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FIB - Scams 101
Re: From SUE... Re: An open Challenge to the United First Financial
Posted By: Sue Copening In Response To: Re: From SUE... Re: An open Challenge to the United First Financial (Calvin)
Date: Wednesday, March 26, 2008, at 9:05 p.m.(pst)
>> Sue, we can do it with less than 10 minutes. We can do that
>> calculation in less than 1 minute. Income minus expenses = additional
>> prepayment. No fancy math. No fancy algorithm needed. I take it you don't
>> even realize the UFF's algorithm is even remotely close to optimal? I know
>> you will claim all sorts of things about who developed it or how much it
>> cost, but not only can we beat any MMA approach with an average checking
>> account (unless you count the $3500 fee, then even a 0% checking account
>> will destroy it), but we can even beat a free UFF approach using an MMA
>> because it isn't optimal.>> So, Sue, oh great defender of the MMA, you are going to take our
>> challenge? I am guessing not really, but here it goes:>> $5000 income per month (paid $2500 on the 15th, $2500 on the 30th).
>> $1500 per month bills, due on the 25th.
>> $200k mortgage, 6%, 30 years, $1199.10, due on the 1st of each month.
>> 7.5% heloc
>> $5000 in the bank, 3% interest.>> Ideally, we should run two scenarios for you, one with the $3500 fee,
>> one without. I am happy to show that BOTH are outperformed by one simple
>> subtraction calculation each month. That's right, 1 single calculation.
>> ouch, that's GOTTA hurt. :)>> What are ALL the money movements used to pay of your mortgage?
>> Calvin
>> ps. now is the time you weasel out and do not take the challenge, like
>> every other agent out there that knows UFF software is worthless and
>> outperformed with ease.What industry experts say...
"Outstanding Company of the Month" - Broker Banker Magazine, Nov 07
EDITORS CHOICE AWARD - Personal Real Estate Investor Magazine, Feb, 08
Cover & Feature Story - Mortgage Planner Magazine, Jan/Feb, 08
"It might sound too good to be true, but it isn't" - Channel 3, Las VegasFirst Calvin... That is for you... what are YOUR money movements in the above example? You left off the most important part.
But really... If everyone had a budget, and income, that never varied by a penny, month to month, year after year, then I certainly agree ... they would not need this program to do the math as the calculations would certainly be easy to make, and the only time they would have to readjust would be if the interest rate on the HELOC changed. How many people do you know that have a budget that never varies at all?
However you have a fundamental misunderstanding about this program... you seem to think that this program is only about applying discretionary income. It is not (some of the "competing" programs are about that though... so this might be where your confusion came from). To get the maximum savings you need to calculate how high you can drive that balance on the HELOC. SO Calvin... with your math above... what would be the amount you would borrow from the HELOC for the first transfer to the primary mortgage?
And... WHEN exactly would the NEXT transfer be?
Transfer Amount: $?,???.??
Date of first transfer: ?
Date of 2nd transfer: ? (etc)
Pay off date: ?While we are at it... why not tell me what the "effective" interest rate is that they would pay on that HELOC (or even the total dollar amount in interest) taking into account the interest cancellation effect of their income deposits? This is one of the calculations that has to get made to determine the optimal transfer amount... so jot it down as well.
So, even if we were going to assume that budgets remained constant, you are still missing those elements. I'll be happy to do my math when I have something to compare it to.
The confusion you are experiencing is caused because you are still trying to compare your simple math with the math performed by UFirst's Analysis software, which is used to show a conservative projection of savings and does not utilize any algorithms at all. It is simply what we use as an example to demonstrate the concepts. I know that people have told you, over and over, that the "sample/example" is done using our Analysis software... a completely different program than the real software. I'm not sure how many times this need to be repeated... but comparing your numbers to that is not useful, as they are both only applying discretionary income and will come out to the penny the same.
But our Algorithm driven software is getting our clients, on average, 20% better results than their Analysis software projected. They usually see those results after 4-6 months of their spending habits and cash flow have been entered into the software because then it has been given more data to work with and has already calculated an optimal transfer or two. Many clients say they see their pay off date move a few months, to as much as a year, closer after about 6 months of use.
Of course an algorithm is simply a programmed series of calculations that, once programmed perform the functions consistently every time so that human error does not have the chance to come into play. You can think of it as a "math recipe." The algorithms in the real software are what do the multiple calculations necessary to calculate the value of someones stagnant money and the amount of interest they will pay on the revolving line of credit based on the dates of their deposits and expenses, which must continually be recast/re-averaged to account for a fluctuating budget and varied cash flow.
These calculations are what "pinpoint" the EXACT optimal amounts, and timings of the transfers.
If someone is disciplined enough to stick to their own program, and are willing to do the math, and can do the math accurately, then they can certainly do so and, even with errors, they will get most of the savings. However if you are saving between $80,000 and $200,000 in interest, your margin of error would be 1.7 to 4.3% and I would disagree that you could do these calculations very quickly... at least not if you wanted to be sure you had not made an error.
So far I have not had one client who, once they saw their personal savings example, and saw our DEMO software in action, thought that they would be able to do it themselves working within that margin of error. Nor did any of them even want to try... simply too much trouble.
After all, just $1000 in errors (total) anywhere in the first 5 years of a mortgage, costs you over $4000 in interest that you could have saved... but did not.
Calvin... you must get with an agent that can show you the DEMO version of our software in action. Once you see that you will start to "get this." Please don't think that I don't understand where you are coming from... we have encountered your mindset in many of our clients.. who include CPA's, Financial Planners, etc. They are all smart numbers people and many thought it would be "easy" to do this themselves... until they took a look at the real software "in action."
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