Announcer: Welcome to Creating Wealth with Jason Hartman, President of Platinum Properties Investor Network in Costa Mesa, California.  During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing, fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible.

Jason is a genuine self-made multimillionaire, who not only talks the talk, but walks the walk.  He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities.  This program will help you follow in Jason’s footsteps on the road to financial freedom.  You really can do it.  And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.

Jason Hartman: Good day and welcome to another edition of Creating Wealth.  This is your host, Jason Hartman, and boy, has it been a crazy, crazy week.  We have the U.S. government entering into a whole host of new businesses.  Soon they may own Wall Street.  Certainly, they now own Fannie Mae and Freddie Mac, and a big insurance company, AIG, American International Group, as well.  So we are seeing a huge change in the American economy, the American way of doing things, and thus, it impacts the entire world, the entire financial world.

Think about this.  This is really socialism for the rich and I tell you, one more time just leads me to, again, stress to everybody listening, tell your friends – whatever you do, as much as possible, be a direct investor.  Don’t leave yourself susceptible to other people with different agendas than your own, who are not acting in your self-interest.  The one thing we can pretty much be sure of most of the time, maybe 95 – 99 percent of the time, is that people will always act in their own self-interest, and that self-interest, if it’s aligned with your self-interest, that’s a wonderful thing, if there’s an alignment of interest.

But unfortunately, on Wall Street and in our financial system and in our government, certainly there is usually not an alignment of interest.  These crooks, and yes, I’m going to call them crooks because that’s what so many of them are.  I won’t say most of them or all of them, but so many are just downright crooks.  They are using your money to enrich themselves on Wall Street.  In government, they’re using your money to make themselves more powerful.

That’s why I believe that the best government is a small government because a long time ago, in my 20s, I did a lot of charity work and I was on different boards and I got to see firsthand how the goal of any organization, any committee, any charity is to perpetuate its own existence and to increase its own influence.  And usually, that is not in alignment with the stated goal of providing affordable housing to people or providing social programs to people or whatever it is.

Anyway, I won’t go on and on with this, but it’s just really beyond ridiculous.  Make sure you’re a direct investor.  Make sure that you have as few middlemen handling your money as possible.  So I say buy income properties.  Exist as much as possible in the real economy rather than in the smoke and mirrors Wall Street economy or the economy of sophisticated financial instruments sold to you by people who went to great schools and wear nice suits.

You know what the real economy is?  It’s where someone needs a place to live and they can rent it from you.  And guess what?  The population of this country and around the world is expanding dramatically, at a rapid pace, and you know what?  The real economy says people need housing.  Simple, simple, simple.  Lock in your cost of borrowing for the next three decades.  Lock in your cost of construction for the next four, five, six, or seven decades, or maybe even longer, and follow all of the other advice we’ve talked about on the previous 68 shows here on Creating Wealth, and you will be the winner, I believe, as consumption for construction materials continues to increase around the world and certainly in the United States, and it’s just a great equation.

Let’s take two minutes right now to listen to my last episode of the Speed of Money.  I hope you’re a subscriber.  If you are, you’ve already heard this.  But it’s a brand new episode, so you probably haven’t heard it.  Just fast-forward two minutes into this podcast and you can skip this part, but it might be good to hear it again anyway.  And if not, go to www.jasonhartman.com, go to the Speed of Money.com, go to the iTunes store if you’re listening through iTunes, type in Jason Hartman and make sure you subscribe to our new show, called the Speed of Money.  It’s only two minutes long every week, so that’ll give you a good overview.

Let’s listen in and then we’ll take some Ask Jason questions, which I think will be very relevant, and then I want to talk to you about a very, very innovative way to save on interest on your mortgages, on your home, on your rental properties, and actually on other consumer debts as well.  I think you’ll find this very intriguing.  So let’s pause and listen to this two minutes from this latest Speed of Money edition.

Speed of Money

Good morning.  This is Jason Hartman with the Speed of Money.  The blinding pace of dramatic news stories continues in the financial industry.  The boom, the bust, the government bailouts, the cycle rolls on and on.  I want to thank those of you who went to my website, www.jasonhartman.com, and requested my free CD.  You know from listening how hard I stress the importance of being a direct investor.  In this era of almost daily trillion dollar news stories, it’s more important than ever to have direct control over your money and direct control over your investments.  Be a direct investor.

I have something called the Ten Commandments of Successful Investing and No. 3 is thou shalt maintain control.  Think about.  When you do not control your investments, you put your financial future in the hands of somebody else, who has their own agenda and their own interest at heart.  You leave yourself susceptible to three major problems when you relinquish control to somebody else.

No. 1, you might be investing with a crook.  Certainly, the scandals on Wall Street are endless.  There are certainly scandals in the real estate business and every other business as well.  So don’t relinquish control and leave your investments in someone else’s hands for that reason.

No. 2 problem, you might be investing with someone who is just incompetent and they will lose your money through their sheer stupidity.

No. 3 problem, assume they’re honest; assume they’re competent.  They take a huge management fee off the top for managing the investment.  We’ve seen astronomical salaries of CEOs on Wall Street, where they’re paying themselves a fortune, while their company is going down the tubes.  Be a direct investor.  Protect yourself from this problem.

Investing in the stock market these days feels like a game of musical chairs.  Last week, Lehman was left standing when the music ended.  And Merrill Lynch sold and it’s one story after another.  Are your stock investments next?  This is Jason Hartman.  Join me next week here on KABC 790 AM for the Speed of Money, and in the meantime, visit www.jasonhartman.com.

Okay, we’re back.  Let’s take a question here from one of our listeners, Mike Meroe.  Mike, thank you so much for asking this question.  I appreciate it.  We always appreciate when you go to www.jasonhartman.com and complete the Ask Jason questions.  Most of them we’ll answer on the show.  Some of them may be for various reasons we will answer individually and not air them.

“Hi, Jason.  Before I ask my question, I must commend you and your staff on two things.  First of all, I appreciate the variety and quality content that you pack into your podcasts, especially the occasional departure from straight up investing to the more important issues of life, like character and integrity.”

“Speaking of integrity, that brings me to my next comment.  I recently had a concern over an issue with one of my property managers for my Columbus, Ohio, property.  After just one email to your investment counselor team, they immediately got involved and fixed the issue.  It had been almost a year since I bought the property and they had indeed stayed in touch with me through the journey, just like you promised.”

“I have a simple question for you.”  So Mike, that’s great.  We try to keep our promises as much as we can and again, we offer free support through the life of your investment.  As long as we’re around, we’re going to be supporting you and helping you with your property managers and your rental coordination and whatever questions you have.  So, of course, everybody listening, all of our clients feel free to call us anytime.  In fact, even if you are not a client, if you’ve purchased a property through someone else, and you got yourself into a little bit of trouble, we will try to help you as well.  We’ve done it many times for people and we believe this goodwill pays us back tenfold.  It always seems to come around, so we’re happy to do it.”

Okay, so going on here.  Mike goes on to say, “I have a simple question for you.  You often speak of making sure the property makes sense the day you buy it and I was just wondering if you could take a moment to expand on that and itemize the test that you use to make sure the property makes sense.  Thanks and keep up the good work, Mike Meroe.”

Mike, thank you so much for that great question.  I’m sure a lot of our listeners would love to hear the answer because they probably have a lot of the same questions as well.  So of course, we have talked about this making sense the day you buy it issue on previous shows, so go back and listen to those.  But here, I will just comment on a couple of things.

No. 1, the most important concept is that of sustainable investing.  Make sure that your investments are sustainable from a cash flow perspective so that you’re never forced to sell a property at an inopportune time.  Now, there are two major reasons that people get themselves into trouble with a real estate investment.  No. 1, they bought on a speculative basis.  They bought a property that never made sense, they never should have purchased.  They were gambling; they were speculating, and they were not buying for the long-term buy-and-hold philosophy, which we recommend.

So cash flow perspective, of course, that goes back to what?  It goes back to the RV ratio.  Remember the most important metric when evaluating a property is that your cash flow makes the properties sustainable.  Now, I don’t mean from a positive or negative cash flow perspective.  I mean from a ratio of value to rental income perspective.  Our ideal RV ratio is .7 percent.  A good way to remember that might be to just remember our friend, secret agent 007, James Bond, .7 percent of the value.

So, in other words, if you have a $200,000.00 single-family home, we would like you to receive $1,400.00 per month in rental income on that property and we think that makes it a very good deal based on today’s market and today’s interest rates and so forth.  So .7 percent is ideal; .5 percent is acceptable.  So that $200,000.00 single-family home would rent for $1,000.00 per month.

In most of the bubble markets around the country, the usual RV ratio or rent-to-value ratio we see is .3 percent, thereabouts.  So if a $200,000.00 property actually existed in one of those markets, it would only rent for $600.00 per month.  Applied to a larger property, say it’s a $2 million apartment building.  So that $2 million building, ideally, would generate $14,000.00 per month in income or an acceptable RV ratio of $10,000.00 per month in income.

In a bubble market, a $2 million house or condo, high-rise condo in Miami – those things are just crashing and burning as we said they would – would only bring you, if it brings you anything, by the way, a very small number of like $6,000.00 per month, which for the $2 million condo is just not enough.

So that’s the RV ratio metric.  Now, of course, there are other things you need to consider, like location, general prospects for that market, for that neighborhood.  We like more base-type housing, more entry-level type housing.  We don’t really like the bottom of the market very much because there you get a really low quality tenant.  We like above the bottom a little bit, in sort of pseudo-yuppie areas that are still really inexpensive.  These are usually suburban type areas and by the way, I’ll address this on a future show.  I know there’s been some talk with rising gas prices about a move away from suburbia.  We don’t really see that trend as having much credit yet, but we’re kind of watching that argument and that debate and keeping track of it.  And we’ll talk to you about that on future shows.

Of course, you want a property in a nice neighborhood.  Ideally, you don’t want it next to a landfill, a jail, an airstrip with a lot of noise, or a railroad track, or any of these other factors that wouldn’t be good.  So when you’re buying a property through our network or through anybody, always ask the local developer, the local agent, are there any factors, which might negatively affect that property.  Are there any noise issues, quality of life issues?  Is the shopping center close by so your tenants have a convenient place to shop?  Are schools nearby?  What are the schools like, etc, etc, etc?  There are many things to consider.

We always say go online and one of the great things about the internet nowadays is you can go to Google Maps and you can look at the satellite images of the surrounding area and you can see from sort of a spy satellite perspective what is going on in that area.  So these are things that you want to do.  What is the commute like?  What is the traffic like?  Where are the employment centers, etc, etc, etc?  There’s always a lot to consider.  This is part of what we do for you and part of what you want your local agent, whom we refer you to, to do for you as well or the local developer to do as well.  So ask a lot of questions.  Get your questions answered.  Make sure you feel good about the property before jumping in.

So again, thanks for the question and thank you for the nice comments.  In the interest of time because we’ve got a lot of other stuff, we’ve got a few more questions.  I’m going to postpone those and answer those on the next show because I want to get into another thing right now, which is a great program that I’ve been doing some due diligence on for about a year now, and frankly, I’ve been rather skeptical about this for a while.  And this is – what you may have heard about, you may have seen, there’s kind of a network marketing program on this, so you may have some friends talking to you about this.  And I’ve been really skeptical for a while, but I finally decided to get involved because I think it’s not really interesting from the point which they are recommending the program.  I think it’s interesting from another perspective.  Here it is.

These are the types of programs that basically help you essentially reduce your interest costs dramatically.  Now, you’ve heard me say before that I believe we are in an era of negative interest rates, where you’re literally getting paid to borrow money because mortgage interest is virtually subsidized by the government – well, now with the takeover of Fannie Mae and Freddie Mac, it really is subsidized directly by the government.  So it makes it a very good deal to borrow.  I believe we’re in an era where interest rates are lower than the true inflation rate, so it’s a very good time to be borrowing money.

But what if we could actually borrow money and in addition to getting paid to borrow by our tenant paying our carry-cost on our debt and by true time value of money issues – and go back to my show where I discuss this in depth; it’s called Getting Paid to Borrow, so that’s a recent show and we talk about this in depth.  But just here in a nutshell, you’re getting paid to borrow because you’re borrowing at a cost lower than the true rate of real inflation.

So what if we could further reduce that interest cost from maybe 7 percent down to 3 or 4 percent just by moving money around in a very sophisticated manner, the way banks do, and actually, we could get paid more to borrow?

So this is really an interesting concept.  Again, I’ve been pretty skeptical of it for a while and I have come around to see the value in it.  They’ve made a couple changes in this program and I’m just going to play some of their corporate videos.  If you are listening on the video podcast, of course you can see lots of visual images here that may be helpful.  If you’re listening on the audio, it may be enough to just hear the audio.  If you want, go to www.jasonhartman.com and see the video podcast or check it out through the iTunes Store, and it’s video podcast No. 5.  I’m going to show three videos here or audio tracks as it may be, and I’m going to comment in between them.  So let’s go ahead and listen in to the first one now.

Commentator: Imagine what you could do if you no longer had to make a mortgage payment and actually owned your home free and clear.  How about investing for your retirement, providing for your children’s college fund, or taking the vacation you’ve always dreamed of?  Through a revolutionary new mortgage management program, you can do any of those.  Homeowners throughout the country are currently paying off their homes in a fraction of the time, without the need to refinance their existing mortgages and with little or no changes to their current standards of living.

Never before have these innovative financial strategies been combined into a state-of-the-art software to provide homeowners with the ultimate tools necessary to save the maximum amount of interest imaginable and pay off their mortgages early.  Can you qualify?  Let’s see.

The program consists of three primary components:  your primary or first mortgage, an advanced home equity line of credit, and the revolutionary online software with free client service support.

Would you like to become the bank?  Would you like to stop giving away your hard-earned money to the lending institutions and start putting that money to work for you?  Why not utilize the program to significantly reduce the interest you pay on your mortgage?

Included is 24-hour secure online access, no monthly service charges, no contractual obligations, free upgrades, automatically available, and free lifetime client service support and coaching.  And the program can be transferred to other mortgages, such as second homes, land, or even investment properties.  Does this sound too good to be true?

Well, put us to the test.  Allow us the opportunity to prove it to you.  At the end of this presentation, please click on the free analysis request for a no-cost, no-obligation evaluation.  We will provide this analysis within 72 hours and show you how your mortgage can be paid off in a fraction of the time, again without refinancing and with little or no changes to your current standard of living.

Remember the American dream is not to own a mortgage.  The real dream is to own your home, free and clear.  So get rid of your pledge of debt.  The sooner you get started, the sooner you will be able to pay off your mortgage, maximize your cash flow, and build lasting wealth for you and your family.

Jason Hartman: Okay, so that gave you an idea of what this program is about.  Before we go to the next one, which is actually a television news broadcast, what I want you to know about this is don’t think of this as a way to pay off your mortgage the way it is marketed.  Again, borrowing money in an era like this of negative interest rates is actually a very good deal.  So I am not in favor of paying off your mortgage, but I am in favor of saving money on interest because when you save money on interest, you’re even getting paid more to borrow.

So whereas you might be getting paid after inflation and tax benefits 1 or 2 percent to borrow this money, you’ll actually be getting paid more if you dramatically reduce the interest cost by the way you move excess money around.  And it’s pretty sophisticated and pretty darn interesting the way this works, so let’s listen in to this TV news broadcast and then we will listen in to a much more detailed description of how this program works and at the end, we will tell you how you can go to www.jasonhartman.com, get more information, a free analysis, and actually sign up for the service if you like.

TV News Broadcast

Jim Snyder: Owning a home is the American dream and it remains an unrealized dream for most of us because we never get that mortgage actually paid off.  Until then, the bank owns your home and you pay them interest, lots of it, usually more money in interest than the original price of the home.

But the Saving You Money team has discovered a new approach to pay your mortgage off a lot sooner, save tons of money in interest, and turn that dream into a reality years earlier.

It’s the kind of coincidence we TV people love, that an accelerated version of the American dream is coming true right here at the corner of Promised Land and American Pride.

Do you think about that day when you send in the last payment?

Homeowner: Oh, I can’t wait.  I’m going to have a big smiley face at the end of the check.  I’ll sign my name with a big smiley face on the end.  It’ll be nice.

Jim Snyder: You’ll own this place.

Tom Burns: Absolutely.  I can’t wait.

Jim Snyder: Tom Burns is talking about paying off his mortgage, owning his townhome outright, and not in 30 or even 15 years.

Tom Burns: I explained to them that I’m going to have my house paid off in less than five years and they think I’m crazy.

Jim Snyder: No, he isn’t independently wealthy.  He’s a working class guy, a valet at a strip casino, and he isn’t nuts either.  He made a simple and smart change in his banking behavior, taking all the income he makes and putting it where it can work harder for him.

Tom Burns: I use the money to my advantage.  I use the bank’s systems to my advantage.  Instead of the bank making money off of me, I’m taking control and you can do it, too.  It’s that easy.

Jim Snyder: It’s a brilliant system that originated about 12 years ago in Australia and has slowly made its way here.  Tom uses software he bought from a local company to track his progress.  It cost $3,500.00.  No small price tag, but it will save him $300,000.00 in interest.  He had a healthy dose of skepticism going in, but figured the potential upside was worth the risk.

Tom Burns: Because I thought I was just going to get slammed and slammed, but there were no hidden charges, no nothing.  It was great.

Jim Snyder: We don’t want this to get too complicated, so we’ll make it real simple here.  This is your mortgage.  It’s full of red ink, the money you owe.  This is your paycheck.  It could soak up some of that debt, but normally, you leave it in a checking account and the two don’t affect each other.  Under this plan, your mortgage, in a way, becomes your checking account.  You put your paycheck into it every two weeks.  It soaks up some of that red ink, some of that debt.  That means the balance here is lower, you pay less interest, and you save money.

Tom Burns: And you don’t even feel it.  You’re just doing the exact same thing you used to do.  Instead of putting it in your checking account, put it towards the balance I owe on a line of credit.

Jim Snyder: Just about anyone can pay off their home using this method, but there are three key things you need for it to work for you.  You have to get control of your finances first.  It only works if you have more money coming in than going out every month.  You need to carefully track what you’re spending your money on and when those payments are due.  And you have to qualify for a home equity line of credit.

What would you say in a nutshell?

Tom Burns: I would say that it’s harder to explain than it is to do.

Jim Snyder: So if you’re wondering why this neighbor has a smile on his face and walks a little lighter on his feet when he picks up his mortgage statement from the mailbox, now you know.  It’s because he has about four years and seven months left until his house is paid off.

It would be nice, wouldn’t it?  I know this is definitely one of those “c’mon, it sounds too good to be true” stories, but the Saving You Money team has been test-driving this system since February, three of us doing it, and it really does work.  One message we want to get out to anyone who thinks they might want to give this a try, do your homework, and beware of predatory lenders who offer something that sounds like this or looks like this, but ends up robbing you of your equity.

Now, for more on all of this, we really invite you to tune in later tonight to a Saving You Money Special Report focused solely on mortgages.  That’s tonight, right after Night Sight at 11:15p.m.

Commentator: Are you concerned about what your financial future holds?  Do you sometimes feel like time is going by so fast that it’s almost impossible to think about paying off your mortgage or becoming totally debt-free?  Does planning for your retirement seem like a distant nightmare?

Well, there is an answer.  You can plan on it.  It’s rare that something comes along that causes a major shift in the way people live their lives.  Something totally revolutionary, truly worthwhile, so easy that people wonder how they ever lived without it.  So what is the next thing to reshape our lives?  What is the next paradigm shift?

At last, a company has emerged that has the product, the vision, the talent, and the resources to make it happen, changing the way that homeowners look at paying off their mortgages, a method so powerful the majority of their clients are on track to pay off their mortgages in a fraction of the time, while become totally debt-free in the process.  What value would you put on a program that could possibly save you tens or even hundreds of thousands of dollars in future mortgage interest without any change to your current monthly mortgage payment?

Simple and enlightening, a quantum leap in getting back to the basic foundation of owning your home, free and clear.  Did you ever think about what you could do if you didn’t have a mortgage payment?  Through an innovative program, qualified homeowners across the country are scheduled to pay off their mortgage in as little as one-third to one-half the time, without refinancing their existing mortgage and with little to no change to their day-to-day spending habits.

The system is not a bi-weekly or a debt roll-down program.  It’s an entirely new approach that sets you on a path towards complete financial freedom.  This interest-reducing program combines innovative software with banking instruments, which have been around for decades, and gives homeowners the tools necessary to achieve the greatest time and interest savings imaginable.  The system is similar to your typical checking or savings account, except that it can offset portions of interest each time you transfer money into your account.

With the system, your money doesn’t just sit around waiting for you to pay expenses.  Instead, every day that your money sits in your line of credit, it is giving you the leverage to significantly reduce the interest on your mortgage.  The system is a secure, web-based software system, which allows you to constantly monitor your mortgage interest savings 24 hours a day, seven days a week.  With this program, you will continue to have access to your money as you normally would through checks, debit cards, and bank transfers.  You’ll deposit your income and pay expenses as you always have, except now you’ll be saving time and interest on your mortgage.

Here are some of the highlights.  You have complete control of your financial transactions.  There are no contractual obligations.  There is free lifetime technical support.  You have 24-hour a day, secure, online access.  There are no monthly service charges and the software can be transferred to other mortgages, such as rentals and investment properties.

You’re probably saying to yourself this is too good to be true or how is this possible.  That’s a great question and one that has been asked by thousands of existing clients before they experienced the system firsthand.

Here are some facts and figures that will help you better understand just how much a conventional mortgage can cost you.  The mortgage you have on your home is generally your largest payment obligation.  Did you know that the average time that most people stay in their home is approximately 5 – 7 years?  And in those 5 – 7 years, almost 80 percent of the total payment on a typical 30-year mortgage goes towards interest.  This is exactly why most people will never get close to paying off their home.  By the time they start getting ahead on their mortgage, they move on to the next home and start the process all over again, paying lots of interest for years with little or no return on their money, quite often resulting in financial frustration.

Let’s take a few minutes to see how the system works and how it can potentially change your life forever.  First, let’s look at a traditional $200,000.00 mortgage with a 6 percent interest rate.  Did you know that in the first year alone you would pay almost $12,000.00 in mortgage interest, while gaining only $2,457.00 in principle?  After five years on the same loan, you would pay in over $71,000.00 with only $13,891.00 being applied to the principle amount of the loan.

In just five years, you would pay more than $58,000.00 in interest.  At the end of 21 years, you would have paid in more than $300,000.00, but would still owe the bank almost $100,000.00.  Amazingly, at the end of this 30-year mortgage, you would have paid $431,677.00.  The original mortgage was only $200,000.00, but you would have paid $231,677.00 in interest.

Remember we said earlier that the majority of us will only stay in our homes for 5 – 7 years.  Most of us will always be paying much more interest than principle.  Even though our interest rate was only 6 percent, because of the way that mortgage interest is calculated, you would have paid more than 115 percent of the value of the home in interest.  This should be enough to make you upset, but it doesn’t have to be this way.

Now, we’d like to show you how the system can accelerate this mortgage payoff in just a fraction of the time.  The majority of homeowners in the United States tend to use separate accounts that are scattered everywhere, a checking account in one place, a savings account at the same bank or another bank, and if you are like most people, you may have several credit cards with several different companies.

We also have car payments, student loans, and some of us even have a second mortgage.  It’s amazing that we can even keep track of where all of our accounts are located.  With the system, you can potentially put all of your income, savings, and debt into one single account.  Here’s the solution:

The first thing you want to do is establish a line of credit, such as a home equity or personal line of credit, at the lending institution of your choice.  Once the line of credit is in place, it can now function virtually like your regular checking account.  You will now transfer all of your income and pay all of your expenses using your line of credit.  Your line of credit can now function as an interest cancellation account.

The system is driven by algorithms or what we like to call “Smart Software,” always recalculating the variables with each new transaction recorded.  The software always knows how much money is being transferred into your line of credit and how much is going out for expenses.  The software works as a financial dashboard, enabling you to effectively manage the entire process.  You will always know right down to the month and year when you will be completely mortgage free.  You are always in control of your financial situation.  It does not move money.  It does not pay bills.  It is very user friendly and it tracks your monthly budget.

Here’s a 12-month overview of how the Money Merge Account system functions.  For illustration purposes, we’re going to use the same $200,000.00 mortgage.  As an example, we are going to show you a couple who we will refer to as John and Rebecca Jones.

They have $5,000.00 in monthly income and $4,000.00 in monthly household expenses, including their mortgage payment and $1,000.00 in discretionary income.  Discretionary income is the money that is left over each month after all of your monthly bills are paid, including entertainment, food, car payments, and any other miscellaneous expenses that you may have.

You’re probably saying to yourself I don’t have $1,000.00 in discretionary income.  That’s okay.  The program can work with $50.00 discretionary income or with $5,000.00 discretionary income.  This is just a general example.

In the first month, John and Rebecca are going to borrow $4,000.00 from the home equity line of credit that they were able to secure to pay their monthly expenses, which includes their regular monthly mortgage payment.  Based on this sample financial situation, the system is going to prompt them to make a funds transfer of $11,983.86 from their home equity line of credit and send it to their primary mortgage company as an additional principle payment, leaving a balance owed of $15,983.86.

Remember, since their equity line of credit will now function as their primary checking account did, our model couple will deposit their $5,000.00 monthly income, which will reduce the balance to $10,983.86.  Since they will only pay interest on the average daily balance utilizing their equity line of credit, their total interest charge in the first month will be $75.05, using an interest rate of 8.6 percent.

Let’s review what just happened in the first month.  By making a funds transfer to their primary mortgage, they increased the monthly principle payment on their first mortgage by $60.91, reduced the effective term of their mortgage by 53 months, and cancelled $51,269.28 in future mortgage interest.

In Month 2, John and Rebecca begin the month with a balance of $11,058.91.  Again, they will borrow $4,000.00 from the equity line of credit to pay their monthly expenses, which again includes their regular monthly mortgage payment.  This brings the balance owed on the equity line of credit to $15,058.91.  Since John and Rebecca want to keep the average daily balance on their equity line as low as possible, they again deposit their $5,000.00 income, thus lowering their balance to $10,058.91.  The total interest paid in the second month on the equity line of credit is $73.71.

As you can see, in the third month on the Money Merge Account Program, John and Rebecca carried over a balance on their equity line of $10,132.62.  Again, they paid their monthly expenses of $4,000.00 and deposited their income of $5,000.00, leaving an ending balance of $9,132.62.  The interest that John and Rebecca paid on the line of credit in the third month was $66.94.

This cycle of paying monthly expenses and depositing monthly income into the equity line of credit will continue until the system determines that it is the optimal time for John and Rebecca to make another funds transfer of $2,784.30, which occurs again in Month 4.  The system monitors your monthly income and expense records and determines the exact transfer amounts and timing for optimal interest savings.

Let’s take a look at what our model couple achieves after just five months.  Remember, when John and Rebecca began the program, only $199.10 was going towards the principle on their first mortgage.  After only five months, $277.86 is now going to principle.  This represents an additional $78.76, which is going to be applied to the next principle mortgage payment.  This doesn’t sound like a huge jump in principle, but after only five months on the program, John and Rebecca are schedule to pay off their 30-year mortgage in only 292 months.  They have reduced the effective future pay-off term of their mortgage by 5.6 years.

The total interest cost for using the equity line of credit for the first five months was only $364.03, while canceling $60,626.00 in future mortgage interest.  Assuming that John and Rebecca will continue this cycle of paying expenses and depositing income using their equity line of credit, the money merge account system will prompt John and Rebecca to make another funds transfer of $2,786.88 in Month 7.  Keep in mind, as you follow the system, you are the one in complete control.  The software program will only prompt you to make a funds transfer when your line of credit is at an optimal balance.

In the months that the software does not prompt you to make a funds transfer, your discretionary income is reducing the debt on the line of credit.  It is very important to understand that the key is keeping the maximum amount of money in your line of credit for the maximum amount of time, while spending the least amount possible each and every month.

After analyzing John and Rebecca’s financial situation, the software directs them to make one more funds transfer of $2,781.86 in Month 10.  There is no guesswork involved.  When the system calls for a funds transfer, you can rest assured that you are transferring the precise amount of money to your first mortgage.  Viewing your financial dashboard from month to month will give you continued confidence in achieving your goal of becoming mortgage free.

Looking at the results of this 12-month example, we begin to realize how powerful this program really is.  John and Rebecca have accomplished several things.  The total interest charges that were paid towards the equity line of credit were only $865.10.  They have cancelled a total of $77,524.00 in future mortgage interest and have reduced the effective term of their mortgage by 93 months.  That’s 7.7 years.  There are only 267 monthly mortgage payments remaining and the principle jump on their first mortgage payment went from $199.10 to $315.92.  That’s an increase of $116.82.

In just one year using the Money Merge Account system, John and Rebecca Jones would have reduced their mortgage from $200,000.00 to $176,320.00 and would be on track to pay off their 30-year mortgage in 10.1 years, paying only $71,005.00 in total mortgage interest, thus saving $160,672.00 in future mortgage interest.

In comparison, using a conventional amortization schedule, John and Rebecca would still owe $197,543.00 after this same 12 months.  It would have taken more than seven years to reduce the principle amount on their first mortgage to $176,320.00 and they would have paid $231,677.00 in total mortgage interest over 30 years.

Homeowners across the county are realizing similar results, becoming mortgage free.  As you can clearly see, you do have a choice.  Change of patterns in a different direction will take your life in a different direction.  There is no secret.  Money works 24 hours a day, seven days a week, 365 days a year.  The question is do you have your money working for you or do you have your money working for someone else?  We encourage you to put us to the test.  Let us provide you with a free analysis so that you can see exactly how fast your home’s equity could accelerate and if the system is right for you.

Keep in mind that you are never alone.  An advanced support center and personal coaching service offering professional instruction and guidance are available to every client, committed to improving the lives of their customers by providing a product and service that earns your trust through an ongoing coaching and budgeting education program.  A mortgage-free future is closer than you imagined.  Stop wasting your hard-earned money and start putting it to work for you.  Become part of a mortgage-free America.  Please get back to the independent agent who introduced you to this program for further information and remember you have nothing to lose, but years off your mortgage.

Jason Hartman: So that is a really interesting and very sophisticated program.  If you’re interested in learning more, as well as getting a free analysis of this program, you can talk to one of our investment counselors.  Just email them, contact them through www.jasonhartman.com and, learning more, let me give you the detailed link where you can learn a lot more and sign up.  You just go to www.jasonhartman.com and then you click on resources, and then you click on the U 1st Financial link.  So the actual direct link is www.jasonhartman.com/resources/u1stfinancial and you can get a free analysis.  You can look at a seminar schedule and learn a lot more about it.

Again, this is a program that I was not very convinced about for a while, but they made some changes to it and I started really analyzing it a little more and I looked at a way that you can really use this, not to pay off your mortgage because again, that’s not really the goal.  We just want to get to that refi till you die point, and by the way, if you want to know what I mean there, go and listen to the podcast on Refi Till You Die, and one convenient thing to do is go to www.jasonhartman.com.  We’ve got a search bar there where you can just type in Refi Till You Die and that’s kind of what we call our way to extract wealth from your rental properties, and you can find all the podcasts and discussions about that subject anywhere on our website.  So that’s a really, really handy feature.

By the way, if you like to read over listen, you can also get transcripts where you can read them at your convenience of any of our podcast shows on our website at www.jasonhartman.com, under the Education tab.

Anyway, thanks for listening.  We’ll be back next show with a lot of interesting stuff.  We’ve got so many interesting things coming up, so many interesting guests.  We’re going to talk more about these ridiculous government bailouts, what it means to us, which is a lot of inflation coming our way, and that’s actually good news for us.  It really is good news.  It’s bad news for most people, but those who are in the know, who are in the smart money, who are investing the right way, are getting their money out of the crooks on Wall Street and controlling it themselves, are really going to profit in the coming years.

In many ways, we have some very scary financial times coming, but if you act correctly, you’re going to profit from it.  So until next time, this is Jason Hartman wishing you happy investing and thanks for listening.

Dave Toombs: Hey, so we’ve been Platinum members for a couple of years now and we’re just real pleased with the way things are working out.

Kathy Toombs: We couldn’t be happier and it’s really changed our lives for the better.

Announcer 2: On October 25 and 26, join us at the Master’s Weekend, A Gathering of Experts.  This special event only happens twice a year.  With our panel of 16 experts, we’re putting enough real estate brainpower in one room to make Donald Trump flinch.  The Master’s Weekend is a powerhouse education that can revolutionize how you think about money and wealth.  Our speakers come armed with the latest and shrewd real estate investing techniques and will address such issues as the smart way to choose your properties, how to grab every tax benefit the law allows, how to put together the most creative financing package possible, the hidden power of the 1031 Exchange, and how to easily invest in dynamic growth markets outside of California.

Order your ticket before October 1 and you’ll receive our early bird discount.  Space is limited.  Reserve your seat now.  Head to www.jasonhartman.com and click on Events.  That’s www.jasonhartman.com.  The Master’s Weekend beginning October 25.

Jason Hartman: Attention agents, brokers, and mortgage people.  Do you know that we cooperate?  Do you know that our network is an open system, that you can refer clients and outsource your investor clients to us and receive passive income?  It’s a really great opportunity.  All you have to do is register your clients at www.jasonhartman.com and tell them to attend one of our live events, our live educational seminars.

Listen to our podcast, go to the website, and request our free CD at www.jasonhartman.com.  And if they invest with us per the terms listed on the website, you will get a referral fee.  We have lots of agents, brokers, and mortgage people that receive surprise referral fees that they weren’t even expecting.  They get a check in the mail and they are just happily, happily surprised.  It’s a nice extra supplement to your income.  So be sure to take advantage of our broker cooperation.  Agents are welcome.  We cooperate with outside people and we’d love to help you with your investor clients.

Hey, I just wanted to announce a couple of quick things for you.  If you are able to come to one of our live events, we would love to see you and meet you in person.  We’ve had people fly in from all over the U.S. for them.  So hopefully you can join us for some of those events.

I wanted to mention to you that we have a new offering, a free CD, a free audio CD, that you will really, really like.  We’ve had so many people that have given us really good comments about them, and you can go to our website at www.jasonhartman.com and just fill out a little quick web form and you can either download it or you can have the physical CD mailed to you in the postal mail.  But get the free CD, especially if you are a new listener.  You need this.  And if you are a regular listener and you’ve listened to all the other old shows, you don’t need the CD so much, but it will be a nice review for you either way.  But if you’re a new listener, you definitely want to go to www.jasonhartman.com and request the free CD.

Remember that Platinum Properties Investor Network has moved.  We are in our beautiful new office in Costa Mesa, California, 555 Anton, Suite 150, in Costa Mesa, California, 92626, and we’re right by world-famous South Coast Plazas.  So come in for a visit and a little shopping.

Also, we just uploaded another video podcast and I’d highly recommend that you subscribe to that.  There’s some stuff that just lends itself better to video than audio.  If you want to see what’s on that, subscribe to it, you can go to www.jasonhartman.com.  If you use iTunes or an iPod and you’re an Apple person, then you can go to the iTunes Store, type in Jason Hartman, and two podcasts will come up, the video podcast and the audio podcast.  And you’re probably already, if you’re listening, a subscriber to the audio podcast, so make sure you get yourself a free subscription to the video podcast as well.

And this particular one that we just loaded in the video podcast is about Naked Short Sales and what goes on with this short sale and manipulation of the stock market.  It’s a very interesting report from Bloomberg News and I think you’ll really learn a lot from that.  So be sure to tune in and watch that.

Be sure to see appropriate disclaimers and disclosures on our website at www.jasonhartman.com.  Remember that we are not tax or legal advisors.

Anyway, we’ll talk to you next week.  Thanks for listening.

This material is the copyrighted creative work of either Jason Hartman, the Hartman Media Company, Platinum Properties Investor Network, Incorporated or the J. Hartman Company, all rights reserved.

[End of Audio]

Duration:  49 minutes