Money Merge Account Links
My MMA spreadsheet. (<<<Click here) is now available for download, no special request required. As always, please feel free to post a comment or ask a question.
I am pleased to make available a Money Merge Analysis Compilation, a PDF containing all of my MMA posts, so you can view them easily. Please advise if you find any typos or errors. The current revision shows R32 indicating it includes up to my Part 32 posting, which should be my last in this series.
A link to an announcement on the Australian Securities and Investments Commission regarding proceeding against the mortgage broker peddling the EquityExcel plan, which makes claims very similar to those made by UFirst Financial. (But wait – UFirst brags that such plans originated in Australia, so I guess it’s UFirst who is the copycat. Either way, the momentum is building to eliminate this scam.) This was send to me by a kind reader who works for the Consumer Action Law Centre in Australia, my thanks!!
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 3 videos 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.
iStockAnalyst’s article titled “Is The Ufirst Money Merge Account (MMA) a Scam?”
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. (note, the example here has been updated recently. It now assumes you have $1300/mo to send as an extra principal payment. Fortunately I have a copy of The Classic Example for you to view as well.)
The web site Money Merge Advantage (this blog has been suspended due to TOS violations, the agent starts and cancels sites frequently, Money Merge Rescue among them.) Jennifer Hartman who inspired my post Money Merge Innumeracy, is back with The Interest Saver.
The Age (an Australian site) has a great article, “Smoke and Mirrors“.
Kiplinger’s “Don’t Fall for This Mortgage Pitch”
A kind agent sent me a link to a video, Money Merge Account Version 4. I find little there of value, judge for yourself.
The Fraud Files Blog by Tracy Coenen, a forensic accountant and fraud examiner who investigates white collar crimes, including cases of financial statement fraud, embezzlement, tax fraud, and insurance fraud. She is the author of Essentials of Corporate Fraud and more than 100 articles on fraud featured in industry publications. She also kindly summarizes and links to my ongoing series Money Merge Analysis.
A great general summary from Searchlight Crusade.
A series of posts on Scam.com’s website.
Bargaineering.com has a brief article and series of post comments on MMA. The comments have taken an odd turn, a poster claims that MMA was divinely inspired. A faith based mortgage accelerator, I suppose.
If a spreadsheet isn’t enough for you My Debt Elimination Calculator offers an interactive program for $30. (Yes, less than 1% the cost of MMA, and from what I’ve seen “only” about 99.99% of the functionality. You decide.)
A post on Fatwallet debunking the agent’s claims of magazine articles regarding MMA somehow adding legitimacy.
(Please send a comment if you have more links to suggest or if you’d like to discuss my MMA spreadsheet. The sheet will let you see your own numbers, and will help you decide for yourself.)
JOE
April 12th, 2008 at 6:00 am
Please send me the spreadsheet you displayed amortizing the mortgage on MMA discussion. Very interesting, thank you!
Alan
May 5th, 2008 at 7:59 am
Please send me a copy of the spreadsheet you mentioned on Simple Dollar blog (comment 1217).Thanks.
May 8th, 2008 at 5:25 pm
Please send me the MMA spreadsheet, I’d like to see the numbers.
Thanks
May 13th, 2008 at 11:26 am
Please send me the MMA spreadsheet, I am thinking of buying the UFIRST product so please let me compare! Thanks for all your time.
June 3rd, 2008 at 7:14 pm
Please send me the MMA spreadsheet. I just received a UFirst MMA presentation at Panera. I read some of the comments at http://www.getrichslowly.org/blog/2007/10/01/is-a-money-merge-account-a-good-way-to-pay-off-your-mortgage.
I was suppose to meet the person trying to get me to buy the $3,500 software this Thursday. But, I thought I would do some research and also contact my financial adviser before meeting with him again. Any insight would be helpful.
I am pretty frugal and very financially disciplined. However, my expertise is not in finance, but in Network Engineering. As such, I must lean on other who are more educated in this area than I am, as others depend on me when they want large international networks. We all possess our own talents and this area is not one I possess, which is why I depend on a financial advisor, whom I haven’t talked to yet about this topic. I don’t want to be ignorant either, which is why I am researching now.
Thanks in advance.
(Sent. As an engineer, spreadsheets shouldn’t scare you, see the sheet, write if you have questions. -JOE)
June 13th, 2008 at 2:46 pm
Joe, I see your posting on this subject at several places. As you know we are in perfect agreement with your analysis. Thanks for the good work letting people know the truth about these mortgage products. As I predicted, because prime rate has gone down, making HELOC’s more attractive, the intensity of the folks selling these products has ratcheted up. When prime rate goes up with HELOC’s along for the ride people will start losing even more money from this product.
Would you mind sending me the spreadsheet?
June 27th, 2008 at 12:58 pm
Great comments. Please send me the MMA spreadsheet as well.
July 21st, 2008 at 8:36 pm
I’ve been looking into this whole MMA thing for a couple months now. I believe I can do it myself with a proper spreadsheet. I’d like to see if that’s true.
Please send me the MMA spreadsheet you developed. I MAY have to show it to a friend who recently bought into the MMA software a couple months ago…
July 25th, 2008 at 10:11 am
Joe,
Can you please send me the MMA spreadsheet. My husband and I teach a financial class and this would be a very helpful resource.
Thanks!
August 10th, 2008 at 12:54 am
Have spent a lot of time researching MMAs and have played with the numbers on my own enough to appreciate the advantages of having the proper software with all of the variables built into it. You can make it work on your own, but just getting close isn’t good enough when you’re talking about time and interest. It’s those subtlties that will make thousands of dollars of difference for some people.
Please send me the MMA spreadsheet. Thanks!
August 10th, 2008 at 11:03 am
Karen, I’ve sent the sheet so you can enter your own numbers. Variables? I have them covered, as the MMA agents own examples show that just paying principal at month end beats what the MMA software suggests. You want a HELOC? Get one. If the rate is near or lower than the rate on your mortgage, the HELOC shuffle as I call it, can provide some savings. But see the sheet as I left $3500 as the first prepayment. That would save you 16 months on the mortgage and $16,657 in interest.
Once you understand that the savings comes from your own money, from paying down principal, you’ll save yourself the extra expense, and do it yourself.
Joe
August 10th, 2008 at 1:05 pm
Joe:
Thanks for the spreadsheet!
Unless I’m missing something, here’s what I think the MMA software might do that the layman cannot do as effectively. Let me try to explain what I think the variables are that could possibly make a difference.
I haven’t purchased the MMA software and the only exposure I have to it is the tons of information and videos I’ve seen online. But, if I’m understanding it correctly, the MMA software analyzes your spending habits (since all your income and expenses go through the HELOC or ALOC) and takes everything into consideration. Such as interest rates, how the interest is calculated on your mortgage and your ALOC (closed end vs open end) and based on everything it determines the optimum time AND amount (to the penny) you should make another payment to your mortgage to do yourelf the most good. I just don’t see how the average person can duplicate that much analysis. I don’t know the formulas for comparing these two types of interest calculations and make sure I have enough left over to pay the upcoming bills based on when they’re due,etc. For those with lots of money and years at stake it could make a big difference. A payment made for the wrong amount or the wrong time could make a big difference over a 30 year note. I personally don’t have that much at stake. I only have 3 years left on a 15 yr mortgage with only about $24,000 to go.
No matter how you look at it, I don’t think $3500 is a fair price in spite of sophisticated it seems to be. I think they assume that people will jump at the chance of spending $3500 to save $100,000 and knock 10 years off their mortgage. And, by the sound of things, people are. They make it doubly attractive by showing you that their $3500 comes straight out as the first expense of the ALOC so that you don’t have to have the cash money on your own up front.
Surely, there is someone out there with the intelligence to duplicate what they’ve done and market it at a much cheaper price to the public.
Until then……I’ll continue to use my own intelligence to the extent I can and do the best I can my own way.
Thanks!
August 10th, 2008 at 2:51 pm
Well, this is what I just posted as a comment elsewhere;
“Tony – prepayment does account for 98-100% of the savings, but there are circumstances where the HELOC does add a bit to that. In the classic example, $5000 of monthly flow with mortgage due at month’s end. If you look at this person’s checking statement, their average balance may be $3000, and earning 1%, if that much. The flip side is that if he used a HELOC, he’d have an average HELOC balance of $2000 to make a full $5000 available to pay toward the mortgage with the prior month’s payment. The mortgage rate may be 6%, so he saves $300/yr by making that prepayment. The HELOC ave balance is $2000, maybe 8%, costing $160/yr. And he only would earn $30 on the average $3000. So, in this example, he gets ahead by $110/yr. A HELOC typically has a $50/yr fee. So in the end, the savings is tiny.
When MMA agents present this, they somehow attribute the magic to the HELOC process, but as you can see, the savings while greater than zero, are not significant by any means.”
If you look at the agents links of examples, and then go to my sheet, entering $1000 as a monthly extra payment, you’ll find the HELOC benefit to be close to zero. Not even enough to pay off the cost of the software. The fuss about timing and calculations are much ado about nothing. Capturing $60 per year is meaningless compared to the effort of juggling a HELOC and needing to sign into the software for every transaction.
Most people who are interested in this approach should simply do two thing, first open a HELOC for a small amount (10-20K). Then at the end of each month, put all extra money into their mortgage as a prepayment. The classic example shows a $5000 cash flow, $1200 mortgage payment, and $1000 extra money each month. The smoke and mirrors comes from their insistence that you are not really increasing your payments, your cash flow does change. Huh? They tell you to write a check from the HELOC, but then put all your money back into it as a payment. So that extra $1000 is exactly where all the savings comes from. That is indisputable.
Unfortunately, few agents have any clue how the math works, but once you understand it, the fog lifts and you save $3500.
Thank you again for visiting my blog and joining the conversation.
Joe
August 16th, 2008 at 3:47 pm
Joe,
Great website. I’m interested in a lot things you have posted and I admire you for the time you have spent providing meaningful information on everything from investing to retirement planning.
As to the money merge system, I’m willing to cut and paste every application from my MMA account tracking tool since I started with UFF on April 10, 2008. I would prefer to just give you my password and login information so you could just monitor the activity, but my personal account numbers are listed so I can’t do that. You can perform any kind of comparisons you want and I’ll keep you updated every time I make a new entry into the software if you like. Obviously I’d prefer not doing this by making posts on this blog, but I guess that’s ok if it’s the only means available. Let me know. Though there are a number of variables that go into to defining value, I’m open to being seriously challenged on the math variable.
August 19th, 2008 at 10:17 pm
I have included a loan scenario for you to pick apart using a few different strategies. I was approached by a ufirst representative. Snake-oil or reality?
Loan Scenario:
Loan Amount $285,000
Rate: 5.625
Term: 5/1 ARM 10yr. IO 5/2/5
Xtra $300 payment towards principal each month
24.5 years to pay off
Paid $727,834.73
Bi-Weekly
27.8 years to pay off
Paid $815,962.05
Bi-Weekly w/$300 added towards principal each month
17.6 years to pay off
Paid $556,709.23
MMA software says
19.0 years to pay off other debts included + $3500 software fee
Paid $483374.76
Where am I wrong?
August 20th, 2008 at 2:15 pm
You don’t offer all the numbers needed for analysis. What MMA excels at is treating your extra funds each month and the interest savings from sending that money to your mortgage as savings from their software. This is nonsense, of course.
Do you already have a HELOC set up? How much other debt and at what interest rate? In your monthly budget, how much is extra at the end of each month? That extra money is where all the saved interest will come from.
Joe
August 22nd, 2008 at 10:44 am
extra $300 per month discretionary. no other debt. HELOC is no charge to set up. Rate is 4.99% variable.
August 26th, 2008 at 2:42 pm
wurdy – I am looking at this and trying to understand your question and situation. You say it’s a 5/1 ARM but for the first 10 years it’s interest only? This implies a payment of $1335.94? A fully amortizing loan would be a payment of $1640.62, more than $300 higher. That implies to me that you don’t really have ‘extra’ money. That $300 would be needed for a 30 yr payoff.
The rest of your math I don’t follow. A bi-weekly should turn a 30yr mortgage into something closer to 24.8 months, depending on the rate. 27.8 doesn’t make sense to me.
Last, your Bi-weekly +300 vs MMA. ‘Paid’ = the whole mortgage principal+interest, correct? How can you pay the mortgage off in 17.6 years, yet pay more interest than if you pay it off in 19?
Since rates have little room to go down from here and a long way up, I do suggest you continue to pay it down. The impact of rising rates will be less if you hack away at the principal.
Joe
August 26th, 2008 at 10:11 pm
Dave – it need not be so complicated. All I’d wish to know is the starting numbers, i.e. mortgage principal, interest rate, remaining term, and total amount of cash you then sent to the HELOC (minus the amount you drew back out to spend). Then at the one year mark, what were the two balances on the mortgage and HELOC?
Even the agent’s own numbers show little to no gain by using HELOC, and even a $200 annual gain is hardly enough to pay back the $3500. You see, if MMA is having you pay off your mortgage in 10.4 years, the HELOC shuffle better save you close to $453/yr just to pay for that software.
Now think about that. The HELOC use claims to turn idle cash (from checking) into a higher return, same as your mortgage, right? At 6%, that would be $7833 in average daily balance in your account.
If the above sentence made no sense, consider this: If you had a checking account that yielded the exact same rate of interest as your mortgage, there would be no need to even think about the HELOC shuffle, right? So let’s see how much you’d need in your checking to get you $470/yr in interest. $7833. But even the MMA agent examples only show a maximum $5000 coming into the account each month, there’s an average balance closer to $3000 or so. Which can only gain you $180 or so each year. Even if the average balance were higher ($5000 is the limit) that only gets you $300/yr. But we already agreed that the program cost is $453/yr!
Joe
September 2nd, 2008 at 1:08 am
You have gathered more information on one page than anywhere else on the web I have found so far. Thank you for commenting on my blog and bringing your blog to my attention. Much appreciated.
I would like a copy of your Excel spreadsheet. It appears to me that your spreadsheet example is simply a extra payment method. Am I correct? Please clarify if otherwise. None of the comments and replies appear to take into account the fact that you are depositing your income into your HELOC. This technique cancels out a portion of the interest being charged on the HELOC due to the lump sum transfers to the mortgage. Also the use of a secondary credit is not mention, thus prolonging the time that your income is canceling out the interest in the HELOC.
Also I counted the number “$3500″ seven times in the entire comment section thus far of this topic. Their are plenty of companies out there that are selling their own version of the MMA software ranging in price from of $297 to $3500. I have listed at least 10. I definitely would not be willing to pay $3500, but I would entertain a price under $500. Especially if they were willing to refund me my money if I am not satisfied with their product.
Guaranteed, capitalistic America will bring the price down very quickly if the MA programs are deemed viable. If you don’t want to pay $3500 for the Rolls Royce of MA programs, shop around. If the program doesn’t work after a few months to your favor stop using it. The worst you would be out is $300, the fees for a HELOC, and the time using the product. The best that could happen is a earlier payoff on your home and a lot of savings in interest.
September 7th, 2008 at 9:58 pm
Please send me your spread sheet. But, I would like for you to entertain the option I am using. Every year, I transfer $25,000 from my mortgage to a low (0 to 3%) or no cost credit card and then pay it off over the coarse of the credit card terms. Isn’t that better than getting a heloc or paying extra payments?
September 18th, 2008 at 2:11 am
Please send me a copy of your spread sheet. I have looked into this and could not spend 3500. I guess it makes me happy I didn’t. I need to get committed to paying the extra on the Mortgage. I think that is why the MMA works for some. It gets them to do it because they just spent $3500.
October 20th, 2008 at 5:42 pm
Joe,
Thank you for creating this blog. I was approached by an agent and almost signed up to become an agent until he told me that he has sold only seven MMAs since March of this year, which is only one a month! Not something that I could live on…Could you please send me a copy of your worksheet?
Thanks again…
November 16th, 2008 at 8:58 am
I have enjoyed this blog and also have been approached by an agent. I am very interested in doing something, however; I am not a fan of everything being online. If UFF shuts the site down, for any reason, I’m stuck. If possible, please send your spreadsheet so I can compare to other options I have been looking at.
Thank you
November 16th, 2008 at 7:40 pm
I sent you the sheet. In the interest of complete honesty, my understanding is that the latest version of the MMA software resides on the client’s computer not a UFF server. Still, useless software on your own computer is still useless.
Joe
December 14th, 2008 at 11:09 am
Thanks for the website, Joe, I’ve been contacted by a UFF agent and am entertaining other scenarios. Would you please send me your spreadsheet so I can see what you’ve set up? Thanks.
December 22nd, 2008 at 10:57 pm
Very interesting comments. Please send me the MMA spreadsheet.
Thanks + Happy Holidays
January 16th, 2009 at 8:21 pm
You may wish to add this link – as you see the Australian regulator continues to take action against claims that you can pay off your mortgage sooner with no increase in monthly payments or changes in their lifestyle.
http://www.fido.gov.au/asic/asic.nsf/byheadline/AD08-79+ASIC+commences+action+against+Sydney+mortgage+broker?
Thankfully such claims are now rare in Australia.
Carolyn Bond
Consumer Action Law Centre
Melbourne, Australia
January 17th, 2009 at 4:36 pm
I added it, thank you very much for sending this to me!
Sounds like our MMA folk here are making exactly the same claims, maybe our SEC can spare an agent and shut these guys down, too.
January 30th, 2009 at 10:46 pm
Please send me your spreadsheet. I have enjoyed reading everything about MMA. I almost bought into the software, but after much reaseach realize that it is just another multi-level marketing scam. Thanks for all your input. I have several credit cards as well. Will your program work with those as well.
January 30th, 2009 at 11:36 pm
I sent the sheet.
There’s no magic surrounding the credit cards. Line them up from highest rate to lowest. Make minimum payments on all cards, and send any extra cash toward the highest rate card. This is the fastest way to get rid of the credit card debt. Also – it can’t hurt to call the banks with card rates above 10 or so percent and just ask for a lower rate. They may say ‘no’, but likely half will give you a better rate.
Any question regarding the sheet, please ask. Thanks for visiting.
Joe
March 13th, 2009 at 10:25 am
Joe,
Thanks for the spreadsheet. Can you send me the password so I can unlock or send me an unlocked copy? I want to re-format all the dollar amounts with commas – easier for me to read.
Thanks much.
March 13th, 2009 at 2:13 pm
I’ve updated the sheet to better format the values with the commas as well as adding a 15 yr mortgage version.
Thanks for visiting!
March 25th, 2009 at 7:19 pm
Thank you Joe.
March 28th, 2009 at 10:01 pm
Joe,
Added your blog to my favorites. Haven’t looked around that much yet. Looks interesting. Of course I have been visiting back and forth with you for almost a year on that MMA post at simple dollar. Just had no idea you had quite this breadth of knowledge.
One thing though about your MMA spreadsheet. In old versions of Excel and Lotus(12yrs or more), both have Mortgage/Loan and Budgeting spreadsheets where you can simulate making prepayments, changing interest rates, Loan Length, Income, Expenditures and so forth. I had never seen a LOC linked to all these items until Sydney Financial was presented to me and then UFF and all the others I found on my own about a year ago.
Based on having a 2 year subscription to Harj Gill’s Speed Equity,which I got on the cheap, and seeing about 10 others, I STILL think Greg’s Mydebteliminationcalculator.com version at $30 is by far the best value for someone employing a LOC shuffle to a mortgage or other debt. I still haven’t bought the code, because I bought the $80 two year subscript with book.
I know you mention Greg’s calculator, but don’t you think it is pretty decent software to play with budgets/loans and a LOC all together??
Thanks for bringing me your direction!
March 29th, 2009 at 7:45 am
Thank you for visiting, Royal.
With most of the savings being in the prepayments, that was as far as I got with the spreadsheet. You can see, Greg is listed above, and recommended for those who want the extra function.
I realized a few months back that sifting through a blog for posts was a little crazy and started my MMA Compilation, second link up top. I try to keep it pretty current, it will always state its last revision.
If you find a site on this topic that you think is interesting, feel free to drop me a note. Take care.
May 20th, 2009 at 8:19 pm
Joe, I downloaded your spreadsheet, cool stuff… trying to figure out how to adapt to an interest only loan, can you help?
Many thanks in advance!
May 27th, 2009 at 1:45 pm
Could I please have a copy or the spread sheet? Id like to get out of debt faster, and I am glad that i found a good source to ask…
I also was approached by an agent… i thought i could do better things with my 3500 dollars
If U 1st was smart, they could sell alot more if they charged less….too bad they are so greedy, im sure over half of that is for commission…
Thanks Joe
May 27th, 2009 at 2:09 pm
Note – it’s the first link up top the Money Merge Account Links page you visited. Let me know if you need help with the sheet.
June 18th, 2009 at 5:58 pm
Hi Joe,
You recently visited my blog here on wordpress. I must say, I’m very impressed with yours. I am an agent for the MMA, but I’m also a client. I agree that I wish it was more affordable, and find the cost a barrier for most. Perhaps they’ll wise up and eventually decrease the cost of the MMA so that more “regular Joes” can afford to take advantage of it. When you are as financially astute as you are, I don’t see why you would bother with it, but some of us aren’t, and so we find it a useful tool. Nonetheless, it sounds like we agree that the quicker you pay off your mortgage the better! I just wanted to compliment you again, this is a great blog, I’m just now starting & hope to learn much from your content here!