A New World of Opportunity to be Debt Free Without Lifestyle Change!

What if you could find a way to be 100% debt free, including your mortgage, in as little as 10 to 15 years and save thousands in interest? Wouldn’t that feel great!

What if you could do that without changing your lifestyle? The average family has over $8,000 on credit cards with over $11 trillion in consumer debt when you add it all up. There is a tremendous need to teach America how to eliminate debt because America is inundated with offers of easy credit. Why should a family wait to enjoy the fruits of their future labor when they can have it now? To illustrate to you what I mean, let me tell you a short story.

A few years ago a local school district asked me to do a career day for 3rd and 4th graders. I accepted to do the presentation, then I wondered what I could possibly teach these young minds about money that might stick with them into their adult life. It turned out to be a great day with classroom after classroom bussed into the school to hear the presentation.

I decided to teach them what has become one of the most misunderstood financial or money facts in America today. There are billions of advertising dollars being spent in radio, T.V., Internet, mailers and publications telling families they can have it all now. Don’t wait, you can have it now. In fact you don’t even have to have a good credit rating, you can still have it now. They might as well say, “Sign up now and become a slave to our corporation.”

They never teach how to eliminate debt, only how to get into debt. It is a process almost as bad as drug addiction. I believe it is the biggest false presentation in America today. America’s negative savings rate is proof that it is working. They are getting America deeper and deeper in debt.

Debt or credit has become part of the American way of life. Most families in America have no idea when, if ever, they will be out of debt. Here is the problem. Any time that you sign a mortgage, car loan, boat loan or use a credit card, you have just signed away your “future time.” In fact you have made a contractual legal commitment to give your future time to the lender. You have become part of a group of slaves that have dedicated all their future time to paying off loans. We are seeing families with $2,000 to $4,000 in debt payments each month. They are but one paycheck away from bankruptcy because they are staying forever in debt.

Definition: Credit Card \ kred’-et kard \ n.: A means for buying something you don’t need at a price you can’t afford, with money you don’t have so you can impress people you don’t even know.

What I taught to the 3rd and 4th graders was that when you use a Credit Card or sign a loan for a house, car, etc., it is a commitment of your Future Time. A Credit Card, then is your Future Time. On that day I was successful at teaching those children that it is better to save first and avoid giving up your future time to pay interest.

Consumer Debt Increases

Between 1996 and 2004 consumer debt more than doubled to $10 trillion dollars. It has since grown to more than $11 trillion dollars, yet America is experiencing one of the best economic times in history. The commerce department of the Federal Reserve says that there is going to be “hell” to pay if something is not done about consumer debt. To address this problem, Congress has passed a new law requiring credit card companies to double the required minimum payment in 2007 in an attempt to pay off some of this debt that is impacting the real lifestyle of Americans. For families that have multiple credit card debt, it is going to push them over the edge. Their minimum payment will go up beyond their ability to pay.

Foreclosures on the Increase

Foreclosures on houses are up 53% because so many refinanced or purchased using the wrong type of loan that allowed them to get into more house or a larger loan than they should have been able to qualify. They qualified because of the low start rate. These loans are now kicking into high gear for the lender and putting people out of their houses. They either paid interest only for 3 or 5 years and still owe the original balance, or they had what I call the Power Option loan and had a really low start rate of 1% to 1.5% resulting in a reverse amortization and now owe, after 5 years, more than the original loan amount. The industry likes to call it deferred interest, when in fact it is a reverse amortization that adds to the principal balance on a monthly basis. Now that it is time to amortize the rest of the loan, the interest rate is higher and the amortization period, or the period in which to pay off the loan is shorter, down from 30 years to 25 years. The result, higher payments that families cannot afford and they are kicked out of their house. A $200,000 loan could have a $300 per month bump or just enough to make it impossible to meet the payment.

Because of all this debt, there is a paradigm shift in the financial industry. The financial industry now agrees with me that families should get out of debt, 100% out of debt, including their mortgage, before investing.

You May Be Renting Not Buying – You Thought You Were Buying – But Still a Renter

Let me ask you a question. Did you purchase your house to own it or rent it? Most people purchase a house to own the house, not to rent a house. If you look at the facts, most people are renting when in fact they thought they owned their house. This is true for so many families that took out an adjustable rate loan with interest only (rent) for the first 5 years.

In discussions with lenders, they tell me that houses, on average, are refinanced and/or sold every 3 to 4 years. Here are some important numbers that you should know.

When it comes to loans, most families take out the traditional fixed rate loan. As an example, let’s say you have a $200,000 loan at 7% amortized over 30 years.

• The debt service or principal and interest you will pay each month for 30 years is $1,330.60 per month.
• During the first ten (10) years you will pay to the lender $159,672.
• Of that amount $131,297 is interest because the lender wants their money first. That is why they are in business, to make money.
• You will have paid down just 14% or $28,374 in principal.
• Think about it. You are actually renting (paying interest) instead of owning. You just didn’t know it.
• It takes 21 years 8 months to pay off $100,000.
• At that point, interest is more than the original loan, or $246,556 for a total of $346,556.
• Over 30 years, it is going to take $279,021 in interest payments.

Here is the deal. If loans are refinanced every 3 to 4 years, at the end of the 4th year you will have paid in $54,818 in interest and only $9,050 in principal. Except for appreciation in value, you do not own your house. You are renting your house from the bank through interest payments. The good news, you say, is that you get to deduct the $54,818 from your income tax. That is true. Owning a house is better than renting a house. What if you owned that house debt free? Would that be better? Some say that would not be a good idea because you would lose the write-off for the interest. Some say it is common knowledge that you need to have a mortgage. Your mortgage is frequently misidentified as good debt and the rest is bad debt.

The sad news is that 86% of Americans file the short form and never take advantage of this well-known tax break even though we have been told it is a great benefit.

Now I am going to tell you a little secret that lenders and mortgage brokers do not want you to know. Owning a house debt free is better financially at tax time than having a mortgage.

We hear all the time that you can consolidate your debt by taking out a new loan and if treated right you can write off the interest. Here is the misinformation. “It is great to have debt on your house because you will get a big income tax break.” Things could not be further from the truth.

While we have a goal to pay the government as little in taxes as possible, we ignore our personal cash flow to supposedly benefit from the tax write-off.

• Assume we are in a 15% income tax bracket and we are paying $1,000 in interest.
• We pay $1,000 to the lender and get to deduct $150 from our income tax as a write-off against other income.
• We wind up with a net $850 in interest being paid out of our pocket to the lender because of the government rebate – providing we file the long form. Most pay the $1,000 in interest out of pocket and do not file the long form for the rebate.
• Or we could be debt free and simply pay the $150 in taxes to the government and keep the $850 in our pocket instead of paying it to a lender.

Which do you want? $850 out of your pocket or $850 in your pocket? Being debt free sounds financially better to me.

Why Pay Money Needlessly to Others?

To be successful financially, we need to stop paying money needlessly to others. You see money (currency) is nothing more than the storage of our time. We spend our time earning money (currency) so that we can exchange it for goods and services. Depending upon your abilities, you can receive more or less currency than others for your time. Lawyers may get $300 per hour for their time and others might make $10 per hour for their time. People incorrectly say, “time is money.” They should be saying, “money is your time.”

When we sign a promissory note or use the charge card, we just made a legal commitment to give (slave) our future time to pay it back to the lender. We also make a commitment to pay extra future time when we pay interest. Just look at $10,000 in interest that is added to purchases like a car, plus credit cards. If you are making $10 per hour, after deductions for income tax, you will have to work more than 7 months full time just to pay the interest. Why not get that time back?

Why do credit card companies, House Depot and furniture stores offer no payment, no interest until 12 months from the time of your purchase? They do it to sucker us into making purchases because they know most will not pay it off in the 12 months or even 36 months. The other secret is that they put the interest they would earn on their product right into the price of the product. We go right into the trap of extending our slavery to corporations and lenders that have put a legal commitment on our future time.

Six Steps to Financial Security

After 35 plus years in commercial real estate I entered into the financial services business and I discovered these six essential steps to financial security.

1. Increase Cash Flow
2. Manage and Eliminate Your Debt
3. Have an Emergency Fund
4. Proper Protection
5. Long Term Savings
6. Preserve Your Estate

When I was working in financial services, we had all the tools to do steps 4 through 6, but lacked the ability to truly address the needs of our clients for steps 1, 2 and 3. We now have the methodology and systems necessary to handle steps 1, 2 and 3. The Mortgage/Debt Reduction Plan (M/DRP) was developed first for myself in 2002 to help me eliminate 100% of my debt years earlier and to save thousands in interest. I was able to develop a system that requires a New Way of Thinking financially. It is designed to help our money work smarter . . . not harder. It eliminates debt years earlier and saves thousands in interest and creates a future principal benefit or increased cash flow of thousands of dollars by lowering the average daily balance of loans, thereby turning interest payments into principal payments and eliminating debt many years earlier.

Family Success Stories

We are sharing this information with families and helping them get out of debt years earlier. Here are some examples of our clients:

• J.P. and Susan went from 30 years down to 3.92 years. Future time saved = 26 years. Total savings and benefit = $184,881.
• Billy and Kim were set on course to saving 20 years and $571,000 in benefits.
• Carole and Geary saved 20.5 years and had benefits of over $1 million.

Every family’s experience is going to be different based upon their personal financial numbers. This program works with families that own a house and have good credit. (Families that have poor credit, if they apply themselves, can be helped as well.)

We are setting families on course to save over $17 million in interest and benefits from the program.

Please get on line at www.hc.mdrpms.com and sign up or request more information. We can work with anyone in any location.

FREE FINANCIAL ANALYSIS

Your no obligation analysis will be FREE. As long as you have internet access, we can teach and work with you long distance. Our process is as follows:

• We will teach you more about money and how it works.
• We will gather your financial information.
• We will provide a financial analysis of what your possibilities might be, including different scenarios when appropriate.
• With the proper information, you can make an informed decision to proceed.
• If what you see fits with your philosophy of what you would like to do financially and you want to work with M/DRP Marketing Services, Inc. in the elimination of all your debt, we will show you how the system works and set you up with your own M/DRP system customized for your use in getting out of debt.
• You control all your money. We do not ask for account numbers, etc. We install on your computer the M/DRP system for a lifetime of successful financial elimination and control of your debt.

As we share this information, what we are finding is that very successful financial planners are jumping on the M/DRP system for their families because they want to get out of debt and they want to share this valuable information with their client base.

Earn Additional Money – Become an Agent

If after looking at the program and starting to use it for yourself you find that this is something that you would want to share with others, we are actively looking for quality people that want to do the right thing for families. There is an income potential for those that want to participate with us in our mission to eliminate $11 trillion in consumer debt.

About The Author

Richard L. Harter, CPM, CSM, CRES - brings his 35 plus years of experience in the commercial real estate and financial services business. He is the principal architect of the budgeting, cash flow and management systems for major corporations, including Balcor American Express and Fox & Carskadon Financial Corporation, two of the largest syndication companies in the United States handling billions of dollars in commercial real estate. Richard Harter is considered to be one of the premier financial analysis developers in the nation. He has put together the same budgeting and analysis system for families that he has developed for the operation of major projects. Richard is a Certified Property Manager with the Institute of Real Estate Management and a Certified Shopping Center Manager with the International Council of Shopping Centers and has taught commercial real estate at the college level.