JoeTaxpayer

Well, it’s been a month since my “Suze on Variable Annuities” post which sparked some heated debate. So much so, that I decided to take a look at a newer product, the Fidelity Growth & Guaranteed Income Annuity and analyze it in a feature article titled “Another Look at Variable Annuities” on my main web page.

I must say, I find the process interesting. I’ve been a ’spreadsheet guy’ for some time and enjoy playing with the numbers. Please read the article and comment here, if you wish. The Fidelity link above should download a PDF of a brochure for the product I analyzed. If it doesn’t, please advise of the broken link.

Joe

written by JOE \\ tags: annuity, fidelity, income, interest, spreadsheet, suze, variable annuities

A couple weeks back in a post titled Money Merge Hyperbole, I discussed the Money Merge product offered by UFF, and focused on the fact that in their published example, it’s clear that the use of a HELOC doesn’t provide any incremental savings. A kind reader points out on his web site, My Debt Elimination Calculator, that HELOC can provide some savings depending on a number of factors. Among them, the time of the month that income comes in, when bills are due, and the relative differences in HELOC interest rate, mortgage rate, and checking account interest. I agree with this. I’m from the “numbers don’t lie” camp and Greg offers numbers to back up his comments on that post. In his examples, the HELOC system saves $2550 more than the prepaying method on a $100K mortgage. (This is for the more realistic example where the borrower doesn’t have the (unrealistic) extra $1000/mo, but a more reasonable amount which will reduce the mortgage to 24 years from 30. In this case, Greg’s software is capturing over $100/yr in extra savings by using the HELOC. I certainly can’t knock a system that beats what I saw on official MMA sites but only costs $30. Take a look through the link above.
One point I must concede is this: It’s easier to make a purchase (waste money) when it’s from cash in the bank than when you are taking that money as a HELOC withdrawal. Maybe that’s what the MMA people are trying to say, but that message is lost to me among all the hyperbole.

I will close with this question and thought. If UFF, with the chance to put their product in the best light, cannot provide an example with real numbers which shows any savings beyond that of the prepaying (which I can illustrate with a free spreadsheet) yet create this illusion of ’sophisticated algorithms’ taking millions of dollars to develop, how do they justify a $3500 price tag? On the flip side, you have been introduced to Greg, (whom I just met via my blog) a Computer Scientist who was able to write code providing a solution that actually impressed me looking at his example. I’m sure this debate isn’t over.

Joe

written by JOE \\ tags: debt elimination calculator, free spreadsheet, HELOC, interest, jferheart, mma, money, Mortgage, Savings, sophisticated algorithms, spreadsheet, UFF

First, a link to The Simple Dollar’s blog post on MMA, which generated more comments than I’ve ever seen on one posting. (Careful, this can take some time to load)

Get Rich Slowly also had a discussion that generated much interest.

WiseBread also gave a review of MMA with a similar conclusion to the one I reached.

United First Financial, who created the MMA concept, offers a video to explain the approach.

For some interesting hyperbole Vision Force 21 is an agent selling MMA.

Mortgage Acceleration LLC also an agent for MMA.

Integra Mortgage and Investment has another series of links with MMA comments and observations.

BankRate.com’s article on MMA

MSNBC’s “What’s a ‘mortgage accelerator’?”

CNBC’s interview with author Rick Edelman

Clark Howard fields a question on MMA

Dave Ramsey’s reaction to MMA

Another Dave Ramsey conversation (transcript)

An article by ActiveRain

Travis Mitchell kindly offers a years’ example of MMA in action, and in response I offer my own money merge account spreadsheet. I would be happy to entertain any intelligent dialog on the numbers presented by the two of us.

A page containing a summary MMA example which many agents link to.

The web site Money Merge Advantage, which inspired my post Money Merge Innumeracy.

The Age (an Australian site) has a great article, “Smoke and Mirrors“.

Kiplinger’s “Don’t Fall for This Mortgage Pitch”

(Please send a comment if you have more links to suggest or if you’d like a copy of my MMA spreadsheet. The sheet will let you see your own numbers, and will help you decide for yourself.)

JOE

written by JOE \\ tags: Finance, interest, Investing, investment, mma, money, money merge account, Mortgage, mortgage acceleration, mortgage accelerator, Retirement, spreadsheet, wealth