I recently received an email from a visitor to my Money Management Solutions website who wants to learn how to pay off her mortgage quickly without having to attend expensive seminars or buy expensive software to do this trick.

I realized that this was a question a lot of people might have, especially during this current economic crisis. I decided to share my answer here for that reason.

Brenda asked Sandra Simmons:

Is there some sort of “mortgage accelerator” program where your mortgage gets paid off in a fraction of the usual 30 years time? I want to learn how I can do this myself for my mortgages. — Brenda B.

Answer:

Brenda: You can do this yourself by making extra principal payments each month.

Example if your mortgage payment is $2,000:

 If, when you make the payment for 8/1, you include an extra payment for the principal due 9/1 of $302 then you don’t ever have to pay the interest of $1,698 that was due 9/1.

Your next payment due, which you will pay on 9/1, is actually the 10/1 payment.

Then on 9/1, when you make the 10/1 payment, if you also pay the principal payment from the 11/1 payment, then you save that interest. If you do this you will cut your mortgage payoff time in half.

Write on your payment coupon “Extra Principal Payment $302” so there is no question of where you are directing the funds, and keep a copy of the coupon and the check for your records.

If you want to accelerate it even faster, say cut it by 2/3rds, if on 8/1 you make the payment and include the principal amounts for the payments due 9/1 and 10/1, then you don’t pay the interest on the 9/1/and 10/1 payments.

Then on 9/1 when you make the next payment you would pay the payment for 11/1.

Ask your mortgage lender for an amortization statement of your loan so you can actually see the correct principal and interest amounts broken down for each payment. They may not want to give you one so you can’t do this as they lose interest income, but you have a right to have it. Even if you have to pay them for it, it is worth it. Typically they charge $25 – $75 for an amortization statement.

Sandra Simmons is the President of Money Management Solutions, Inc. She specializes in helping business owners and individuals manage their money to achieve financial freedom. Claim your FREE Debt Reduction Solutions Guide.

Less than a week has passed since the $700+ Billion bailout plan was passed to handle the financial crisis. The money is gone. It’s all been dished out. Yet the Wall Street stock market crash continues, the economic crisis continues full steam ahead, and the greedy want even more.

Just today, Nancy Pelosi asked for another $150 Billion for the bailout to handle the credit crisis. No doubt her new plan is filled with pork belly earmarks. The government and all the greedy and corrupt officals on Capital Hill are admitting that the $700 Billion is just a start. They say it’s going to take at least 3 times that. I, for one, am not willing for my pocket to be picked any longer by people who have been elected to serve me, who are treating me like their economic slave. All those who voted for the bailout plan need to resign from office today. More appropriately they should be convicted of TREASON – betrayal after trust-Democrats and Republicans alike.

Indictments for treason should also extend to the recipients of the money for their criminal activities. Just weeks after receiving their $85 Billion dollar rescue package, AIG senior management reportedly spent over $400,000 on a week-long vacation retreat for themselves at a ritzy resort in California at our, the taxpayers’, expense. Their spa bill alone for manicures, pedicures, facials and massages ran up a tab of over $23,000. That is CRIMINAL! And that is just the first of the stories like these. A lot of heads need to be put on pikes. They have stolen America’s financial freedom.

I still want Ron Paul for President. He has the sanest money management plan of all. I still want the FairTax Bill voted in and the IRS voted out. It’s going to take an all-out grass roots effort by the American citizens to get the FairTax Bill passed. I believe, as does Ron Paul and the 70 or more other members of the current Congress who support the FairTax Bill, that it can be done.

I just visited the FairTax website at http://www.fairtax.org and read this message on the current economic crisis and the out-ethics activities of our government officials from their Communications Director Ken Hoagland. I couldn’t have said it better myself.

Hometown America Must Save The Nation

At the heart of the financial meltdown now bedeviling Americans is a simple and profoundly ignored fact that does not require an advanced degree in economics to understand: Our government spends more than it takes in—a lot more.

Sure, regulators could have done a better job but, in truth, politicians at every level have frustrated attempts to blow the whistle on bad loans, bad reporting and bad ethics. Why? Because politicians have been buying our votes with our money—and our future earnings—for a long time. And they don’t want any interference from those they are “helping.”

It’s not just the naked bribes represented by “earmarks” for hometown voters; it is new entitlement programs like the prescription drug benefit, new rules governing the behavior of favored banks and investment houses and a headlong rush to buy the votes of the poor by guaranteeing home ownership, irrespective of one’s financial ability to repay a loan. Lest we forget, let’s also add up all the special tax breaks for favored contributors that have bloated income tax code rules to 67,500 pages. It’s a bi-partisan betrayal of our future cloaked as concern for the common good.

Although our nation was founded on the principle that the citizen was sovereign, government spending increases and more and more taxes taken from our earnings, savings and investments have effectively transformed the American citizen into a serf working another’s land for the privilege of taking a fraction of the fruits of his or her own labor.

Just Trust Us

“Trust us,” we are told. “We have the best interests of the nation at heart.” Citizens are now left with no rational choice to protect savings, college plans, and investments but to accept the new aristocracies’ trillion dollar picking of our pockets to prop up institutions that must function. It is not the first time in recent years that we have accepted the grasping hand of the federal government in our wallets to avert a disaster not of our making.

In 1983 a “Blue Ribbon” panel of similar leaders including Alan Greenspan, Daniel Patrick Moynihan and others “saved” Social Security from another big collapse by dramatically raising taxes on earnings of up to $97,500 annually. The promise, then, was that Baby Boomers would actually “pre-fund” their own retirement with astoundingly increased taxes, decades ahead of time. It was also promised as relief to the coming generations so they would be free of crippling taxes. Sounded good.

Lo and behold, the trillions of dollars taken in since then—far exceeding promised payments to senior citizens—have since been spent on everything else. Turns out, that it was nothing more than a new tax levied on those with earnings below $97,500 a year so executive and legislative branch office holders could have more of our money to spend extravagantly on “us” so they could win new terms in office. The FICA payroll tax has become a major factor in keeping the poor that way, retarding new business growth and keeping middle-class earners from moving up. Worst, it also turns out that our children and grandchildren will, in fact, still be burdened by an ever-growing and mind-numbing national debt AND unbelievably high FICA taxes to support their parents.

In yet another example of playing fast and loose with politics and our money, 1986 saw Congress reject the tax policies of the Reagan administration and as consequence, the Savings and Loan industry collapsed. Turns out the definition of the tax value of real estate holdings had been changed overnight by the House Ways and Means Committee and banks no longer met liquidity rules. That politically inspired cat fight cost American taxpayers hundreds of billions of dollars. And worse, we didn’t learn.

It is past time–way past time–for hometown America to save America from our well-intentioned but criminally incompetent, at best, and cynically corrupted, at worst, national leadership. Do we have a moment to lose? Do we really need any more examples of how the new aristocracy can—and will—destroy the pursuit of happiness?

The reform that can save the nation and restore our identity as citizens who have empowered and limited government (instead of the other way around) is called the FairTax.

Because the FairTax allows every American to take home everything that is earned without any federal withholding, millions of distressed homeowners could actually afford home mortgage payments. The elimination of FICA taxes eliminates the highly regressive Social Security and Medicate tax but the FairTax provides a far broader stream of revenue into these faltering programs. Because the FairTax eliminates all exemptions, gimmicks and loopholes, Congress would be removed from the ability to buy votes with tax giveaways and billionaires pay taxes when they spend money. Because the FairTax makes nearly all federal government taxes entirely transparent, the sovereign citizen can know the score and put the brakes on extravagant new spending.

Because the FairTax eliminates the price advantage now enjoyed by overseas producers, American jobs won’t be leaving our shores. In fact, because the FairTax makes the USA the most favorable tax environment in the world, we can expect trillions of dollars of investment rushing into the US economy. With the FairTax, our money is ours first and only secondly devoted to government. Savings growth, investments and business decisions are guided by opportunity and real progress instead of tax avoidance tactics.

We’ve lost more than $2 trillion of our retirement savings in a week’s time and our kid’s future at college is in serious jeopardy. This didn’t happen by accident but at the hands of the very same people who have given the FairTax a cold shoulder. Those candidates and incumbents of either party who would spend our future earnings to stay in office and who reject the FairTax for similarly self-interested reasons now need a strong reminder from voters about whose offices they occupy. Please pay attention to our voting guide and send that message. [See the voting guide at www.fairtax.org]

Finally, our campaign needs your help—as always. We never have enough to do the job right. Send us a contribution if you can, even in these hard times. It may turn out to be the best investment you ever made. If you can’t afford a donation, then help us by recruiting two new supporters. And keep your cards, letters, phone calls, faxes and e-mails going to incumbents and candidates.

The plain fact is, we either now save ourselves from our new aristocracy or suffer the consequences as modern day serfs in a nation never contemplated by our Founding Fathers.

These are the 32 Words in the Bailout Bill intended To End Our Economic Freedom and Destroy the US Constitution as noted by a friend on my email network.

“Decisions by the (Treasury) Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” – Section 8 of the Paulson Proposal

Bluntly, this clause was put in the Bailout Bill to personally protect the authors of that bill. Why? Because they know it is a bad bill designed to harm the public while protecting the out-ethics companies and company executives whose money management mistakes got them into trouble.

Did you listen to President Bush’s 12 minute address to the nation on the evening of September 24th? In one breath he stated the economic crisis was caused by too much lending of credit. Then 3 times he stated that the solution to the problem is the Bailout Bill which would make it possible for more credit to be given to businesses and families.

So how can what created the problem also be the solution? It CANNOT.

Did you listen to Bush and watch the politicians and so called “experts” being interviewed about the Bailout Bill? Did you notice that rach one of them used the word “hopefully” more than once? – Hopefully this will help, hopefully the housing market will start to recover, hopefully the government can sell the distessed properties that they are buying that ‘We The People’ have to pay for now. The authors of this bill and our political representatives on Capitol Hill doubt this bill will be the real solution. That’s why the authors of the bill added the clause that protects them personally if it doesn’t work – they are merely “hopeful” and are nowhere near certain.

The Great Depression finally materialized when the amount of credit loaned reached a critical mass and far outweighed the public’s ability to pay. That exact same situation has happened and the public cannot pay the credit debt they have incurred. To extend more credit is to send us faster down the slippery slope toward a long and deep recession.

I am against the Bailout Bill. I am for letting the executives who make millions in salaries every year take the hit for their out-ethics money management that created their companys’ and Wall Street’s problems of greed and financial mismanagement. I refuse to bail them out when I have worked so hard to keep my business and household financially sound and out of debt. I don’t want to be punished as the producer while their non-production is rewarded.

President Bush, Mr. McCain, Mr. Obama and all members of Congress, GET OUT OF OUR WALLETS and pay for this out of YOUR multi-million dollar annual salaries instead, since you are so HOPEFUL that this Bailout Bill is the correct solution. Take the billions in salaries made by the executives of Fannie Mae, Freddie Mac, AIG,  and Wall Street brokerages. You were elected to serve ‘We The People’. We don’t work for you!

The greatest economic threat since the Great Depression has exposed a serious weakness in our collective fiscal management policies. Money management expert Sandra Simmons explains how to avoid the next big economic crisis.

Wow, what a roller coaster ride. Not since the Great Depression has the U.S., nor the world wide economy, come so close to falling off of the financial precipice. And while we are not out of the woods yet financially (not by a long shot), the current economic crisis does serve to illustrate a very harsh fact of life: The lack of an ethical, disciplined money management philosophy will eventually come back to haunt you.

 While our economic leaders are scrambling to put out the fires and rescue our economy, the big question on the minds of many is how did this happen and who is responsible?

 “The answer to the question of who is responsible for this economic crisis is both “everyone” and “no-one” from a philosophical perspective,” says well known money management expert Sandra Simmons. “What I mean by that is all of us are responsible for the global economy to a greater or lesser degree, but it is hard to really “blame” anyone because there is no consistent financial money management philosophy that everyone knows and can agree upon.”

 What Simmons is referring to is not necessarily capitalism versus communism, liberal versus conservative, or Republican versus Democrat, for there is a common element that virtually every econo-political philosophy has in common: money.

 “We can-and probably will-debate and argue the pros and cons of the various political philosophies forever,” says Simmons, “but at the end of the day, there is one thing that all governments, corporations, businesses and individuals must manage correctly and that is their money and cash flow. The correct money management philosophy, in fact, undercuts all of the various political points of view and deals in the most basic of financial principles.”

 In other words, the fundamentals of money management are actually the same regardless of your political views, and when those fundamentals are violated, there can be a heavy price to pay.

 “The essential centerpiece of any successful money management system is ethics and discipline,” states Simmons. “If you are not disciplined when it comes to the handling of money and cash flow, it doesn’t matter if you are an individual, small business, Wall Street, or the government. A lack of financial discipline is eventually going to come back to bite you and lead to financial crisis regardless of the scale.”

 Discipline enters into the money management equation because money management, correctly done, is going to lead to a very high level of financial stability. When an entity is financially stable, it can withstand the economic threats that will inevitably arise, and create a rock-solid economic foundation from which to operate.

“When we talk about money management discipline, we are talking about paying your bills and getting out of debt properly, eliminating the over-reliance on credit, building reserves, and always planning and predicting where money and income are going to come from, among other factors,” explains Simmons. “The easiest thing in the world is to fall into the credit trap. It is very seductive. But you can see what happens, and I think our current economic crisis is an excellent lesson of what can happen when governments and the biggest financial institutions in the world fall victim to the allure of living beyond their means.”

 “When we talk about economic or financial “ethics”, we are not necessarily talking about violations of the law,” continues Simmons, referring to the fact that the collapse of Wall Street will not necessarily involve the indictment and prosecution of any corporate executives. “Ethics has a lot more to do with judgment and decision making. A successful money management system is going to automatically encourage this because the objective is security and stability. Obviously ethics was sorely lacking considering our current economic crisis.”

Although we are currently in the middle of crafting an economic bailout that is going to involve astronomical financial numbers, according to Simmons, there is a basic money management principle that is always at play: It’s not how much you make; it’s what you do with it that determines your financial condition.

 Whether you’re a government, corporation, small business, an individual, or Wall Street, the following are the money management principles that Simmons recommends:

 Money Management Principle #1: SPEND LESS THAN YOU MAKE

Cut your expenses back to operate within your income. This may seem difficult, but building a budget that includes everything you need to run your business is essential. If you know exactly how much you are spending to run the business, and where the money is going, you can identify areas of waste or even areas where more needs to be spent to get the income up and increase profitability. Most UNDER-ESTIMATE what they need financially by 10 – 13%–a critical mistake when you are aiming for an income target that is too low.

 Money Management Principle #2: PUT 10% OF YOUR INCOME AWAY IN SAVINGS OR RESERVES

Set aside regular amounts of cash from your income for the future – put the money in savings toward gaining financial freedom and don’t ever spend it. Put a minimum of 10% of income into savings out of every dime earned. Note, even government is recognizing the importance of building reserves as California Governor Arnold Schwarzenegger wants to see this become a part of that state’s budgetary process.

Money Management Principle #3: DO NOT BUY ON CREDIT

Pay cash instead. Debt is a disease that you should avoid contracting. If you already have some credit debt, a successful money management philosophy will show you how to get it paid off fast.

 This, of course, lies at the very heart of our current economic crisis. Too many people in the U.S., getting into too much debt, played an enormous factor in creating an economic collapse. It can be said with a high degree of confidence that had everyone from end users to financial institutions followed this money management principle, we would not be in financial straits as a nation.

 If you need to buy something that is expensive, put money away towards the purchase every week until you have the cash. If you absolutely must use credit for a home, office, or equipment, only use credit when you are 100% positive that it can easily be paid for without undermining your financial security.

Money Management Principle #4: FIND WAYS TO MAKE MORE MONEY

The cost of doing business goes up about 8.5% every year, so you need to make more money just to keep up. Look over your line of products and services and figure out how to sell more of the profitable items. Be willing to discontinue items that are not bringing in enough profit for the time, effort and cost to sell them. Find out what new products and services you can offer your clients to increase your gross income. Look at every financial decision you make with an eye on the return on investment you will get for the money you spend. Don’t spend your hard-earned income on “fruitless” expenditures.

 Money Management Principle #5: USE YOUR MONEY TO INCREASE YOUR INCOME

After paying the 10% into savings and paying your bills, use any money left over in ways that increase your ability to produce more income.

 Why is controlling the flow of money so important? It is the energy and life blood of a business. It is necessary to pump it through the income producing areas first to keep it running well. Everything runs smoother when cash is available.

 “I hate to say “I told you so” but I saw the current financial debacle coming several years ago,” says Simmons. “When the fundamental principles of sound money management are violated, it becomes a ticking time bomb. Without the right kind of fiscal discipline, economic pressure is going to expose money management weaknesses.”

 If we survive the current economic crash, perhaps the biggest tragedy will be the next time this happens if all of us don’t get our financial houses in order.

Sandra Simmons, President of Money Management Solutions has years of experience helping business owners and individuals manage their money to achieve financial freedom. Claim your FREE Debt Reduction Solutions Guide.