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FIB - Scams 101
Re: CONFUSED!... What about u1stfinancial (scam?) inspires such, ummmmm, passion?
Posted By: Calvin In Response To: CONFUSED!... What about u1stfinancial (scam?) inspires such, ummmmm, passion? (MaaMaw)
Date: Thursday, June 19, 2008, at 9:21 a.m.(pst)
In Response To: CONFUSED!... What about u1stfinancial (scam?) inspires such, ummmmm, passion? (MaaMaw)
I'm probably considered one of the more "vocal" opponents of this system. I've been called every name in the book, threatened with lawsuits, etc. I also freely admit I've thrown my fair share of names around for UFF "enthusiasts" (read: liars). I got into this "brawl" because an agent tried to scam a close friend of mine, a newly single mom trying to recover from a financially irresponsible husband while not having much financial know-how herself. The nerve of the agent and his lies was to a level that I thought I would spend some time debunking his crap. I got on the net and found his crap par for the course and far from the worst, so I decided to donate some of my time to spreading some simple knowledge about this and other debt repayment systems.
First things first, the "system" works. If you follow the software prompts, you'll pay off your house faster. However, if you went to Jiffy Lube, paid them $3500, and they talked you through how to change your oil, and had you bring your own tools, your oil would be changed as well. That's about what you get. I do not call the product a scam, I call the agents and the company a scam, because they perpetuate the lies about the product. They make it sound like their algorithm is generating the savings. They make it sound like it's too complex for a mere mortal to reproduce. And worst of all, they make it sound like their technique is necessary to get the results.
>> ==> But it's also clear to me that there are tons of homeowners who
>> don't have a clue about this stuff.
This statement is very true. Unortunately, few people have seen an amortization schedule and understand the power of compound interest. Albert Einstein was once asked "What is the most powerful force in the universe." He answered "Compound Interest." (feel free to look this up, it happened). As powerful it is, it is actually a very simple concept.
>> ==> There's another ton of homeowners who have a clue (they've
>> heard it can be done), but they don't have the smarts to figure it out (or
>> ask their banker) -- and even if they did, they lack the discipline to
>> follow through month after month, year after year.
The Discipline argument is at least a viable argument since it is opinion while their other claims are simply debunked with math. Some people just can't make that extra payment, they want to spend in the now for material stuff. As for not having the smarts to figure it out, I have to take issue with that. If you can add and subtract, you can do this effectively.
The UFF's system is really not about the HELOC. Agents will no doubt cry foul over this statement, but it's true. It's ALL about discretionary income. They borrow from their HELOC to pay their mortgage, then they pay their HELOC with their paycheck. That's very similar (almost exactly the same as) to paying your mortgage, paying your bills, and then sending your discretionary income to your mortgage each month. Discretionary income = pay - bills. That's it. That's all the math you need. Don't believe me? Let's look at a comparison. Here is a comparison between a UFF supplied analysis and the simple method I described.
UFF analysis: http://www.mediafire.com/?2txrxjvyl5d
simple google spreadsheer demonstrating prepayments:
Notice the prepayment approach comes out about $3500 + interest ahead? It's very simple. UFF = prepayments in disguise. There is a **SLIGHT** savings generated with the use of a HELOC, but it literally is on the order of a few hundred dollars total over the course of many many years. That savings is eaten up by the interest alone on the $3500, much less the actual $3500 fee. Gee, what a great program.
>> If -- (I say **IF**) -- the ufirst financial software maps out a
>> program for this type of homeowner, walks him through it, and keeps him on
>> track for as many years as it takes... is it possible, just possible, it's
>> a good thing for that one type of person even though it can clearly be
>> done better (and free!) by people who have what it takes to make a plan
>> and stick to it?
I actually agree with this statement **IF** it were actually hard. there's no complex calculus or differential equations to solve. Simple addition and subtraction. If you want a map, free amortization schedules are available for excel. Quicken or Money will do the same thing, plus track all your spending and accounts for about 1/100th of the cost. UFF agents love to make a GPS analogy, but this would be one GPS that continually takes you the long way around to get to your destination instead of a straight line.
>> I am not for one minute recommending that anyone hand over $3500 of
>> their hard-earned cash to u1st financial -- I would never do it! -- but I
>> am daring to suggest that maybe it's just what "the select few"
>> need to get them on track.
I guess one question to ask here is: If it is such a great product for a group of people, why do agents almost completely across the board lie about their product? Their claims of "no change in cash flow" would cause accountants to literally lose their licenses under the same circumstances. Why claim "no extra payments" when MASSIVE extra payments are being made. Why claim (A Sue favorite) "It's ALL about the timing" when the timing is less than 1% of the typical savings, while >99% is discretionary income. ALL debt prepayment programs are about how much money you send to the debt. The more you send, the more you save. It is just that simple.
But no, UFF agents continually lie left and right.
>> Is that possible?
I will stop my fight against the UFF and other similar products when they start marketing them honestly. When they say what it does and does not do, instead of lying about WHY and HOW it does what it does, then I'll walk away. But of literally 100's of agents I've interacted with in real life and online, I can count on one hand the honest ones, and wouldn't even use the majority of the fingers. As for the rest of the agents, I have but one finger for them. :)
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