Starting a Mortgage Brokerage

For some reason, at the age of 14, I remember John and I talking about wanting to go in to business together some day. Then in 1998, at the age of 22, after some extensive research and training, John and I decided to open a mortgage brokerage together. At the time both of us had more ambition than money, so we had no choice but to pay for all of the startup costs on credit cards. But with the support of both of our wives, and putting in extremely long hours six days a week, after about 10 months from opening our doors we started to see what we thought were some pretty promising results. We believed that if we built a reputation for having the best rates and service, word would spread and good things would come from that. Gratefully, this proved to be correct.

In fact, word of mouth spread so quickly that after the first 10 months, we had no choice but to start hiring and training new loan officers as quickly as we could to keep up with the influx of new mortgage clients. Within our first 18 months of business, we brought on 28 new loan officers and eight new loan processors. Within our next 24 months, we had a total of 61 loan officers and 15 loan processors. Needless to say, we were extremely pleased with our company's growth. At the same time, while things were going very well for the business, John and I started to notice a very negative trend in our success: repeat customers.

What's Wrong with Repeat Customers?

Now you may be asking the question, "Why would repeat customers be a negative thing? I mean, repeat customers are a great thing, right? It's something all companies strive and hope for, isn't it?" Of course, the answer to that question is a resounding, Yes! However, the reason this was a negative thing for us, is that we were seeing some of our customers come back to us too often. Let me give you one example of what we mean.

Let me introduce you to a client we'll call Mike. One morning in August, 2001, I was checking daily loan rates like I normally did each morning, when a call came in from Mike. Mike was a great client who I had originally helped with a refinance and debt consolidation loan two years before. Mike was also a client who had come back to me for new debt consolidation loans approximately four times since the first time I had helped him. This time was different. When Mike called and asked if he could come meet with me for another debt consolidation loan, we set a day and time that worked best for him.

When Mike showed up right on time, I distinctly remember him saying "Hey Mortgage Doctor, fix me, again!" This comment left me feeling kind of slimy, as I knew I was helping this client get into more and more debt. While it was Mike's decision to spend all the money and make all the purchases that he did, I still felt somewhat responsible for providing him with debt consolidation loans that allowed him to dig himself deeper and deeper into a financial pit. This was not what we aimed for when starting our mortgage company.

So, I said to him, "Okay Mike, let's take a look at your situation." Mike then explained all the new debts he wanted to consolidate. Not to judge our clients, but the debts that he wanted to consolidate were very much like the previous debts he had us consolidate multiple times before: Jet Skis, a boat loan, motorcycles, etc. It's just fine if people want to purchase toys and find ways to lower their monthly payments on those loans, but Mike had been purchasing so many toys that it was sinking him financially.

After taking a look at Mike's new debts and reviewing his current financial status, things were not looking good for him. I wracked my brain to think of some solution that I may not have thought of yet to help Mike with his situation. Not only did he not have enough equity left to consolidate any of his new debts, but his debt to income ratio was completely upside down. After exhausting every possible loan angle I could think of, I had no choice but to tell Mike there was nothing we could do.

With an initial look of disbelief on his face, Mike's expression changed to a half smile as he said "Okay, yeah right. Seriously, tell me what you can do!" Sadly for Mike, I repeated that there was nothing we could do and explained why there were no options left to help him. Mike's expression immediately changed from a humorous half smile to a look of complete desperation and fear. Looking me straight in the eye, he said, "I have no idea what I'm going to do. I can't afford these payments. I could lose everything." I thought back to the first time Mike came in for his refinance/consolidation loan; he had over $150k in equity in his home and was in good shape financially. Now his equity was all but gone, and he was completely upside down financially. I couldn't help but feel I was partially to blame.

The thing is, Mike wasn't the only client with whom we saw this same scenario. Far too many people were coming to us, using their home like a piggy bank and then looking to us again and again to help them sort out the financial mess they had created for themselves. As much as we were happy to try and help people improve their financial situation to the best of our ability, we simply knew that there had to be a better way.

While it was very difficult to watch what some of our mortgage clients had gotten themselves into, it actually went much deeper than that on a personal level for both John and me. At the age of 13, my parents were experiencing deep financial stress. I remember the repo man backing into our driveway and hauling our family cars away. Shortly after, we had to move because our house was repossessed by the bank. Similarly, about one year later, due to his father being laid off, John's family's home was also repossessed. I remember that along with the financial difficulties both of our families were experiencing, there also came the marital stress and challenges for our parents. At that time, it seemed as though everything in our lives had been turned upside down. As you can imagine, as we saw what was happening with some of our mortgage clients, it instantly brought back those painful memories we experienced in our childhood. All of these experiences have had a lasting impact on both of us, and it is for this reason we have such an extreme dislike for unnecessary debt.

The Search for a Solution

John and I just knew there had to be some kind of a solution out there that could help these good people avoid some of the financial challenges they were experiencing. With all of the different mortgage and loan programs available, there had to be a solution that could help people better navigate their finances.

Accepting the challenge, in roughly August 2001, we set out to find the solution we knew had to exist. For several months, we researched different programs across the US that claimed to help people get out of debt, only to find out that these "solutions" either destroyed people's credit or were more like a band-aid on a broken arm. While some of these programs seemed like they could help people save some interest, they barely scratched the surface of the kind of solution we were hoping to find. We wanted to provide our mortgage clients with something that could help them avoid making the costly financial decisions they were making, before they made them. We wanted to provide them with a solution that could help them to better manage their finances and get them out of debt as quickly as possible. Unfortunately, the programs we were running into were simply inadequate.

Needless to say, with this realization, both John and I were, yet again, very disappointed. We thought we had found an option that could be life changing not only for our clients but for people across the country who wanted to safely pay off their mortgages early and save a significant amount of interest. Unfortunately, this idea and financial method was a complete waste of our time... or was it?

A New Approach

John, the Excel spreadsheet guru of the West, then laid out a puzzle of charts, reports and spreadsheets he had been working on for several months. He proceeded to explain that after running a lot of Excel spreadsheets and financial reports, in addition to talking with multiple CPA's and financial planners, he believed it was possible to allow homeowners to keep their low fixed first mortgage and use a separate line of credit option (referred to by us hereafter as an Advanced Line of Credit, or ALOC) to successfully drive the mortgage payoff strategy.

After John reviewed all the research he had done with me, it did in fact look as though he was right. Using a separate line of credit (aka ALOC) as a secondary tool, while keeping the first mortgage as a fixed loan, not only looked to be viable, but it appeared to work even more effectively than refinancing the first mortgage into a variable interest rate HELOC. The reason for this is that by having a low fixed interest first mortgage, you are still able to take advantage of the low interest rate on the bulk of your mortgage amount while also using a separate ALOC to float monthly expenses and cancel interest charges, similar in part to what homeowners in Australia and the UK were doing.

After looking at all the reports and information that John had gone over with me, one problem still remained. I voiced my concern to John, "While it does look like you are right, it also seems like it would be pretty difficult for the majority of homeowners to manage everything you just went over with me. That is, efficiently managing their finances with this concept between their first mortgage and a separate ALOC."

John agreed and replied, "It would not only be difficult to manage, but extremely time consuming each and every month, especially as income, expenses, interest rates and payments change. And if it's not managed correctly, the homeowner could miss out on a lot of the achievable saving's benefits, costing themselves too much interest on one side or the other." John continued, "That's why I have been looking into different software applications to see if it's possible to create a software program that can efficiently manage all of the complexities of this debt payoff strategy. The idea is, all the homeowner would need to do is log in occasionally and watch the program work." John then remarked, "We need to do more research, but I do think this approach is possible."

After a bit more discussion, John and I both agreed that it would be a good idea to investigate the possibilities of building the software platform.

Is it even Possible?

Over the next couple of months, John and I conducted as much research as possible to confirm what the savings benefits of this approach could be and to see if the software platform was a viable idea to efficiently and easily manage the debt elimination concept. Several of the CPA's and financial planners we spoke with grew very excited and intrigued once they had a chance to analyze the financial results we presented to them. They were actually shocked that they had never heard of anything like this before. After analyzing our data, they each stated that they felt the concept could work. With this positive feedback from outside sources, John and I became even more excited about the possibilities!

Now that we had established that this debt payoff concept could work, we needed to verify that it could be built into a software platform that could easily be run by pretty much anyone with a computer and internet access. So, we reached out to several people we knew in the tech industry. Going over the information with multiple senior software developers, we showed them exactly how this concept worked from our perspective. We emphasized that we would need the program to run all of the complexities behind the scenes, so all the homeowner would have to do is login, follow a few simple prompts, and let the program calculate and manage all the debt elimination strategies for them.

After several meetings with multiple software professionals, we confirmed what we had hoped: the concept could in fact be built into an easy-to-use software platform to help homeowners become debt free ASAP! While we were extremely excited about this news, our excitement dropped when we asked the developers how long they felt it might take to develop a program like this. They each responded with similar estimates: "If you want to do it right, it would take anywhere from 18 to 24 months. And that is if you have a qualified team of developers working on it full time."

"Wow!" we thought to ourselves, "here we are with the verification of this potentially life changing concept and we won't be able to help any of our clients with it for up to two years!" To say we were frustrated was an understatement. We had clients that needed this solution TODAY!

Early Prototype and Beta Testing

For the next month, John and I spent every day planning out the next steps necessary to get this exciting new project started. After a lot of discussion, and even though it would take a bit longer overall, we decided that the first step would be to hire a single programmer to build an initial prototype version of the software. We really wanted to get this right and felt that this approach would help us get a better idea of what the final version of the system should look like.

The initial prototype took roughly six months to build. Once completed, we signed up several dozen of our mortgage clients who had expressed interest in being initial test users. Following several months of testing with the prototype system, the results and feedback from our test group was fantastic. Their feedback helped us fine tune our approach and proved that the system could really work!

Now, with a clear plan, we worked with a head hunter in the IT industry to help us locate and hire the right team of programmers and other software development professionals. We also hired a mathematical engineer from GE Aeronautics to help make sure that all of the mathematical algorithms in the full version of the program worked perfectly.

Finally, after almost two years of development, and the investment of several million dollars, it was time to start Alpha testing the new system. Following several months of Alpha testing, tweaking, and adjustments, the new financial software system was ready to be Beta tested in the general public.

From years of providing Denver, Colorado residents with mortgage loans, John and I decided this is where we wanted to launch the Beta Test. After reviewing the details further, we also decided that we would run the test for one year, from January 1^st to December 31^st, 2004.

Most of the homeowners who participated in our one-year system test were also our mortgage clients. When we told them about the new system and how it worked, they were thrilled to participate in the Beta test. During that one-year test phase, we signed up roughly 400 homeowners on the new system. Throughout that year, we received many phone calls and emails from our clients expressing their excitement over the results they were experiencing. One of the most common calls we received during this time was our clients asking if their friends or family members could also get on the program and participate in the test phase. In addition, we also had clients sharing all kinds of experiences with us, one of which was truly unique.

About 10 months into the one-year test, one of our clients who we'll call Jane contacted us. Jane had called us several times throughout the year to express her excitement over how much the program had helped her husband and her pay down their mortgage and how much interest they had already saved. This time, however, was different. Jane told us that she and her husband had been trying to have a child for many years but were never able to conceive. Because of how much stress the program had taken off of their financial lives after just eight months on the program, Jane and her husband were finally able to conceive. Jane was literally crying on the phone as she explained this to us. I must say, with all the exciting stories we heard from our clients during that one-year test phase, we had never heard a story quite as memorable as this one.

Better than Expected Results

By January 2005, the month after our one-year test phase ended, we had accumulated a significant amount of test data. After careful analysis, the results of our Beta test were remarkable! With our test group of roughly 400 homeowners, we found they had experienced an average of 20% better results on their debt payoff and interest savings numbers than we had originally quoted them at the start of the program. We also found that many of our 30-year mortgage clients were now scheduled to have their first mortgage and ALOC, entirely paid off in as little as 5 to 7 years. These numbers were absolutely amazing!

In all reality, these results were significantly better than we expected during the one-year test phase. Using this system, we originally projected that the fastest payoff time for a 30-year mortgage would be around nine years. Now, one year later, the system showed that a good amount of the program users were on track to have their homes completely paid off in almost half the time we originally projected and to have saved approximately 20% more interest than we originally calculated! At this time, I remember John saying, "We need to double check these reports to see if we missed something. This can't be right." But, after checking the reports numerous times, John was able to confirm that the payoff time and interest saving information was correct.

We then decided that we needed to talk with as many of the program test users as possible. Over the course of the next few months, we called and emailed as many of the individual test users as possible to ask them about their experience using the program. We asked them questions about how they liked using the program, what feedback they had for improvement, and so on. We also asked them about their experience seeing even better results than what we originally quoted them. Their responses were actually far simpler than we expected. Almost without fail, each homeowner said something along the lines of, "After using the program for a few months and watching it work, I began to better understand how the program operates in relation to my money and my debts. I also started making smarter financial decisions without even noticing changes in my day to day spending habits. I would see the time and interest on my debts dropping faster and faster which was even more motivating." Our clients further stated, "It's like I had a built-in financial planner showing me the simple little steps I could take to get ahead financially without feeling any change in my lifestyle. It's the strangest thing, but it's been amazing!"

Public Launch

After speaking in detail with hundreds of our Denver homeowner test group, it became very evident that the next step was to begin launching the program to the general public, however, with a controlled release. This would limit the number of users to just a few thousand homeowners who could sign up on the program throughout the rest of that year (2005). This way, we could continue to make small tweaks and adjustments as necessary to improve the program without having to disrupt a large customer base.

Over the next few months, we launched a limited marketing campaign intended to inform homeowners about this new program that could help them eliminate their mortgage years ahead of schedule and save them thousands of dollars in interest. While we intentionally limited our marketing efforts, the response we received was overwhelming to say the least! In fact, the response was so strong that we had to temporarily discontinue our marketing efforts, so we could boost our internal company infrastructure to handle the barrage of new client enrollments!

As a result of the success of our limited release to the general public, our path forward became clear. In July 2005, we began working through the details necessary to prepare for the full public release, which we scheduled for January 2006. Then, for the last half of 2005, we went on a significant hiring and training spree: we hired the very best managers, IT staff, support personnel, marketing reps, trainers, accountants, etc. We also expanded our technology and support infrastructure realizing that if the full public release was going to be anything like our limited public release results, we would need to be well prepared to support it.

By December 2005, because of the success we experienced with our limited public release, we had to move our operation to a much larger facility that could better handle our future growth. With the establishment of a state-of-the-art IT infrastructure to support our technology, and with the hiring and training of the new staff, everything was in place and ready for our official public launch.

On January 9^th, 2006, we slowly began rolling out our marketing efforts to help educate homeowners about our new financial software system. I have to say, the first six months were a little bumpy. Between training and refining our support center, and trying to help people understand how it is truly possible to pay off their mortgage in as little as 5 - 7 years without changing their lifestyle, we had a significant learning curve. Nevertheless, we knew what the program could do, so we kept at it by making the needed adjustments to best inform and support our clients along the way. Finally, around July of 2006, things really began to run like a well-oiled machine. It was like someone flipped a light switch on and things took off like a rocket! Almost overnight, we went from enrolling an average of 300 clients a month to 2,000+ clients a month! To say things had taken off was a tremendous understatement!

An Unexpected Call

A little over a year later, in August of 2007, we received an unexpected phone call from one of the largest banks in the country. We had sent a large number of our financial software clients to this bank over the past couple years to obtain their ALOC. The individual who called informed us that the top VP of his bank wanted to fly out to meet with us. When the VP flew out the following week, we sat down with him in one of our conference rooms and right away he told us that the clients we had been sending to his bank over the past couple of years were the best performing ALOC clients they had ever seen. As such, he had two questions for us: "First, what are you guys doing? And second, how are you doing it?"

We spent the next 30 minutes explaining the main points of what our company does and how the program works. After hearing our explanation, he slowly sat back and said, "If you really have what you just explained to me, you will absolutely change the mortgage industry in America!" Needless-to-say, with a statement like this coming from the VP of one of the biggest banks in America, we were very humbled.

The Recession

Over the six months following the meeting mentioned above, new clients continued to sign up in droves! We were literally exhausted just trying to keep up with all the new enrollments. Then, seemingly overnight, around March of 2008, we started to feel the effects of the recession and saw a significant decrease in our new client enrollments. Because of everything our existing clients were seeing and hearing on the news about the recession, many of them were in panic mode. However, a few months into the financial crisis, the purpose of the calls coming in from our clients began to change; they were now calling to tell us how grateful they were to be on our debt elimination program. Many shared that they didn't know what they would have done had they not been on the program. They told us how much mortgage debt the program had helped them eliminate, and how much money it had helped them build up in their bank accounts. Their stories were inspiring to say the least.

While the recession did slow our business down significantly, it also helped us tremendously. The recession helped us see, from multiple new angles, how we could engineer the program to be even more effective regardless of what the market was doing. It also helped us structure our company to be more efficient. Since that time, we have opened multiple different companies and distribution channels to better facilitate the needs of consumers across the country looking to get out of debt and build wealth.

The Advanced Line of Credit (ALOC) Method

(Our Approach)

Now that we have reviewed the basic details of how interest is charged on a traditional mortgage and how the first mortgage HELOC method works, let's talk about a safer, more effective option to help homeowners pay off their mortgage and other debt in as little as 5 – 7 years.

As discussed in Chapter 2, instead of advising homeowners to refinance their existing fixed first mortgage into a variable rate first mortgage HELOC, we created a specialized financial software program that assists homeowners in utilizing a separate line of credit (which we refer to as an Advanced Line of Credit or ALOC) alongside their existing first mortgage to help achieve the same, or often better, time and interest savings.

The ALOC Method provides the same benefits as the First Mortgage HELOC Method, in that:

• An ALOC operates as a revolving, or "two-way-door" account, meaning money can be deposited in and drawn back out any time you need to pay expenses.
• Interest is calculated based on daily interest; as your deposited income sits against your line of credit balance, interest charges are reduced and you save interest.

However, the ALOC Method differs from the First Mortgage HELOC Method in two important ways:

• There is no need to refinance your existing first mortgage into a first mortgage HELOC because the Advanced Line of Credit (ALOC) works alongside your existing mortgage.
• Homeowners retain their low fixed first mortgage rate and are protected from periodic rising interest rates.

How the ALOC Method Works

The Basics

In its simplest form, you use your ALOC (Advanced Line of Credit) as your checking and savings account. You literally pay all of your expenses from, and deposit all of your income against your ALOC.

When monthly expenses come due, you pay them from your ALOC. Then, each time you get paid, you deposit your income against your ALOC balance.

As the system analyzes your financial information, it automatically calculates it's financial strategies for you and tells you exactly when, where and how much to pay from your ALOC toward your mortgage, and/or other debts, to achieve the greatest time and interest savings for your unique financial scenario.

Then, any money you have left over after paying your monthly expenses each month, continues to sit against your ALOC, continually reducing your daily line of credit balance, which further cancels interest charges, until you need that money for future expenses. And the longer you allow your money to sit and accumulate against your ALOC balance, the more time and interest you save.

As the system continues to repeat this custom cycle of deposits and payments in and out of your ALOC throughout your accelerated payoff time frame, you get the best of both worlds. Because of the ALOC "two-way-door" feature, you're able to continually deposit your income against your ALOC, thus keeping your daily balance nice and low, cancelling out time and interest charges. Plus, you always have 100% access to your money any time you need to pay expenses through checks, debit cards and/or online access.

Through this simplified deposit and payment process, you are able to cancel out significant interest charges on all of your debt with the same money that would normally just be sitting in your checking and savings account earning you close to zero interest.

Our Financial Software is What Makes it All Work

The key to achieving the ultimate time and interest savings with the ALOC Method is in the specific amount, timing and destination of each of the strategic transfers from your ALOC to your mortgage and other debts.

In Chapter 5, we'll go into more details on how these strategic transfers work and the calculations our software makes to ensure you the best possible results. For now, just know that our financial software system is specifically programmed to easily manage and run the ALOC (Advanced Line of Credit) method for you with ease.

While our software intentionally does not touch your money, it will create a customized, easy to follow financial map that we call your Action Plan. This customized plan prompts you when, where and how much money to transfer from your ALOC to your mortgage and/or other debts, based on your unique financial situation. Your action plan takes into consideration all of your financial information and analyzes it in real-time, 24 hours a day, 7 days a week. The system is programmed with the primary goal of saving you as much time and interest as possible on your mortgage and other debts, without having to change your lifestyle.

To generate your unique Action Plan, the system looks at all of your debt terms, loan amounts, payments, and interest rates—fixed or variable. The system also considers the frequency and amount of all of your income and expenses. All of this information is forecasted many years into the future to ensure that your debt strategy pays off all of your debt in the fastest and safest way possible, and also ensures that you have an adequate emergency fund to cover any expenses that you may not foresee.

In addition, your Action Plan automatically recalculates, to your greatest advantage, each time any detail about your finances changes. In this way,your action plan is much like a GPS navigation system which recalculates your route any time you make an unexpected turn along the way. Just like a navigation system in your car, our software will always tell you exactly how long it will take to reach your financial destination and exactly how to get there. This information is all shown in your customizable dashboard at the top of each screen in the program. It shows you how much interest you have saved thus far, how much additional interest you are scheduled to save, and how much longer you have before you will be completely debt free!

With this information always front and center, you can easily see the results (both good and bad) of every financial decision you plan on making, before you make them, giving you complete confidence and control over your finances.

When we first set out to create this program, our intent was simply to provide a tool to help people manage the ALOC Method to get out of debt as quickly as possible. However, our financial software has become so much more beneficial as it literally helps you take back control of your financial future and, as we'll show you in Chapter 6, helps you convert your canceled debt payments into tremendous wealth!

The best part is that all of this is available simply by logging in to your program a few times a month and following a few simple prompts. From there, you simply sit back and watch your debt melt away and your potential wealth build, right before your eyes. It's that easy!*

Our Financial Software Gets Better Every Day!

In order to deliver the greatest time and interest savings results possible, we continually reinvest in the program to make it more efficient, more user friendly, and more capable. While the first release of our program was extremely successful in helping people pay off their mortgage debt, each version since 2008 has been engineered to allow homeowners and non-homeowners to pay off all of their debt. That means that now, in addition to paying off your mortgage on your primary residence, you can also rapidly pay off auto loans, credit cards, student loans, mortgages on rentals or vacation homes, signature loans or any other type of debt you may have! The system works for virtually anyone with debt.

Moreover, with the latest version of our system, we have developed additional strategies that can work effectively for people who may not qualify for an ALOC because of a lack of equity in their home or because of poor credit. So, even if you have no mortgage, no equity and/or damaged credit, it doesn't matter. The system can help you to eliminate any and all debt, with ease.

Perhaps one of the most exciting new features of our system, is that it is now specifically engineered to help you rapidly build wealth with the same money that the system helps you to cancel out in interest payments! (Again, we'll cover wealth building more in Chapter 6).

Example 1: Certificate of Deposit (CD)

To start, we'll use an example that most people are already familiar with: a high-yield certificate of deposit (or CD). While building wealth in a CD may not be our most lucrative example, it is a strategy that works well as an introductory example of the kind of wealth building that is possible once you no longer have to make monthly interest payments to the bank.

Let's turn your attention again to our example family, the Smiths. Using our system, the Smiths will pay off all of their debt, including their 30-year mortgage in just 5 years and will have already saved over $214,000 in interest payments. Now they would simply like to stash away the $1,520 that they no longer have to pay in mortgage payments into a simple CD that pays a guaranteed 3% rate of return.

The Smiths could produce $677,959 over 25-years with a simple CD.

Graph 6.1

Instead of paying $1,520 to the bank every month for 30-years just to pay off their home mortgage, the Smiths could be completely debt free in as little as 5-years and have over $677,000 in a retirement nest egg within the same amount of time it would have taken to pay off their mortgage and other debts on their own! And this example is only using a 3% rate of return!*

Example 2: Rental Properties

Now, let's move on to some of the more exciting wealth building examples that our system could help you to achieve with the same money you no longer have to pay your lenders in interest payments.

Did you know that Real Estate is one of the oldest and largest wealth building industries in the world? In fact, over the last two centuries about 90% of the world's millionaires have built their fortunes in the real estate industry. If you want to become wealthy, then why not direct your focus toward what the wealthy do?

Let's take a look at how the Smiths could use the program to build an income-generating Real Estate Empire! Remember that over 30 years, the Smiths would have paid nearly $252,000 in interest charges on their mortgage and other debts; however, with our financial software system, the Smiths will be completely paid off in only 5 years and will pay less than $38,000 in interest. That's not only saving 25 years of debt payments, but also saving over $214,000 in interest payments.

Once the Smiths got started on the program for their primary mortgage and other debts, they wondered what it would look like if they also invested in a rental income property and secured a renter. So, the Smiths logged in to their program and entered the mortgage amount of $225k for a new rental property, with a rental income amount of $1,400 per month. The program then calculated its financial strategies and showed that both the Smith's primary mortgage and their new rental income property could be completely paid off in a total of 7.7 years!

After seeing the benefits of what the program could do with just one rental property, the Smiths wondered what adding a second $225k rental property would look like, again with a rental income of $1,400 per month. Adding the new mortgage for the second rental property and the second rental income of $1,400 per month to their program, the system showed that both their primary mortgage plus rentals #1 and #2 could be completely paid off in just 9.7 years. "Amazing!" they thought to themselves. Not only were they excited about owning two rental properties, but they loved the idea of increasing their income by $2,800 per month!

Well, of course, the Smiths then thought, "If we can get these results with two properties, what if we added more?" Keeping it simple, they added another $225k rental property with a rental income of $1,400 per month into the program. By following the program, the Smiths realized that all of their properties, including their 3^rd rental, could be paid off in just 11.5 years!

With the addition of another, identical 4^th rental, the Smiths found that it could be paid off in just 12.8 years. And a 5^th rental, in just 14 years. They continued this process up until their 15^th rental, which could all be paid off, including their primary mortgage, in just 20.4 years! That means their primary residence, plus the 15 income generating rental properties, could all be completely paid off approximately 10 years earlier than they would have paid off their 30-year mortgage on their own without our financial software system!

In summary, the Smith's monthly income could grow by an additional $1,400 per month each and every time a rental property is paid off, and their total residual income could increase by $21,000 per month by the time their 15^th rental property is paid off. The benefits do not end there: The Smiths would have accumulated a rental real estate portfolio valued at over $3.3 Million, without adding a penny in real estate appreciation on those properties.

Example 3: House Flipping

Rental properties may not be the right fit for some people. They might prefer to purchase properties and flip them for a quick profit. The problem is, they may not have the money or equity available right now to invest in a "fix and flip" property. No problem! Let's take a look at another wealth building example using our program.

Using the Smith family example again, they have a standard 30-year, $300k mortgage at 4.5% interest. But by using our program, the Smiths will have their mortgage and other debts paid off in just 5 years, and save over $214,000 in interest payments.

Three years into using the program, the Smiths decide that they would like to look into purchasing a "fixer upper" property to renovate and flip to make a profit on. So, the Smiths started looking into possible properties to purchase and found an awesome deal on a foreclosed house. The purchase price of the house was only $97,000! But there is one problem, the banks won't lend on it because it needs renovations to bring it back up to lendable condition. In other words, the Smiths would have to pay cash if they wanted to purchase the house.

After exploring the costs to renovate the property, the Smiths found that the repairs on the house would be $24,000. Thus, the total cost of purchasing and renovating the house would be $121,000. Talking this over with a realtor, the Smiths learned that once renovated, the house could sell for around $200,000. At this point, the Smiths grew very excited when they realized that by using the program, they had already reduced the balance on their primary residence by $141,918, and they had plenty of equity on their ALOC to purchase and renovate the property!

The Smiths decided to purchase the property, and in just over four months, they had completed all of the renovations and the house looked brand new! Shortly thereafter, the Smiths listed the house for sale, and within a short period of time, the house sold for $200,000. After realtor's fees and closing costs, the Smiths made a $65,000 profit!

Wow! In just four months, the Smiths made a $65,000 profit on that one sale! And by using our program, they paid down another $8,000 in principal over the last four months on their primary mortgage. That means that with $149,918 in equity in their primary home, and $65,000 profit from their flip, they now have $214,918 that could go toward another property flip. Imagine the potential if they continue to repeat this process over the years!

At this point you probably have a pretty good idea of where this example is going. By using the program, the Smiths are now able to take advantage of real estate opportunities that they otherwise may not have thought possible. Rather than making debt payments for the next 30+ years, they are able to build significant wealth through real estate which could provide them with an extremely comfortable life all the way through their retirement years.

Example 4: Converting Debt to Income™

While real estate investing can be an exciting and lucrative way to build personal wealth, it may not be for everyone. If you're like a lot of people, you may wish you could get similar wealth building results with a more "hands off" strategy. Maybe you would simply prefer to put the money our system helps you to save in debt payments into a wealth building account, and somehow turn that money into real wealth. We've already shown you how you could do this with a certificate of deposit, or CD, but the results really don't compare. Or, if you wanted, you could also put all of your debt savings into an IRA or 401k, with your funds invested in the stock market and get potentially better returns than a CD. However, this option comes with added risk. If the stock market crashes, especially if you are close to retirement, you could lose everything.

Fortunately, there is a little-known wealth building strategy that has been used by the rich for decades, without the risk of losing money! When the market goes up, so do your returns; and, when the market goes down, you are guaranteed not to lose a penny in principal. In addition, this strategy can also be used to generate tax-free monthly income for life! No wonder the wealthy keep getting wealthier!

We call this the Converting Debt to Income™ strategy, and it is no longer just for the wealthy. Based on historical performance, this strategy could provide eligible consumers with an average return of between 7% to 10% on the money the Money Max Account helps them to save in debt payments.* And similar to the ALOC, this wealth building account also comes with a "two-way door" feature, where you can put money in and draw money back out as needed, allowing you to be as aggressive with your wealth building as you choose.*

This wealth building strategy enables eligible consumers to convert the payments they will no longer have to pay their lender in interest, into interest earning income, that is 100% tax free and payable for life.

Referencing graph 6.2 below, remember that the Smith family was scheduled to pay $251,960 in interest payments alone ($575,850 in total) over the remaining 30 years on their mortgage and other debts. Under the Converting Debt to Income™ strategy, the Smiths could now have all their debts completely paid off in as little as 5-years and have almost $1.1 million dollars built up in their wealth account in that same amount of time. Over the Smiths' life expectancy, they could have nearly $2 million dollars built up in their wealth account and earning tax-free monthly income for the rest of their lives!*

The Smiths could produce $1,094,860 over 25-years.

Graph 6.2

In comparison, the Converting Debt to Income™ strategy is far more beneficial than making debt payments over 30 years, with the $251,960 in interest cost and no tax-free income.

The Vacation Home

Moving on to our next example, let's say that after the Smiths had been using the program for one year, instead of buying rentals or investing, they decided to explore the option of buying a vacation home. Having always loved vacationing in Kissimmee, Florida for its close proximity to the beach, Disney World and other fun attractions, the Smiths searched for properties with a realtor in the Kissimmee area. Here, they found that they could purchase a nice four-bedroom house in a great location for $295,000. The realtor explained to the Smith family that their real estate agency has a property management division that manages vacation rentals. The realtor further explained that the house they were considering was in a very popular vacation area. Their realtor then told them that they could potentially rent out their vacation home for $300 - $400 per night, when they were not staying there.

Fond of this idea, the Smiths ran all of this information through our program to see what the potential payoff results could be. The Smiths found that a standard 30-year mortgage payment on their new vacation home would be approximately $1,694 per month, including taxes and insurance. Then, based on their realtor's feedback, they calculated that they could potentially rent out their new home for an average of $350 per night, with a 60% annual occupancy rate. Annualized, this would equal approximately $6,387 per month in rents. After a 10% property management fee for keeping the property rented and maintained, the Smiths could earn approximately $5,748 per month on their vacation home.

"Wow!" the Smiths thought to themselves, "After subtracting our new monthly payment of $1,694 and the monthly property management fees of $638, that would earn us around $4,055 per month in rents on this new property!" Furthering their analysis, the Smiths noticed how quickly the program could help them pay off their new vacation home and realized that they could have their primary residence and their new vacation home paid off in a total of 8.4 years, saving an additional $189,718 in interest payments on their vacation home!

In summary, the Smiths would not only have their primary residence paid off free and clear in just 5 years, but now they could have a vacation home paid off in an additional 3.4 years, saving an additional $189,718 in interest payments. Never looking back, the Smiths decided to purchase their new vacation home and have been thrilled with their decision.

The New Boat

Two years into using the program, the Smiths were shocked at how quickly the program was paying down their mortgages and other debts. This got Mrs. Smith to thinking: she had always wanted a boat to take the kids onto the lake for some family fun in the sun. After discussing this idea with Mr. Smith, they started exploring various boat purchase options.

After looking for several weeks, the Smiths found the perfect boat for their family. Before they made their buying decision, the Smiths wanted to see what this purchase would do to their overall financial scenario and debt payoff time. Using the program, the Smiths entered the new boat purchase price of $20k and discovered that it only increased their total debt payoff time from 8.4 years to 8.7 Years.* "Wow, only three months longer!" Mrs. Smith exclaimed.

The Smiths couldn't believe it when the program showed how quickly everything, including the new boat, could be paid off! After consulting with each other, the Smiths decided that the increased payoff time was worth all the fun the family would have together. So, they decided to complete the purchase of the boat.

The Hawaii Vacation

After a summer full of boating fun with the kids, the Smiths felt they could use a vacation for just the two of them. Researching how much a nice 10-day vacation to their favorite Hawaiian island would cost, they found an all expense trip for about $6,000. With an understanding of the benefits that come with our financial system, the Smiths entered the vacation cost of $6k into the program and found that it only increased their total debt payoff time by one month, from 8.7 years to only 8.8 years.* "That's amazing!" they said to each other.

So, the Smiths booked the Hawaiian trip and they had the time of their lives!