I’m back with another post on the mortgage acceleration scam by UFirst called the Money Merge Account. I continue to get comments on a number of my posts in this ongoing series, and even though I’ve moved on from the weekly updates, I’ll still add a post here and there when appropriate. This week, I was led to a YouTube Video. Success and Progress: Lunch. In case the video is taken down**, let me summarize this one minute clip. “If instead of spending $7 per day on lunch, you invest $2000/year at 6%, over a 45 year career, you will have $10 million.” Note, the video itself doesn’t mention UFirst, but it was linked from their fan page on Facebook, and the posters YouTube account references MMA. A very well done video, but one problem, the numbers above don’t come close to the claimed $10M. Before I tell you the return you’d get, I’ll share how close I got using my fingers. Remember the days before calculators, we counted on our God-given ten fingers. The rule of 72 says to take that 6% and divide into 72 to figure the number of years to double. So it takes money 12 years to double when invested at 6%. When you have a yearly deposit of the same amount each year, the lump sum figure is somewhere in between. In other words, that $2k/yr for 45 years will be equal to a lump sum invested over some number of years, certainly less than 45, it wasn’t there the whole time, but more than 0. Kind of obvious, no? I don’t know, really, every time I claim “obvious” I’m told the math is beyond mere mortals. Back to that 12. If the time-weighted average were 24 years, our $90K would double twice and we’d have $360K, if 36 years, $720K. No where near that $10M. Even if the whole $90K were invested for the full time, and then some, after 48 years it would be $1.4M, still hardly $10M. Note: The video author rounded $1750 to $2000, first claiming 250 work days per year, but then saying ‘about $2000’ per year. That’s okay. This is what discussion and ‘back of napkin’ math is about. 36 years of 6% will actually turn $90K into $733,252, a bit more than my $720K counting on finger calculation, a 2% margin of error. 
The punchline to this critique is that the result is nowhere near $10M, it’s actually $425,487. Still between the $360K and $720K as I guessed, until I had more computing power available, but a factor of over 20X from the agent’s claim. With nearly 600 hits on that video, one imagines that one of the hundreds of agents would catch this kind of error, or more so, that UFirst would notice it before publicizing on their blog. With claims that their software watches every penny, isn’t it a bit scary that an error of this magnitude slips by, and no agent steps up to correct it? For Pete’s sake, we are talking about being wrong by a factor of 20, I’m not splitting hairs here. The software has its own errors, already discussed in past posts. I’m shocked this scam continues. By the way, a 16% rate of return would produce nearly that $10M, but no one expects that kind of growth. No one. Call it a simple mistake by the video poster, I’ll accept that. It’s that not one of 600 viewers had any issue with it which concerns me. And also why no agent catches any mistake when they create their so-called analysis when roping in their next victim. (phone credit – Me. It’s my favorite calculator, small, portable, accurate. There are newer models available which help to make this scam look more like simple math and less like magic.)
Joe
** Eventually, it did come down. Some of the messages I left were removed, but others chimed in, and with no comment back to us, it was simply removed.
