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Book - "How to smash your mortgage"

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  • Book - "How to smash your mortgage"

    Has anyone read the book- "How to smash your mortgage" by Phil STRONG?

    I recalled a post somewhere here on the forum and followed that to a NZ site MoneyWise
    RedWing

    Still Learning.............

  • #2
    I have found these types of books centre around a few simple ideas. They are:-

    1) Get your salary direct credited to your line of credit; (get a line of credit if you dont have one equivilent to a months salary);

    2) Use your credit card for 45 days to get free credit for that period; pay it off from your line of credit on the latest possible day to avoid interest);

    3) The free interest and small reduction of debt has a big compound interest benefit over time;

    4) Pay your mortgage off fortnightly if you’re paying monthly, has a big impact on compound interest paid over a long time.

    5) If you can, pay your mortgage off over 15-20 years Principal and Interest, not 20-30 years as you pay a lot more interest.

    Did I miss anything everyone ?

    There you go - you don’t need to read the book.
    Last edited by Matt Gilligan; 19-07-2010, 01:56 AM. Reason: Spelling etc
    Matthew Gilligan CA - E-mail Matt
    Chartered Accountant Specialising in Tax Structures, Property & Trusts
    Read my book: Tax Structures 101

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    • #3
      Nice summary Matt - not only do you not need to read the book now, you don't have to pay $5000 to any of the mortgage reduction 'strategists' who, contrary to popular belief, are still out there selling this simple strategy as if it's unique to them.

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      • #4
        awwh but they will make it so easy for you !
        They will assess how much you should have the revolving credit for
        & help you make sure you dont just draw down everything you can & take off on a holiday to Surfers
        & they will setup all your accounts for you so you can just sit back and carry on life as normal, - thats the life that is not letting you make any headway on your mortgages right now - there's no need to change !

        that has to be worth 5-6 grand

        YEAH RIGHT


        Isnt it a shame that this sort of stuff is not part of basic education in our schools
        Food.Gems.ILS

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        • #5
          Gasp
          Financial education in schools?
          Whatever are you suggesting?
          .
          Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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          • #6
            Its the compounding effects of loans or investments which really amaze people.
            Hamish Patel | ph: 09 625 4693 | mob: 021 625 693
            My Website
            Be informed - register for our free monthly newsletter

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            • #7
              Originally posted by Perry View Post
              Gasp
              Financial education in schools?
              Whatever are you suggesting?
              .
              Actually I suppose you are right- it would never happen because then the general populace would realise what a crap job our (& everyone elses) politicians do of managing our economy & financial affairs.

              More importantly they might wake up to the ripoff that the whole fractional reserve banking scheme really is, but that's a whole different story !
              (I would love to see someone with the resources take on the whole invalid lending scheme - that really would be Smashing the Mortgage)
              Last edited by Keithw; 19-07-2010, 01:18 PM.
              Food.Gems.ILS

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              • #8
                Did I miss anything everyone ?
                Yeah...you forgot the bit about paying off the most expensive debt first....not forgetting to continue paying all the other monthly installments on the many many do dahs you've bought.

                Then when that is done, go pay the next expensive debt....adding in the amount you used to pay on the previous retired debt.

                Continue untill all debts other than the mortgage is paid.....from now on ALL surplus money is directed at the mortgage as described by Matt.

                And don't spend any other money...cut up all credit cards etc

                And say goodbye to your old life and spendthrift ways.

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                • #9
                  Thanks for the summary Matt, I'll put the cost of the book on my mortgage

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                  • #10
                    And also, keep most of your mortgage out of the line of credit, and keep a spreadsheet of the monthly/fortnightly change in your mortgage and line-of-credit balances. That way you can see how much you're actually paying off your mortgage and make sure your total debt position reduces by as much as you want it to.

                    Otherwise, you may feel like you've got lots of nice extra money from that line of credit and just keep spending it, month after month after year. That's the trap for the undisciplined.

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                    • #11
                      I think that if you want to pay your mortgage off quicker, you just have to pay it off quicker.

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                      • #12
                        LOC works like magic.
                        Need discipline or can arrange for the limit to be reduced each month.
                        Those big shiny flat screen TVs and fast cars are awfully tempting though...
                        The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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                        • #13
                          Time-tested formula that always works

                          You guys are brilliant . The line of credit is not everyone's cup of tea. It is well documented that this facility has hurt more people than it has benefited.

                          Yes...there still exists a market for mortgage reduction in this market..you just have to look at the number of Indians flocking to unload a couple of grand to a broker who claims to have a magic wand..and the list of gullible borrowers only increase...the list is endless and includes well educated and intelligent borrowers.

                          The time-tested formula always works....borrow less than the bank tells you that you can afford,take a shorter term,structure your loan over 2 or 3 fixed terms & fix your loan for short terms, do not borrow for assets that do not appreciate...You should be able to pay off the mortgage within 10 - 12 years. No sweat....

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                          • #14
                            its just logic!! pay more, you pay it off quicker!

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                            • #15
                              Originally posted by mortgagemantra View Post
                              borrow less than the bank tells you that you can afford,take a shorter term,
                              I feel the key is to show people the impact of extra repayments on thier mortgage term and thier total interest cost. The best results can be achieved when you can afford to pay a lot more than the minimum payments. Borrowing less helps this a lot.
                              Hamish Patel | ph: 09 625 4693 | mob: 021 625 693
                              My Website
                              Be informed - register for our free monthly newsletter

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