I recently had the rare opportunity, thanks to a rogue agent, to view the V4.2 software and took a few snapshots of my scenarios. For me, the most difficult scenario to get any agent to model and email to me was for when the client has no extra money. Since UFirst, through a combination of “Sophisticated Algorithms” and “Factorial Math” claims for this product to be the “Financial GPS” which is the fastest way to pay off your debts, one can only see the impact MMA and the “HELOC shuffle” has by isolating these variables from the use of your own money to pay down your own mortgage. So let’s see what the MMA system tell us the impact it can have when we don’t have extra money to add each month. First, the cash flow:
This is the standard scenario, with $5000/mo income, and a $200,000 Mortgage at 6%. You can see the total monthly expenses are $5000, which includes the mortgage at $1199.10, and the monthly cost of funding the MMA software at $3500, 9% with a 30 yr payoff, $28.16 per month. Perhaps not so remarkably, the years to payoff is 31.33. Huh? What happened to fastest way to zero? What in the world did MMA do that could possibly be worse than simply ignoring the software and just paying both the mortgage and HELOC for exactly 30 years? It’s very simple. The software is broken. As I started to discuss a couple weeks back, the whole MMA system is based on lies, deception, and obfuscation. Let’s look now at one month of transactions based on the details above.
Now, you can easily see why it takes an extra 16 months to pay off the mortgage. Despite the fact that we told the program there is *no* extra money, it still decides that the optimum amount to send to the first mortgage from the HELOC is $5222.40. This balance cycles up and down within the month, but on average, increases month to month, and takes 16 months worth of full mortgage payment to pay it off in 30 years. Now, you know that no agent will be able to explain this, they should say that if you truly have no extra funds, you should not use the program. In reality, they will start to ask you where you can cut back, even to where you have $100 available to get the program going, and then project future raises and other income. After all, you got that far and they have a sale on the line. Now, instead of buying MMA and paying it off over the life of the program, how about taking that $28.16 and just putting it toward the mortgage. Here is my spreadsheet view.
You can see the interest saved vs original projection is nearly $17,000, and the mortgage is cut down to 338 months or 22 months earlier than 30 years but a full 38 months sooner than UFirst’s own forecast. MMA costs you $45,696 more in interest than my ‘do it yourself’ method. As the agents say, “it’s math, not magic”. Indeed. Just for laughs (yes, I have a strange sense of humor) I told the software to adjust the HELOC interest rate to 2.5%, which is my current rate happens to be. This is the new forecast, below.
Two points to note on the new scenario. First, even with access to 2.5% money, the total interest is still more than $2,000 higher than my projection. Second, why in the world did the software use even less HELOC money, now that it’s so cheap? It only sent $549.23 to the first mortgage as a prepayment? Yet, when the HELOC was 9% it sent nearly ten times that amount? This is software you’d trust? This is what they mean by “watching every penny”? I must admit they are right about one thing, I can’t do this on my own. I’m not that stupid.
Note: for easier viewing, you can click on the images above and open full size.
If I can access the site again, there are a few other scenarios I’d like to run for a future post, I’ve shared what I have so far. If an agent tells you to talk to a happy user, remember that user is likely an agent as well, just helping to make a sale. Send them both my way, by the time I’m done, they’ll go home crying.
Joe
Yea Joe, you got it all figured out, don’t you……..and all the people listed below are a bunch of dumbasses who don’t know anything, right?? Now refresh my memory, who are you and what is your credibility??
What the Experts are saying about United First Financial’s Money Merge Account;
Brian Topor – 2007 ,Founder/Publisher of Broker Banker Magazine and BrokerBanker.com
Andrew Wait – April 2008, Founder/Publisher of Personal Real Estate Investor Magazine.
G. Edward Griffin January 2008, Founder of Freedom Force International, film producer, author, political lecturer and Certified Financial Planner.
Douglas Andrew, Author of “Missed Fortune”, “Missed Fortune 101” and “The Last Chance Millionaire.”
Glenn Beck, Host and star of the nationally syndicated radio talk and a host of CNN’s Headline News.
Mark Victor Hansen, Co-author of the ‘Chicken Soup for the Soul’ book series. Author of The Power of Focus, The Aladdin Factor and Dare to win. Mark is also the President of One Minute Millionaire LLC.
Ernst & Young, In July 2008. the founders of United First Financial received the Ernst & Young Entrepreneur of the Year 2008 award in the financial services category of the Utah Region.
I think that I will believe them Joe !!!……………….. I rest my case.
(Editor’s note – I received an alert that the links to discovermoneymerge.com are dead, so I removed the dead link from Terry’s name above.)
Well, Terry, as I discovered, most agents are not willing to discuss numbers, which form the basis of my approach. I offer a bit of math, you offer biographies of 6 authors, 3 of whom I find are paid speakers. For the right amount of money, Tiger Woods, Former President Clinton, or Billy Joel will speak at your function. It’s considered bad form for a paid speaker to bad mouth a product sold by the company who paid for their speech. The E&Y award, as mentioned many times across the web, was not an endorsement of the product, all in all it was pretty meaningless. My MMA Links page has counter examples of known authors who agree with me that it’s a waste of time and money. So does Kiplinger’s magazine. Have you heard of it? Aside from recognizing Glenn Beck’s name I’d not have recognized any other one you list if I weren’t actively debunking MMA.
You can believe what you wish, but this is not religion, it’s math, and for purposes of this conversation, my credential is the A+ I got in fourth grade math class. More than that isn’t needed to understand MMA.
I usually don’t resort to name calling, it’s one of the logical fallacies I try to avoid, along with “argumentum ad verecundiam” or appeal to authority. The product is garbage, so instead of improving it or admitting its failure, you attach names to it, as though these people bring relevance to it. Truth is, the fact that you resort to this just proves my point. The numbers speak for themselves.
I added your agent link to your name, even though you chose not to disclose that you are not an unbiased poster, but another agent who has no reason to want to understand the numbers.
(You rest your case? You made no case at all, Terry, sorry.)
Joe
Thanks for visiting, Craig, author of the best “Factorial Math” debunking post I’ve read.
Terry (UFirst agent #839271),
Nice appeal to authority. Each of those endorsements has been explained. The magazines, in particular, are in the business of endorsing products for a fee. E&Y sponsor an entrepreneurship award, but do not review the nominees (you could ask E&Y|Ethics, but UFirst has told you not to). Glen Beck was paid to speak at a UFirst convention. The list goes on.
You have chosen to believe promotional fluff pieces and marketing, instead of opening up your own software package and running some numbers. Your agent ID indicates you’ve been around UFirst for a couple years, at least. That you’ve been there that long and still don’t understand that the MMA is fundamentally flawed, is inexcusable.
Joe has laid out just how underperforming the MMA is, complete with numbers right from the MMA software itself. To dismiss what we have been telling you all along was willful ignorance. To dismiss numbers from your own software proves that you’re nothing but a scam artist.
And thank you, Joe, for completely removing the “How would you know if you haven’t used the MMA?” argument from UFirst agents. Not only have you and I used it, but by using it you proved once again that the MMA sucks.
Joe, now that these silly programs have made it to late night infomercial (I have seen way too many), no one really needs to debunk the math/myth. Late night infomercials never pass the sniff test. MMA has many imitations, which I guess is the sincerest form of flattery. Copycats always show up when there is easy money to be made from hustling suckers. Thanks to you there will hopefully be a few less suckers and a few more informed home owners.
Brilliant blog post Joe. It’s just about good enough to be the single entry on the FatWallet summary post in the threads discussing this scam.
I have a compliment for the UFF people, too. The website is quite nicely designed, judging by by the screen shots.