done something slightly different.
I had a client just tell me that he was under budget on his groceries by $4.36 our system directed him to put that small amount of money on the right debt, in the right month and on the right day of the month and our system indicated that he would save an additional $35.00 in interest he would not have saved if he decided to use that money to treat himself to a burger and fries.
We are not just telling people to pay more…you don’t need a computer for that. You do need a computer to calculate opportunity cost.
op·por·tu·ni·ty cost
noun ECONOMICS
{The loss of potential gain from other alternatives when one alternative is chosen.}
Here is another story from one of my clients this week. They received instructions to take a lump some from their savings account that has been building for the last 3 months, at our direction, and apply that money to one or their debts on a certain day of the month. They wondered why the PILL Method Financial Robot did not instruct them to put the money from savings towards a debt that had an interest rate of 27.5%. So they elected to follow their intuition and paid off that debt. At our next meeting they told me about the dilemma and the course of action they decided to take. I then showed them on an amortization schedule that the loan they elected to pay, even though it was a whopping 27.5% interest rate, that the interest cost this month on this loan was only $9.90 cents. If they had chosen the loan the Robot had chosen even though it was a 2.7% interest rate, because of the balance on that loan, it carried a $117.00 interest coast this month. So their Opportunity Cost Lost with that course of action was $107.10.
I even showed them that if they would follow the course promoted by most financial guru’s…the next financial move they would have taken would cost them $2000.00 in unnecessary interest cost!! So in closing the focus of our program is not paying off your debt it is saving the absolute most money we can in front-loaded interest by our optimization technology therefore eliminating debt faster is…a by-product.
Remember you can’t optimize what you can’t measure. And we are conditioned by the financial establishment… Not to measure!
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