What do you need to know to turn the goose into a golden egg laying monster.
1) Can you meet your mortgage repayments now?
2) Could you put over and above your normal payment
Learning to understand the goose.
What knowledge do you need? Firstly understand there are TWO equities in a property
1) The first one is your property equity.
2) The second is your mortgage equity.
Property equity is the difference between the value of your home and the 30 yr minimum payment line of your mortgage. ( Get a mortgage broker to demonstrate that on software and calculators.)
The mortgage equity is the golden egg waiting to be hatched. This is the amount that you can freely withdraw at any time; It is the surplsu balance that in effect is your savings. It represents the additional payments over your minimum payments plus compounded interest.
There are the basic rules to the program
1) Never use your property equity to invest in additional investments
2) Only your mortgage equity is to be used.
Learn the seven elements necessary to build wealth with mortgage equity
Rule No 1:
Putting a specific amount of money over and above the minimal monthly mortgage repayment into your mortgage every month.Feeding the goose
Rule No 2:
This is to be done with consistency over time. If you don't feed the goose it wont produce optimum eggs.
Rule No3:
Your total focus is on the redraw mortgage equity figure in your mortgage not the mortgage balance. (the golden eggs)
Rule No 4:
Your deposits into the mortgage must be without fees. (Get a mortgage broker to expain,don't go to a bank). Imagine the bank taking the feed for the goose and not allowing it to grow and lay golden eggs.
Rule No 5:
Your mortgage is constructed to allow you to withdraw the surplus of Mortgage equity created by the extra payment without fees. Imagine the bank taking a chunk of your egg.
Rule No 6:
The money redrawn from your mortgage equity is used in investing in conservative positively geared income generating investments. (get a financial planner)
Rule No 7:
You apply the returns on your investment back to the mortgage to increase the speed you create mortgage equity.Let the goose eat its own eggs as it gets bigger and lays larger golden eggs.
How can you fail in the plan? Easy. Do not put the extra money into the mortgage.
Now here is the most common form of failure.We will see what we have left over at the end of the month and put that into the mortgage. It does not work. No one ever has money left over at the end of the month except if they plan to! You will never get started.
In summary
1) There is no slight of hand in building wealth.
2) You create your own goose with the golden eggs.
3) How many eggs do you want the goose to lay?
4) You do the 7 steps over and over and over and over until you have all the wealth you want and need.
The first step is to see your mortgage as a wealth creation tool. The goose that lays the golden eggs.
John E Edwards explains how a mortgage is a wealth creation tool, and how to use the mortgage effectively to start creating wealth in your life now. Contact a specialist to get you on the right path now. Mortgage Solutions or Mortgage Answers
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