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Robert Kiyosaki and Suze Orman Celebrity Death Match

I seriously think Bob and Suze need to put on the boxing gloves step into the ring together and have it out...

Here you have two extremely popular mainstream, "Pop culture" financial advisor, icons spouting their own versions of "financial freedom" and the "truth about debt". They both sit at the opposite ends of the spectrum in their views on money, Debt and investments...

So who is right?...Who is wrong?

Personally I dislike them both....More accurately I dislike both of their methods and advice....But if I had to pick, I probably would sit on the "more conservative" side and go the Suze Orman route. Although I do think Suze is, most of the time, just spouting a bunch of "good sounding" generalities that seem like common sense.

I think Suze speaks with her certainty, and forceful confidence more as a selling point for all the "Kool-aid" drinkers out there that listens and follows anyone that speaks with enough confidence...Don't get me wrong, some of her advice is sound and just plain common sense, but I just think sometimes she speaks about things that she really has little knowledge of especially when it comes to Mortgages and loan programs, and indices that certain loans may be tied to and why that is important....

Suze over compensates and errors on the side of caution to protect her reputation and the "kool-aid" drinkers she markets her wares to.... I can understand this approach, but this does not mean I agree with her advice even 25% of the time.

I can appreciate Suze Ormans tendency to be a little financially conservative but sometimes I think she participates in a little "Financial Fear Mongering" on topics she obviously knows "little" about,...specifically Mortgages.

Robert Kiyosaki on the other hand almost borders on "financial reckless abandon". He advocates the approach to run up debt to increase cash flow and to use the liquidity from running up debt to make investments.

Mr. Kiyosaki is a believer in the mindset, which a lot of your more traditional Financial planners out there share, that you should always have a mortgage on your home and be taking the tax benefits...Robert also seems to like the idea of taking an "Option Arm" program and doing the minimum "Neg Am" payment and investing the difference of what you would be paying towards a more traditional type 30 year fixed mortgage.

I can't even begin to express how much I shudder at the advice Mr. Kiyosaki gives...What is scary is a lot of "mainstream" financial planners agree with him.

Me, well,...I tend to fall more in the middle between Suze and Robert. I believe most people probably fall in this "middle" area.

First, I think you should always focus on completely paying off the mortgage on your primary residence as quickly as you possibly can. Forget about the tax benefits that come from having a Mortgage...Why the heck would you pay a bunch of interest up-front, just so you can write off the interest on your taxes and hope you can get a bigger tax return at the end of the year?...Just does not make sense to me...Why not just remove this complete waste of time from the equation all together and just pay off your mortgage as quickly as you can....Not too mention that the IRS can decide to pull any tax benefit on owning a home at anytime...I just don't like putting that control in someone else's hands....How about you?

Second, Why the heck would you take a "Neg Am" mortgage, on your primary residence, make the minimum payment and invest the difference?...Now if you have the strict discipline to be able to invest the difference this might actually work, but at best, the problem still remains, that you are still gambling on the future performance of what the market is going to do that you are investing in.

Do you realize that by "Contract" the most a financial planner can guarantee as a return on your money is 3%? Now do the math, when it comes to doing a "Neg Am" payment and investing the difference and see if this approach is really that good of an idea.

Personally I like to have control and NOT put my "faith" in anything, if I don't have to, especially when it comes to money and the future security to my family and me...But thats just me...I've been called a 'Control Freak" more than a few times in my life.

This is why I like the "Money Merge Account" (MMA) method of paying off your first mortgage as quickly as possible without affecting your monthly cash flow.

What is an MMA?

The Money Merge Account consists of three major components:

1. Your Existing Primary mortgage

The existing mortgage on your home is the foundation for the Money Merge Account.

2. An Advanced Line of Credit (ALOC same thing as a 2nd position Home equity line of Credit)

The MMA Program uses an advanced equity line of credit as a vehicle or a tool to drive the program. The equity line of credit must have the capacity to operate similar to a primary checking account and be set up with an open-end interest calculation vs. a closed-end interest calculation. Combined with the MMA web-based system, this creates a formula in which the money in your line of credit account generates an interest cancellation on your primary mortgage.

3. MMA software

The online MMA system makes a connection between your bank account, the advanced line of credit and your primary mortgage. Each time you deposit income into your account, it registers as a decrease to your mortgage balance. By decreasing your mortgage balance you now lower the balance in which interest accrues. By decreasing the balance in which interest accrues, you increase the portion of your monthly payment which is credited toward your principal pay down. The algorithms in the proprietary MMA system are systematically programmed to create the highest interest savings possible in the least amount of time.

In short, an MMA is basically getting a smaller second position "Home Equity Line Of Credit" or HELOC on your home and use this HELOC as you would use your regular checking account by cycling your income through it (direct deposits and what not). Since HELOCs use "open ended" interest calculations you can use this to your advantage by canceling the interest on the "Closed-ended" interest calculations on your current "first" mortgage and making some accelerated and "compounded" principle pay-downs in the process.

A HELOCs payment is also based on an "Interest Only" calculation on what ever the average daily balance is of the Line of credit. It is assumed if you are cycling your income through this line of credit not only is the HELOC payment automatically made for you but the amount of interest that is charged is minimal because you are constantly keeping the total drawn amount on the line at a very low level. Compare this concept to a fixed second mortgage and see what you come up with...Go ahead do the math.

You always will have access to your income and cash flow based on the HELOC being an open ended line of Credit that you can draw upon at anytime.

You get the best of both worlds using this approach. You get to pay off the biggest debt you will probably ever have (your home) in less than half the time and you still have access to your cash to invest as you would like to so you do not miss any great investment opportunity that may come along.

Using a "Money Merge Account" (MMA) as a financial planning tool gives you back control. It is a known as opposed to an unknown, which is the territory that most "traditional" Financial planners roam.

Now using the MMA concept does take some discipline. It does you NO justice to constantly run up the MMA account on frivolous purchases that you would not normally make if you did not have the MMA.

Your Home is NOT a credit card and an MMA should NOT be the vehicle to treat your home like a credit card. But, with this being said, I challenge you to compare this level of discipline that is required to effectively use the MMA against the discipline that is required using a "Neg am" option ARM type payment loan and investing the difference which is spouted by Mr. Kiyosaki and some of your more main stream financial planners.

Now, because I personally like the MMA concept this is where I diverge from not only from Robert Kiyosaki but Suze Orman as well.

Hell, I remember Suze Orman spouting here usual "fear mongering" about the dangers of "Home Equity Lines of Credit" HELOCs saying that if you miss a payment on a HELOC you will lose your home. Jeesh, that's a little bit of an exaggeration. The problem people run into when they use HELOCs is that they tend to treat them like a credit card secured by their home. This is the absolute wrong approach and is nothing what the MMA method advocates.

So back to the original question...Who is right who is wrong?...If you'd ask me I would say Both Robert and Suze are wrong because they are not understanding the "wide scope" implication of what they preach to the masses. I would also say there are certain financial concepts that both are unaware of that they might actually both agree with.

Not everyone will fit into any "cookie cutter" financial plan. A lot of it comes down to style, comfort levels, discipline, and personal financial tolerance...in essence "Different Strokes for Different Folks..."

My only point is not to believe anyone "blindly" just because they may be popular or speak with confidence. Investigate for yourself what may be the BEST course of action for you based on your own personal financial situation and goals...

In the mean time I will see if I can arrange that Celebrity death match between Robert and Suze, You interested in buying tickets to watch?..... ;)

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Keith Gill is a Successful Certifed Mortgage Consultant and Loan Officer for a major mortgage bank. IF you would like to Contact Keith or learn more about the "Money Merge Account" method of paying off your current 30 Year Mortgage in less then ten years just got to http://www.LoanAcceleration.net

Posted by Keith Gill on 03/06/2007 02:25 PM

Comments (52)

money merge account, mma, mortgage, robert kiyosaki, suze orman, rich dad poor dad, option arms

52 Comments on Robert Kiyosaki and Suze Orman Celebrity Death Match

MAR

2007

I would love to see that death match. I think the MMA are great, I still have some questions about the software involved.

MAR

2007

First, I think you should always focus on completely paying off the mortgage on your primary residence as quickly as you possibly can.

This is a DANGEROUS assumption... and it is wreaking havoc throughout the currently retired generation.

it is a MYTH that your house should be 100% equitized and a dangerous place to put our generation that is not saving money at all...

don't forget... Real Estate is NOT a Liquid Asset...

Kiyosaki mainly preaches liquidity in the face of the cheapness of money... he also comes from a rock-bottom mentality when he made decisions because his financial situation could not get any worse. Suze Orman sits on her high horse and reads MSN money reports telling that people are up to their eyes in debt.... the thing she has lost focus of is cost of living and cost of money! Cost of money is PRESENT VALUE, FUTURE VALUE And OPPORTUNITY COST COMBINED...

David, it is only a "Dangerous Assumption" if it is not tempered with common sense. I still advocate doing monthly investments as usual....The MMA does NOT affect your monthly cash flow so you can still invest and save like you normally would.

This is the beauty of the MMA. You are paying off your Mortgage in less than half the time most times without affecting your current cash-flow....And say you pay your mortgage off Completely in 8 years instead of 30... just think of all the availiable income you will have to increase your investment after year 8 and beyond...

The home is usually the largest investment and what takes the biggest chunk of your monthly income...If you can eliminate the time you are paying this monthly expenxe by less than half and then have that freed up income to invest completely..where the heck is the problem?...Why would you want someone to stay in debted to a mortgage pay hundreads of thousands more in interest over a longer period of time when this can be paid off in less than half the time without sacrficing more from your monthly cash flow to do it....

David, It is o.k. I could not quite get my head around the concept at first either...I thought Just like you...But untill I really saw the numbers and and took this too it's logical conclusion....

AN MMA is not about making extra principle pay downs taken from your already strapped monthly cash-flow...It's more about using open ended interest and canceling the closed ended interest on your first mortgage.

Why should anyone have to pay more total interest than they have to?...Why should anyone have to stay in debt longer than they have to?

http://www.LoanAcceleration.net

MAR

2007

What if you already have a HELOC as a 3rd position? Can the MMA still work?

Robert would win. Thats who I would put my money on.

Good Day!!

www.duayneweir.com

THis is for Mike,

3rd Position Heloc?....I am sure it may still be able to work if it is a true HELOC, is open ended, has an interest only payment option...But in all honesty it may make more sense to just consolidate the current second mortgage into a 2nd position Heloc and utilize it that way....

KEith

MAR

2007

based on the current new.s... I think Suze Orman is getting slammed by the press.. makes Kiyosaki's job easier!

MAY

2007

Either discipline will allow the MMA to work.

It's all a matter of the desire on the prospective client to educate themselves, then simply do something about it. It ain't magic folks its math. I think its going to reinvigorate the real estate market by allowing savy investors to pay down properties faster than ever.

the trick is you can't spend more than you earn...that is something that every american family need be aware of...Suze has some good points for the reckless spenders to help curb their debt....Robert is a fearless leader...two different schools....both are right each caters to a different mindset...

Here is the real difference. Suze makes her money selling books to poor people that cannot manage debt properly...so they should eliminate it...like an alcoholic eliminating alcohol. Roberts opinion is to just go for it. Missed Fortunes 101 by Douglas R. Andrew explaines why not to pay off your house and Robert is right about that. Run the numbers...even conservatively. Then call Lance vennard at World Financial Group in Mesa at 1 No. McDonald Pkwy ( 480-355-2424) and get the real truth from a professional Financial Advisor. Tell hi Chuck in Washington state sent ya.

By the way, do you understand the difference between simple interest and compound interest. An understanding of the "Rule of 72" would help with the quick math calculation. You can look it up under rule of 72 or Albert Einstein on the web. If Wal-mart moves into your town and the town turns into a "Ghost town" How much is your house worth?

MAY

2007

Chuck we know that there are two kinds of people in this world, those who pay compounded intrest and those who collect it. I actually believe that Albert Einstein called componded intrest the 8th wonder of the world.

The MMA account allows homeowners no matter what level of financial education to take a proactive standpoint without the assistance of a CFP ( Certified Financial Planner ) to manage their expenses and income for them.

In the information age the DIY ethic ( Do It Yourself ) permits us to grow up and take charge of our own affairs.

Chuck, why be one of the sheep of today when in 10 years you don't have to worry about keeping up with the Jonses because you'll likely be their landlord.

Increase your peace of mind, evaluate the MMA and call on your local agent to run an analysis for your primary residence or investment property. It doesn't cost a thing and you will definately learn a few new tricks used by the mortgage industry. We show you how to use bank math to your benefit.

anyone in search of more info ? feel free to contact me u1stFlorida dot com

MAY

2007

They both are salespeople...meaning that they are influential enough to get ordinary people to buy their books. No matter who you cheer for, you have to DO something once you are motivated by a book or a TV show. If you're motiated by Suzie, then stop wasting your money and concentrate on paying off your debt. If you're motivated by RK, get out there are start learning how to find good deals and UNDERSTAND how real estate works, and how it can help you build a solid financial foundation. If you sit back and do NOTHING, then you've just wasted your time by listening to them, and your money by buying their books.

JUN

2007

Very interesting post... this is the first I've heard of MMA. I'll check out your site Keith.

JUN

2007

The MMA program is flawed. HELOC's don't last forever. They have a 5 to 10 year draw period, and repayment periods that typically last 10 to 20 yrs. During the repayment period, the borrower must make monthly principle payments equal to the draw amount divided by the number of months left in the repayment period. During the repayment period no more withdrawals can take place.

Basically, if you don't pay off your home within the specified 10 yr period the MMA program touts (ie, don't treat the HELOC as a credit card, have a high enough income and extra cash left over each month, and don't make any mistakes for however long it takes to pay off the house) you are gonna be in a serious mess.

Well what if I just refinance? That will completely depend on what your balances are for your two mortgages.

What a mess.

Use a savings account and a credit card and you are doing the same thing without paying $3500 AND earning interest!

I think Robert would win. Equity in a house is nothing more than dead money, it does no one any good - you might as well put it under your pillow. The problem is that the heyday too many people would re-finance their homes as a way to pay for their lavish lifestyles. Common sense, along with a plan always make sense. There is no one program that meets every financial situation. OUr job is to diagnose the situation and make the recommendation that is best for the individual client.

Kate Bourland
Loan Officer
New Key Home Lending
newkeyinfo@katebourland.com

I have a feeling that Robert would win. The beauty of his books is that he is very upfront about the fact that his theories won't work for everyone - he is just sharing what worked for him and we are all to make our own decisions and create our own goals based on our own comfort levels and current situations. (I am a "put it all out there and risk the farm" kinda gal --- so his books appeal to me.)

And to address your point about his stating everyone should always have a home for the tax write-offs ... I am not certain where that comes from? In my readings - he does indeed encourage keeping money liquid for larger grossing investments - however - he also actually chastises folks that keep property simply as a tax write-off (as he sees this as a poor reason to hold property - particularly property that is costing you money on a monthly basis). He also makes it clear that owning a home (that still has a mortgage owing) is a liability and it should be seen as such. He never does say owning a home and not paying off the mortgage is an asset.

Robert is just giving everyone an brand new perspective on finances and money. It works for some - and not for others .... To each their own I suppose!

Great post!

JUN

2007

You hooked my by the title!! I believe in Kiyosaki's theory of 'education is the key'. It is because of him, that I have educated myself on different ways of lending and looking at things. In my opinion, Suze is just spouting common sense stuff, however, not everyone is born with common sense. I think Kiyosaki would come out the winner.

JUN

2007

Great topic! Not that it matters, but I for one go with the idea of using equity to help me open doors for other business opportunities. Example: I see the result of paying off my mortgage instead of using equity to plan for my retirement through todays Baby Boomer's. Walk into most fast food restaurants today, most of their employees are a bunch of senior citizens forced out of retirement mopping floors and cleaning tables just to maintain some sort of lifestyle. But yet most of these seniors are sitting on hundreds of thousands of dollars in equity thats doing nothing for them. Why do we work so hard all of our lives just to go back to work and live like we are on welfare. Usually people that are trying to pay off their home end up refinancing and starting all over again anyway.

Also its truly not your equity, don't make three months of mortgage payments and we'll see who's equity it really is. I don't know but if people want to be in control of their money they need to stop looking at their equity like its a savings account. I just don't see the benefit of paying off my home except that it saves me a couple of thousand dollars a month. Plus, we don't gain wealth by saving money.

I think this is a great topic. If anyone would like to discuss this some more I would love to hear from you. Send me an email at ryantani@tmefinc.com

AUG

2007

It seems that I remember Robert Kiyosaki writing to get a handle on personal finances by paying off credit cards and your primary residence, THEN you are positioned to buy investment properties and max out the loans on them to buy more investment properties. I don't ever recall him actually saying it's a good idea to borrow 100% on your primary home in order to buy a rental or any other investment.

AUG

2007

I think this is a great way to pay off your home. Why would you want to give all the interest to the bank? Yeah it says you need discipline, well let me tell you i would do it.why listen to the loan officer and mortgage broker they dont care they just do these loans just to get the deal and move on. (ive seen it) if i had a loan officer give me the option to do this you know how many refferals he will get. i just look at loan officers and mortgage brokers as car dealers dontttt care!!!!!!! MMA is the best way to pay your house off. Like i said no intrest for the bank and i can get own my house quicker.

Thank you very much for sharing your post, each side has their fans, some people are simply not open minded enough to do their own research to make an educated decision regarding their situation. As a lender, I have found it is best to go with Douglas Andrew Missed Fortune (101).

SEP

2007

I believe that the MMA Money Merge Account is the best program out there to offer home owners across the nation freedom from Homeowner Debt faster. You would be crazy not to look at a way you can pay of your home 8-11 years instead of 30years. MMA was in the Broker Banker magazine listed as the Outstanding Company Of The Month. If you are interested to learn about MMA email me and I will help you anyway I can.

justinc5pillars@hotmail.com

I think you are missing the point the Robert is trying to make and that is not to put a large amount of money into liabilities. Your home is a liablity. Even if your house is paid off it is still a liability. It doesn't creat passive income... it only creates expenses. Instead he wants you to invest in assets which are investments that make money not lose money.

That would be awesome!! Actually I am not a big fan of Suzi Orman. I saw her in an interview and she talked about how much money she had made. She had more than she knew what do to with. Her personal life came about and she wants to get married to her partner(Don't email me my best friend since 1st grade is gay! It was just how she came across about gay marriage. I am no gay basher) She seems very into herself and arrogant.

I much of a David Bach kinda of person.

SEP

2007

I disagree with your statement that RK believes in reckless financial abandon. His books for the beginner advocates getting out of debt and all debt is bad, Yet, when you do read his more advance books he does suggest that this is how the rich do it - reckless financial abandon.

For your original query - Rk hands down.

SEP

2007

Is MMA software available for less money than the $3500 that I hear? I'm not interested in payomg somebody's network marketing group just to be able to do this.

SEP

2007

So you want to do the MMA but you do not want the people that teach you about it, that get you set up on it, to make any money? Sounds like a great idea. I am going to try that next time I buy something from a commissioned sales person... Hey ... please help me... but reduce the price by the amount of your commission. I am sure I will get a lot of customer service that way.

Get the product, or don't, but please... this is America. If someone creates a product of value... if you see that value... there is no shame in a profit being made or a commission being paid. That is what keeps our economy going. If business did not make a profit... how many innovative new products would ever be developed?

Of course... perhaps you should not buy it at all... and just allow the banks to make thousands more in interest.... after all they need it to fund the customer service they are providiing you by opening your payment envelope and depositing your check into your mortgage account.

By the way... United First Financial is using the same compensation plan that many insurance companies use. Folks who do not understand business structures and sales organizations might think it looks like MLM... and it is similiar in that it does allow sale managers to make bonuses and over-rides (just like MLM but also like every other sales organization like real estate, mortgage, auto sales, insurance, etc), but United First Financial is simply a direct commissioned sales organization. Unlike what most folks think of as an MLM... this company does not require it's sales force to buy the product... so it is not propping up sales. The 30% increase in sales each month for the last 6 months... and the 65% increase in sales last month, was due ONLY to the merits of the product.

Keith

I love the post and the idea of a Death Match!

Keith

Hey, you got my attention with the title.

Rock on w/MMA!

SEP

2007

A real estate agent who is a friend of my niece sent a proposal regarding a United First Financial Money Merge Account to my niece the other day (Sept. 17, 2007). My niece asked me if I knew anything about this kind of account. I didn’t then but I googled the topic and read quite a bit about it last night.The following is a summary of what I learned and that others considering the UFF MMA may find helpful. I apologize in advance for the length of this post, but I believe it is extremely important that people have all the proper information on this.The UFF MMA is probably the most perfectly packaged, well-crafted scam or pseudo-scam I've ever heard of. It's so good (i.e., bad) that I think my niece’s friend and maybe hundreds of others in the real estate profession might be promoting it thinking that it really is a good idea and worth the upfront fee ($3500) that is taken out of the HELOC or ALOC (as UFF calls it) to buy the service. It's ingenious on UFF's part that they pull the wool over the eyes of people in the real estate industry who then go out and sell the service believing it is worthwhile. This makes them come across genuinely to potential customers rather than having to act genuine, as they would if they knew that the service is really pretty much worthless. I'm sure many of the agents (maybe most) know that it's all but worthless, but they can make their commission by using the misleading information built into the analysis program to sell MMAs. Some of them may have fallen for the scam themselves and later realized or had someone else point out to them that they'd paid $3500 and gotten very little. So now they are selling it to make back that money and then some. The MMA program funnels all of your income through the HELOC to capture interest savings that are available because the mortgage interest is assessed at the end of month while the HELOC interest is based on average daily balance. By timing transfers from the HELOC to pay down mortgage principal along with paycheck deposit timing and monthly bill pay timing, the program maximizes the interest saved. This interest savings along with all of your income over and above your monthly expenses ("discretionary income") is used to pay down more of the principal on the mortgage. This sounds fantastic until you realize that the program’s interest shuffling algorithms only result in savings of a few dollars per month. Therefore, you could have just deposited your paychecks into a proper interest-bearing account of your own, paid your monthly bills, and then sent everything you had left (your "discretionary income" plus the small amount of interest earned for the month) with your normal mortgage payment and had it applied to pay down principal. The tiny amount of interest you would earn each month, when maximized by paying your bills with a credit card that you always pay off each month, should be slightly more than the interest saved by the MMA program's “advanced” algorithms. So this method would actually end up paying off your mortgage slightly faster than with the MMA and, most important, you will not have wasted the initial $3500. In the initial analysis, UFF’s agents enter how much discretionary income per month will be going to pay down principal based on your monthly income and expenses. With fairly small monthly amounts used to pay down principal, you get pretty dramatic results in shortening the mortgage term and overall interest saved. Of course it is widely known that making the equivalent of one extra mortgage payment per year reduces a 30-year mortgage by about 7 years. So the UFF MMA is just taking that method to the extreme. They claim these tremendous amounts of overall interest saved by eliminating your mortgage, but they won't admit (or in some cases perhaps don't realize) that almost all of that saved interest is due to prepayment and very, very little is from the interest juggling exercises the MMA program does.Further, few or no complaints are registered about this scheme because the smokescreen that is built into the initial analysis makes most customers believe 6 or 8 months into the deal that the program is magically doing even better than the initial analysis showed that it would. The smokescreen that UFF uses on the initial analysis is that if you are paid weekly, they consider 4 weeks of pay to constitute the month. If you are paid every 2 weeks, they consider two paychecks to be your monthly salary. This ends up leaving 4 pay weeks out of the initial calculation. So as the first several months go by and you have a month or two with an “extra” payday in it (5 paydays in a month for weekly earners; 3 paydays for bi-weekly earners), all of that extra paycheck ends up going to pay down your mortgage principal. Therefore, your results look even better than the initial analysis projected as far as how quickly your mortgage is paid off and the overall interest saved. This is why UFF’s agents will sometimes say that the program doesn't work well if you are paid monthly or twice a month instead of weekly or every two weeks. It's not that it wouldn't work pretty much the same for these people; it's that it won't have the built-in deception of 4 weeks of pay going straight to mortgage principal to make the program look like magic. Absolute genius! (as well as absolutely immoral and unethical!).Because of the way the MMA is put together, it probably isn't illegal. The "sophisticated" algorithms that the software uses to manage the interest on your primary mortgage and the HELOC by timing proper amounts being transferred from the HELOC to the mortgage, along with the timing of your incoming salary deposits and outgoing monthly payments, actually does reduce the interest you would otherwise pay each month by a very small amount. So it has some monetary value, but nowhere near $3500. But because it has some value in this way, along with the supposed “value” of the ability for users to monitor how every bit of money they spend or decide not to spend affects the projected payoff date of their mortgage, it is probably not illegal. So I’d call it a pseudo-scam rather than just a scam.All of this discussion doesn't even go into the opportunity cost of using all of your discretionary income to pay down a debt at 5 or 6% interest when you could be investing that money elsewhere and over time almost certainly earning a better annualized return in mutual funds, ETFs, stocks, bonds, or other investments. UFF and many of their agents will make a lot of money selling this nearly worthless service to people who don't know better. It is a tremendously well-crafted and insidious pseudo-scam that will claim many victims before some kind of mainstream media coverage exposes it for the sham that it is.

Sorry about the lost paragraph returns in the post above. Here is a more readable version.A real estate agent who is a friend of my niece sent a proposal regarding a United First Financial Money Merge Account to my niece the other day (Sept. 17, 2007). My niece asked me if I knew anything about this kind of account. I didn’t then but I googled the topic and read quite a bit about it last night. The following is a summary of what I learned and that others considering the UFF MMA may find helpful. I apologize in advance for the length of this post, but I believe it is extremely important that people have all the proper information on this. The UFF MMA is probably the most perfectly packaged, well-crafted scam or pseudo-scam I've ever heard of. It's so good (i.e., bad) that I think my niece’s friend and maybe hundreds of others in the real estate profession might be promoting it thinking that it really is a good idea and worth the upfront fee ($3500) that is taken out of the HELOC or ALOC (as UFF calls it) to buy the service. It's ingenious on UFF's part that they pull the wool over the eyes of people in the real estate industry who then go out and sell the service believing it is worthwhile. This makes them come across genuinely to potential customers rather than having to act genuine, as they would if they knew that the service is really pretty much worthless. I'm sure many of the agents (maybe most) know that it's all but worthless, but they can make their commission by using the misleading information built into the analysis program to sell MMAs. Some of them may have fallen for the scam themselves and later realized or had someone else point out to them that they'd paid $3500 and gotten very little. So now they are selling it to make back that money and then some. The MMA program funnels all of your income through the HELOC to capture interest savings that are available because the mortgage interest is assessed at the end of month while the HELOC interest is based on average daily balance. By timing transfers from the HELOC to pay down mortgage principal along with paycheck deposit timing and monthly bill pay timing, the program maximizes the interest saved. This interest savings along with all of your income over and above your monthly expenses ("discretionary income") is used to pay down more of the principal on the mortgage. This sounds fantastic until you realize that the program’s interest shuffling algorithms only result in savings of a few dollars per month. Therefore, you could have just deposited your paychecks into a proper interest-bearing account of your own, paid your monthly bills, and then sent everything you had left (your "discretionary income" plus the small amount of interest earned for the month) with your normal mortgage payment and had it applied to pay down principal. The tiny amount of interest you would earn each month, when maximized by paying your bills with a credit card that you always pay off each month, should be slightly more than the interest saved by the MMA program's “advanced” algorithms. So this method would actually end up paying off your mortgage slightly faster than with the MMA and, most important, you will not have wasted the initial $3500. In the initial analysis, UFF’s agents enter how much discretionary income per month will be going to pay down principal based on your monthly income and expenses. With fairly small monthly amounts used to pay down principal, you get pretty dramatic results in shortening the mortgage term and overall interest saved. Of course it is widely known that making the equivalent of one extra mortgage payment per year reduces a 30-year mortgage by about 7 years. So the UFF MMA is just taking that method to the extreme. They claim these tremendous amounts of overall interest saved by eliminating your mortgage, but they won't admit (or in some cases perhaps don't realize) that almost all of that saved interest is due to prepayment and very, very little is from the interest juggling exercises the MMA program does. Further, few or no complaints are registered about this scheme because the smokescreen that is built into the initial analysis makes most customers believe 6 or 8 months into the deal that the program is magically doing even better than the initial analysis showed that it would. The smokescreen that UFF uses on the initial analysis is that if you are paid weekly, they consider 4 weeks of pay to constitute the month. If you are paid every 2 weeks, they consider two paychecks to be your monthly salary. This ends up leaving 4 pay weeks out of the initial calculation. So as the first several months go by and you have a month or two with an “extra” payday in it (5 paydays in a month for weekly earners; 3 paydays for bi-weekly earners), all of that extra paycheck ends up going to pay down your mortgage principal. Therefore, your results look even better than the initial analysis projected as far as how quickly your mortgage is paid off and the overall interest saved. This is why UFF’s agents will sometimes say that the program doesn't work well if you are paid monthly or twice a month instead of weekly or every two weeks. It's not that it wouldn't work pretty much the same for these people; it's that it won't have the built-in deception of 4 weeks of pay going straight to mortgage principal to make the program look like magic. Absolute genius! (as well as absolutely immoral and unethical!). Because of the way the MMA is put together, it probably isn't illegal. The "sophisticated" algorithms that the software uses to manage the interest on your primary mortgage and the HELOC by timing proper amounts being transferred from the HELOC to the mortgage, along with the timing of your incoming salary deposits and outgoing monthly payments, actually does reduce the interest you would otherwise pay each month by a very small amount. So it has some monetary value, but nowhere near $3500. But because it has some value in this way, along with the supposed “value” of the ability for users to monitor how every bit of money they spend or decide not to spend affects the projected payoff date of their mortgage, it is probably not illegal. So I’d call it a pseudo-scam rather than just a scam. All of this discussion doesn't even go into the opportunity cost of using all of your discretionary income to pay down a debt at 5 or 6% interest when you could be investing that money elsewhere and over time almost certainly earning a better annualized return in mutual funds, ETFs, stocks, bonds, or other investments. UFF and many of their agents will make a lot of money selling this nearly worthless service to people who don't know better. It is a tremendously well-crafted and insidious pseudo-scam that will claim many victims before some kind of mainstream media coverage exposes it for the sham that it is.My advice to anyone who has read this far is to remember that each person’s situation is uniquely their own. Paying off a mortgage as fast as possible might be right for someone in some particular situation in life. But buying the UFF MMA is not the most efficient and effective way of doing that for anyone because the very first thing the program does is add $3500 to the debt that you are trying to eliminate. That can only be the proper first move if that $3500 is somehow going to be made up later. The good information in this thread and in this summary should make it clear to all that the program has no special algorithm or payment timing that can come close to making up the extra debt you’ve taken on when you sign on the dotted line.

I don't know why all paragraph returns are being stripped. But if you are considering an MMA and skipped my above posts due to length and lack of paragraph breaks, please go back and struggle through one of them or copy and paste to MS Word and reformat by adding paragraph returns where indicated by each *** . You will thank yourself later for avoiding the $3500 expense of the MMA.******A real estate agent who is a friend of my niece sent a proposal regarding a United First Financial Money Merge Account to my niece the other day (Sept. 17, 2007). My niece asked me if I knew anything about this kind of account. I didn’t then but I googled the topic and read quite a bit about it last night. ***The following is a summary of what I learned and that others considering the UFF MMA may find helpful. I apologize in advance for the length of this post, but I believe it is extremely important that people have all the proper information on this. ***The UFF MMA is probably the most perfectly packaged, well-crafted scam or pseudo-scam I've ever heard of. It's so good (i.e., bad) that I think my niece’s friend and maybe hundreds of others in the real estate profession might be promoting it thinking that it really is a good idea and worth the upfront fee ($3500) that is taken out of the HELOC or ALOC (as UFF calls it) to buy the service. It's ingenious on UFF's part that they pull the wool over the eyes of people in the real estate industry who then go out and sell the service believing it is worthwhile. This makes them come across genuinely to potential customers rather than having to act genuine, as they would if they knew that the service is really pretty much worthless. I'm sure many of the agents (maybe most) know that it's all but worthless, but they can make their commission by using the misleading information built into the analysis program to sell MMAs. Some of them may have fallen for the scam themselves and later realized or had someone else point out to them that they'd paid $3500 and gotten very little. So now they are selling it to make back that money and then some. ***The MMA program funnels all of your income through the HELOC to capture interest savings that are available because the mortgage interest is assessed at the end of month while the HELOC interest is based on average daily balance. By timing transfers from the HELOC to pay down mortgage principal along with paycheck deposit timing and monthly bill pay timing, the program maximizes the interest saved. This interest savings along with all of your income over and above your monthly expenses ("discretionary income") is used to pay down more of the principal on the mortgage. This sounds fantastic until you realize that the program’s interest shuffling algorithms only result in savings of a few dollars per month. Therefore, you could have just deposited your paychecks into a proper interest-bearing account of your own, paid your monthly bills, and then sent everything you had left (your "discretionary income" plus the small amount of interest earned for the month) with your normal mortgage payment and had it applied to pay down principal. The tiny amount of interest you would earn each month, when maximized by paying your bills with a credit card that you always pay off each month, should be slightly more than the interest saved by the MMA program's “advanced” algorithms. So this method would actually end up paying off your mortgage slightly faster than with the MMA and, most important, you will not have wasted the initial $3500. ***In the initial analysis, UFF’s agents enter how much discretionary income per month will be going to pay down principal based on your monthly income and expenses. With fairly small monthly amounts used to pay down principal, you get pretty dramatic results in shortening the mortgage term and overall interest saved. Of course it is widely known that making the equivalent of one extra mortgage payment per year reduces a 30-year mortgage by about 7 years. So the UFF MMA is just taking that method to the extreme. They claim these tremendous amounts of overall interest saved by eliminating your mortgage, but they won't admit (or in some cases perhaps don't realize) that almost all of that saved interest is due to prepayment and very, very little is from the interest juggling exercises the MMA program does. ***Further, few or no complaints are registered about this scheme because the smokescreen that is built into the initial analysis makes most customers believe 6 or 8 months into the deal that the program is magically doing even better than the initial analysis showed that it would. The smokescreen that UFF uses on the initial analysis is that if you are paid weekly, they consider 4 weeks of pay to constitute the month. If you are paid every 2 weeks, they consider two paychecks to be your monthly salary. This ends up leaving 4 pay weeks out of the initial calculation. So as the first several months go by and you have a month or two with an “extra” payday in it (5 paydays in a month for weekly earners; 3 paydays for bi-weekly earners), all of that extra paycheck ends up going to pay down your mortgage principal. Therefore, your results look even better than the initial analysis projected as far as how quickly your mortgage is paid off and the overall interest saved. This is why UFF’s agents will sometimes say that the program doesn't work well if you are paid monthly or twice a month instead of weekly or every two weeks. It's not that it wouldn't work pretty much the same for these people; it's that it won't have the built-in deception of 4 weeks of pay going straight to mortgage principal to make the program look like magic. Absolute genius! (as well as absolutely immoral and unethical!). ***Because of the way the MMA is put together, it probably isn't illegal. The "sophisticated" algorithms that the software uses to manage the interest on your primary mortgage and the HELOC by timing proper amounts being transferred from the HELOC to the mortgage, along with the timing of your incoming salary deposits and outgoing monthly payments, actually does reduce the interest you would otherwise pay each month by a very small amount. So it has some monetary value, but nowhere near $3500. But because it has some value in this way, along with the supposed “value” of the ability for users to monitor how every bit of money they spend or decide not to spend affects the projected payoff date of their mortgage, it is probably not illegal. So I’d call it a pseudo-scam rather than just a scam. ***All of this discussion doesn't even go into the opportunity cost of using all of your discretionary income to pay down a debt at 5 or 6% interest when you could be investing that money elsewhere and over time almost certainly earning a better annualized return in mutual funds, ETFs, stocks, bonds, or other investments. ***UFF and many of their agents will make a lot of money selling this nearly worthless service to people who don't know better. It is a tremendously well-crafted and insidious pseudo-scam that will claim many victims before some kind of mainstream media coverage exposes it for the sham that it is. ***My advice to anyone who has read this far is to remember that each person’s situation is uniquely their own. Paying off a mortgage as fast as possible might be right for someone in some particular situation in life. But buying the UFF MMA is not the most efficient and effective way of doing that for anyone because the very first thing the program does is add $3500 to the debt that you are trying to eliminate. That can only be the proper first move if that $3500 is somehow going to be made up later. The good information in this thread and in this summary should make it clear to all that the program has no special algorithm or payment timing that can come close to making up the extra debt you’ve taken on when you sign on the dotted line.

My money would be on Robert simply for his creative ideas. Many things he talks about I would not do personally but he causes you to think and that thinking is positive. Suz seems to be more of a person trying to scare you than help you. She talks down on people instead of offering them positive and creative advice.

OCT

2007

My name is Steve and I learned about this strategy 5 years ago to quickly get myself out of debt. In my very first 30 days I paid off 2 credit cards and 1 auto loan! Because of my success I created an e-book to show people the strategy and you don't need to use any software to implement this program. visit my site at: www.financialadvantages.com

Let me end the doubt. Suze Orman doesn't know her butt from first base. And her biography is far from distinguished. She has a skinny body, a memorable smile and a hair-do, and the world's most irritating voice.

OCT

2007

The "Money Merge Account" concept could be a good idea. What if the mortgagor doesn't have:

1) Sufficient equity for the HELOC?

2) Sufficient credit score to qualify for the HELOC?

3.) Sufficient cash flow to paydown the HELOC?

I speak with hundreds of mortgage brokers and L.O.'s on a monthly basis, and most say very few of their clients would qualify for the above.

If all the above passes, then they have to pay $3,500 for the software. If they roll-it into the HELOC this requires additional adjustments of the above figures.

Then there's the matter of discipline. I brought up the concept of the MMA to some people and when I mentioned that they had to go on-line every month to check their accounts and then make the payments themselves they immediately nixed the idea.

I believe there's a difference between "investment" positions and one's personal home and they should be treated as such. Kiyosaki advocates building a business and using business debt (good debt) to off-set business income. Personal income and expenses are a different matter.

Using interest on a home mortgage is an interesting strategy. (Paying $1.00 to save $0.30, maybe even less. But then what other deductions does the typical "employee" have available?) This strategy also assumes the mortgagor would have the knowledge and time to invest the money from the mortgage. Could be a huge assumption.

Pay down the mortgage without the risks or qualification requirements listed above.

Robert would win. No contest. But unless some of you actually know and have met Suze it is very easy to run off at the mouth about her. She is actually a very nice and caring person.

I would think that Robert would win. He is really an outside the box kind of person when it comes to his thought process. It has been awhile since I read several of his books, but he is a big advocate of using other people's money. This does not mean the bank's money either. He thinks you should reduce your exposure by finding investors for purchases and place them in the risky position. He does not advocate running out and taking out a bunch of bank loans.

I like Dave Ramsey, he makes solid sound advice on getting out of debt and building wealth.

OCT

2007

Keith, my question with the MMA is, since it is a web-based system, can the client download the software that they paid $3500 for and save it on their own computer (in an application folder possibly)? I ask because if this company's server was to go down permanently, then all clients would be out $3500. If this could be done, then I see absolutley no risk involved and would consider investing the $3500.

OCT

2007

my name is teo am mortgage broker ho is in this business just few years , I was trying any think out there to get leads and try to get some deals . in may 2007 I was search the best marketing tools for real estate and mortgage , I run about this company and they offer 5 days live training about marketing and tools how to post adds online and about goggle ads word ect ..................., but after few week I star to use this marketing tools in our business real estate and mortgage , every things change , I built about 181 client they want to refinance and 54 purchase with every one up to 690 and more fico score , am going to to have about over 6 figures income this month only on origination fees and plus purchase fees , what is good is free live training and over 1000 software for marketing ,

if you need more info's let me know

teokridech@hotmail.com

San Francisco 415-990-6190

Bill L.

I worked my way through your paragraph twice. So simply paying bi-monthly and paying extra principal payments makes much more sense. I was having a very difficult time working my way through the money merge "new wave" money saving wonder... I was challenging everyone around me trying to sell me and your writing helped me believe me....

Thanks

OCT

2007

I'm amazed that the only people you can find online that call the MMA a "scam" are people that have never tried it. That right there should be enough reason to ignore the posts. Bill L. if you did any kind of actual research (other than a generic google search) you'd find out that everyone except America has been doing the same type of plan as the MMA for years. People that are too prideful to be anything more than a skeptic will never accomplish more than the most average of average because they think anything out of the norm must be a scam. I consider my 30 year mortgage much more of a scam than the MMA program. And, no, I'm not a sales rep for them. I'm from the original test market from over 3 years ago. I get paid twice a month (not every other week or anything like that, that you're suggesting) and I will have my house paid off in 6 years.

Keep being a skeptic though and thinking that everything that sounds good is a scam, based on a google search and finding other forums full of people w/ zero knowledge or experience. I enjoyed how your post even attempted to explain away actual users' testimonies. People are using the software successfully...they are completely satisfied...yet, you still somehow try to say that they are just deceived and it really is a scam because of the "in-depth" google research you did. Simply amazing.

Enjoy your 30 year mortgage, Bill. I'm sure it'll be a fun ride.

DEC

2007

question...

Can you use the program in multiple properties?

In my opinion, Money Merge accounts are the flavor of the week. There are lots of ways to pay down your mortgage faster, and most people will realistically not spend the time needed to make this expensive software work.

As for Suze and Robert, moderation in all things. They could both afford some lessons with Jim Cramer.

Keith's explanation of the MMA principals is mathematically correct. Anf several times he points out its only real downside...the borrower not having the discipline to keep from using his home/line of credit to make additional credit purchases.

Whether the people/companies selling them are on the up and up is another matter, but the logic of the plan itself is sound. It's not a scam.

DEC

2007

I have done a few analyses and my conclusion is that the MMA is a wonderful tool for 2 kinds of people: Those who are financially irresponsible, and those who have lots of debt. Otherwise, you can do the same thing yourself and not have to pay the $3500 fee for the software. But, if you fall into one of the 2 categories, then the MMA can save you an awful lot of money.

One crucial point in participating in the program is your ability to properly manage a HELOC (Home Equity Line of Credit). The faster you pay down your HELOC, the better the MMA will work for you. There are several creative and extremely effective ways to decrease the payment on your HELOC. These apply not just to MMA participants, but to anyone with a HELOC. You can literally decrease your payment by $100-$200 each month. More info here.

DEC

2007

If it's so easy to do on your own, then why is not one single person on this planet doing it? Because it can't be done with an excel spreadsheet accurately.

I ask all the people down playing this product, when is the pay off date of your mortgage? I'm very sure it's not in 10 years.

Some don't like it because it's an MLM company.Well, the great people at wwwMMAMortgageSoftware.com never asked me to sell it.

Unless you own it, don't knock it. I own it, and if you don't, you're getting screwed by your bank!

$3,500 to save $475,000 in interest, I would have paid 50k. I got a deal, and it's very easy to use, 20 minutes a week and I'm done!

I got it from:

www.MMAMortgageSoftware.com

JUL

2008

I think you need to take advice from others with a grain of salt and do your own due diligence. I happen to like Robert and Suze--but Robert makes more sense!!! and what he has to say--isn't going to work for every one.

SEP

2008

Terry, Great Comment. I love the so called know it alls who put down the mortgage acceleration programs. many are out there and most of them do work and will save people much more than the investment. Even $ 3500.00. The key is not the software however, the key is the cashflow and discipline. But I have found if you sell a program like this very cheap then it gets watered down and nobody follows thru. I am both a Financial Planner as well as a mortgage broker. Each situation can be different. If you just sell someone the MMA and leave it at that, then yes it is a scam. I am not a big fan of the general public selling the MMA. But I do think that Financial Professionals can do clients justice in selling it and some of the others out there. AS LONG AS THEY KEEP THE CLIENT ON TRACK. You can set the client up with a Heloc for $ 25,000.00 but if they use it to buy a $ 20,000 car instead of paying down debt. Even a free acceleration program is a wast of thier money.

JUL

Using the banks money – We started out by taking out a loan called a mortgage, using the bank’s money. Now that it’s time to pay the loan back, we need to get the money from somewhere. Usually, it comes out of our paycheck. But MMA claims that if we use a HELOC, we are not using our money anymore, we are using the bank’s money. But, wait, we started all this by using the bank’s money to take out a mortgage and now we have to pay it back. So that means if we use the bank’s money by taking a loan out of the HELOC, we have to pay that back, too. So all we did was postpone having to pay the bank back by using the HELOC money to pay the mortgage. We still have to pay the HELOC back. Where is that money going to come from? Out of our paycheck. So why should we spend $3500 on MMA to play a money shell game with a HELOC?

Interest cancellation – MMA claims that by loading up the HELOC and running our paychecks through the HELOC, we reduce the balance so much that we save lots of money that way, and that alone is worth $3500. OK, so how much can we save? Well, let’s assume our mortgage rate is 6%. That means each month, we are charged 1/2% on our mortgage balance, the whole balance. But if we are using interest cancellation, the most that we can save is whatever our monthly salary is. So, if we bring home $5,000, the largest HELOC balance we can offset is $5,000. How much will that save? $5,000 times 1/2% is $25. That’s $25 per month or $300 per year. So MMA wants you to spend $3500 upfront to save $300 per year. Do you know how much interest you would save if you just put $3500 towards your 6% mortgage? OVER $4,000.

Factorial math – MMA claims no one except a computer can figure out the best possible way to pay all your bills and debts because of all the possible combinations. LIES. There is only one SIMPLE BEST way to pay off all your debts. You pay off the highest interest debt first and work your way down using a DEBT SNOWBALL. It only needs addition and subtraction.

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