How To Pay Off A Mortgage Early

1. Section 1 - Introduction: Hey, guys, welcome and thank you for taking this course. My name's Alex, and I really do believe that everyone can become mortgage free now. Once you've become mortgage free, your life is a lot richer, about happier, a lot more secure and flexible. It's just all round better for yourself and your family if you have them, and in this course you will become mortgage free with a proven strategy that I'll be collaborating on later on. And with this strategy, you can go from having no idea to becoming mortgage free in under 10 years there to tell you a little bit about myself. I've Dean writing and teaching. People had a path that mortgage early for over five years now, my materials being read by hundreds of thousands of people all over the world. In fact, over 175 countries have read my material. I also know there's a lot of financial experts out there, some of them quite good. Some of them, most of them, are quite horrible. And I'm sure you would have seen their very small, throwaway, pointless articles that they posted hundreds, you know, on the Internet constantly. They promise you the world, but they don't really deliver anything. Perso. So to begin with, I thought I'd be perfectly clear and upfront honest about what discourse is and what this course isn't. So, to start with, I just wanted to tell you what this course is not so this course is not a list off top tricks or hacks that don't actually make any difference to your mortgage. I'm sure you've seen all the top 10 lists and the life hacks that you can do to pay off your mortgage in five months or whatever ridiculous term there, you know, promising instead in this course that we had access to a proven strategy that actually works. So this course isn't something just to make you feel good, but has your not actually doing any actual work this course? You will do some work in it, but I think you'll feel fantastic because eventually you'll look back on that small amount of work that you've done. And just I feel fantastic because you'll see how much improvement you've made just by doing that small amount of work. This course is also in our home, I promise, with no actual substance, you know this strategy, as I said, has already worked and helped hundreds of people path their mortgage early, including us. We paid off hours in 6.5 years, so I don't just talk the talk. We have actually already walked out. I think if I had this material when I first started all those years ago, we probably could have done in about five. But we took 6.5, not a huge difference. But you know would have been us eso. Now that you know what this course isn't you can see what it actually is. So by working through all the material in this course, what you'll get at the end of it is a completely different way off managing your mortgage and your future finances in life, you'll get serious, tangible results so you will actually see your mortgage length just plummet and go down horrendously. I'll also be giving you step by step instructions for the material and the information that I'll be giving us. I'm not just generally teaching you something. I'll actually be giving you step by step instructions on live examples on that material that I'm trying to convey and finally, the most important thing. You'll get a huge ongoing advantage over the vast majority of other people. So obviously, paying off your mortgage is in itself a huge advantage. But beyond that strategy that I'll be laying at in this course will also help because it could be applied to not just your mortgage but your future finances as well. So you get your mortgage being paid off, which is a huge advantage, and this strategy, which is a huge future advantage. So together you get double huge, so I hope your pumped to get started and ready to learn to do exactly what we did, so let's get started. 2. Section 2 - 1 - In The Beginning: Hey doing and welcome to this first chapter, which is why are you doing this? So to start with, we're not actually going to jump straight into the whole spreadsheets and interest rates and all that technical stuff direction and focus on something a little more important, Which is your reason for doing this whole mortgage repayment thing? So, you see, when you take on a multi thing, like paying off a mortgage, we're gonna be reducing it a lot. It's gonna come down from 30 years to 10 years, but that's still think about. It's still 10 years worth of your life. What can happen in 10 years or can change, And you're gonna need a really good reason, toe, why you're doing this on a raisin That's gonna keep you doing this for 10 years. So it's essential that you have a driving motivation, some reason that you can remind yourself off while all these years go on. So the most obvious reason that most people have is a you know, paying off a mortgage in 10 years years saves hundreds of thousands of doors, so just a za quick example. This is a $400,000 mortgage or of our 10 years, 10 years versus 30 years at 7% interest. Now I know that interest rate might sound a little high to some people, depending on where you are in the world. But this is just a quick example, so just ignore it. But you're talking about roughly $400,000 indifference in terms off interest that you would pay over 30 years versus interest that you would pay over 10 years. So that's the same process, the actual mortgage itself. We're talking about a lot of money here, and that's a pretty damn good reason most people think in terms of why you would want to pay off your mortgage early. But unfortunately, you never really sort of see this money. This money you do eventually see. But it happens later on. So you have this 10 year period that you're paying off this mortgage superfast over. You never actually see these savings. Those savings come later on in those 20 or 30 10 to 20 and 10 to 30 period that you would have. I actually had to pay all that interest if you had taken 30 years to pay off your mortgage . So over the original period that you're actually paying off that mortgage very quickly, you never actually see it. It's not a particularly good motivating reason. And if you try and just focus on this fact, you're probably just gonna file, and that's not what I want. I want this course to actually be successful for you. I want you to pay off your mortgage and under 10 years, and I want you to stay that course for however Moamer takes hopefully takes us in 10 years . So you need to figure out what is your reason for paying off this mortgage fast. So is it just because Does it sound nice for you to have the house paid off before your 30 or 40 or 51 of it RAM number you want to pick? Do you want to travel the world year after year and your mortgage repayments that is getting in the way of those awesome holidays? Or, you know, maybe you want to pay it off before you start having Children. A lot of people don't consider it, but you can actually powerful moves and then have Children and never actually have a mortgage over your head. So one other reason that a lot of people have is security. So a lot of people don't like having debt hanging over their head for years and years and years. They wanted just cut to the chase, paid off in 78 19 years and then be done with it. Never have to deal with any debt whatsoever again. Whatever it is, sit down over the weekend, discuss it with your partner, have a think about it yourself. If you don't have a partner and come up with your reason, it needs to be a very important reason that is meaningful to you. And the reason is because otherwise you're gonna fall off the bandwagon during the boredom phase. So I like to call the Borden phase, generally about 2 to 10 year period. So in the first sort of 6 to 12 months off, doing this course and really attacking your mortgage is going to be quite exciting. The loan term will reduce quite a lot as you ran popular payments and get this strategy into full gear. It's gonna be very exciting seeing that term go from 30 years, you know, 20 years to 15 years and then just cutting it hugely. Damn exciting. After that initial sort of excitement period, Atmore turns to efficiency improvements. So making a lot more organized, paying your bills bed are organizing your bills. Bed are perhaps getting a raise. There's lots of things that will cover later on, but generally it's making your life more efficient and just tweaking everything here and there that could take anywhere from a year to two years. But you know, you can do this. You can keep improving for ever, and you know that's fine. But for what I find most people, there's usually a point where you just generally stop. That's not worth your time and effort to tweak it. Just that little bit to be. Get that little bit more repaying you take it from nine years toe. My point is, it's not generally worth it. So what actually happens is this is where you start to enter the boredom phase, where you've done all the work. You've set up all the systems and everything. Everything's automatic, each pay, you know the money comes out of your can't goes towards your mortgage or magic. You don't have to think about it, and your debt is being paid off extremely quickly. It's a fantastic result, but it's boring from that to 10 year period. That's eight years or so where you do nothing but sit back and watch as your mortgage gets crushed. And while it's a boring period, and that's a fantastic thing because you tried and they feel often no, have to worry about it. It is quite good. Um, the excitement will be Don't over this period. You have kind of figured it all that. So this is what I call the boring phase. And as I said, it's a great thing. It's actually what you want. You want your finances to be automatic, but it's also one of the periods that you will need your reason most. So this is because you don't ever want to ease up on those were payments. They should always at the very least, be staying the same. That should hopefully be going up as you, as I said, become more efficient, maybe get a raise, whatever it might be if you don't have that reason of yours. Without it, there's gonna be something shiny that's gonna come along, something that you will want over those next 2 to 10 years. 10 years is a long time. As I said, there's gonna be a huge amount of technology, inventions, cool things, cars. There's lots of stuff that you will want to buy. I can almost guarantee it and just imagine that you've got an extra $1500 per fortnight as a repayments. I'll cover how you get to that later, but just assumes enough. You've got that repayment that's coming adage fortnight, and it's very tempting to G. O. I could just, you know, by phone or by laptop. Or we could go on that awesome holiday that we just saw an ad for its very easy to slip and just, you know, have that loan term. Instead, start going up instead of down. That's what I'm trying to say. It's very easy to fall into this false sense of, you know, being ahead you already. You paying your loan off in 10 years you're ahead of everyone else is doing fantastically so you deserve to go on a holiday or to get it shining you laptop or whatever the gadget of your dreams might bay. And it's this term this I deserve it that, you know, advertisers and the media take quite a lot of advantage on you. Hear it all the time. People saying it that I deserve that chocolate or that holiday, whatever it might be. And this is why you need your rate. Your reason. This is why it's so important to have a good reason that's important to you, that can slap you out of this delusional state that you deserve something. Then you very well might deserve it. And you might take some money out once in a blue moon, but it should be for real emergencies. When we were paying off our lawn, we did it in 6.5 years, and we only took money out once, and the reason we took money out once the reason we deferred payment for think it was two or 34 nights was to do something that was on both of our bucket Lists are extremely important thing, and even then it was right near the end. I think we had about the rial four months left when we did it, so it wasn't a huge deal. If you're taking money out multiple times over the multiple years, you're going to see that loan term start to increase to 12 years to 15 years, going the opposite way of what you want. So it's extremely important that you find this reason and that it's important to you and it can just slap you out of everything. Sir, let's go into the next lecture, which is creating your reason. 3. Section 2 - 2 - Creating Your Reason: Hey and welcome to Lecture To, which is creating your reason now. We've already covered a few possible reasons before Ah, which they might match up to what you want to achieve. They might not. Maybe you like. The idea of never having any more debt, which is good for some family is a bit more important, though they don't want to be restricted by a mortgage when they have Children. From what I hear, they're hard enough to deal with without financial burden. So if none of those reasons have actually said of jailed with Udo, let's have a look at what sort of constitutes a good reason. So looking to the task ahead, the reason needs to be something to spare you one in the face of adversity that needs to be something that you or both of you, honestly care about. And it needs to be something that means more to you than just a toy or gadget or holiday that you've been wanting. So it needs to be something that when you think of it, it just completely overrides everything. It doesn't matter if it's a cool new iPhone or a fancy trip to the Bahamas or something like that. It doesn't matter. You've got your reason, and it's more important to you than that hard. It's more important to you than that phone. So this is the type off raisin that you need to come up with and that you need to invent. Now it's possible that, you know, you might start thinking along these lines in the boredom phase or maybe even earlier than that. But, you know, you might be cruising along doing quite well. And you, Ugo, should we should we buy that trip? Possibly. You know, we've been doing quite well. We've paid off 20 grand off the principle of our mortgage, I reckon, you know, between you and Merrick and we're doing quite well, I think we deserve it. I think we can skip, you know, just just one or two of these sort of repayments. You know, this'd is the type of thing that should start setting off alarm bells in your head. This is what your reason is there to stop. Otherwise, as I said before, your long term is just gonna start expanding. It's going to start going from 10 years at 11. Ease as you go on that holiday Got 12 years as you go on another holiday, and it's very easy to slip and just fall into a false sense of security. Your reason should basically slap you in the face and just say, What the hell are you doing? You know, don't you remember why you're doing this? Don't you remember why you're paying off this mortgage so quickly? It needs to be an important reason for you. Now, for my wife and I. It was a combination of a couple of things. We both had the desire to own the roof over our heads, no matter what. So it didn't matter. Both of us were five. Still at least had a place to live. Um, the other reason was for security through tough times and throughout the long hole of paying off their mortgage, There were quite a lot of things that, you know, tempted us that maybe we should skip a couple of weeks or months, something like that, and going on holiday, whatever it might have been. But because out raising was stronger than those things because we knew that we had a goal in mind and we wanted to get to that goal. It kept us on course and allowed us to pad off so quickly. Otherwise, who knows? Model tetanus. 15 or 20 years, depending sorry to create your specific reason or reasons. Have a good think about why you want to pay off that mortgage so quickly. Now, I know this is how to create your reason, but I can't create the reason for you. Every person is different. You have to sit down, do some work. As I said, tell me a little bit. Have a good think about why you want to do it, you know? Is is you wanted to do this Just a quick fad that you know is gonna be gone later on. Or is there a solid reason for you wanting to do this? You need to know. So psychology as well as great planning and tracking make for an amazing combination that can push you to retrieve really, really good things. A trend Mawr and more people are actually coming to realize is that the whole thing is are you know, you just need to try harder. You just need Teoh. Try that diet. You need to do it harder again. put in more effort, sort of thing isn't actually the answer me a shooting. You are putting in at least minimal effort. What you actually must do is kind of outsmart yourself and craft your life so that you don't actually have to try harder. So with a rock solid reason about why you want to kill your mortgage if you say we want to finish our mortgage in 10 years so that we can then have Children, that reason should make it not actually hard for you. It should be something that you want to stop yourself from going on that holiday. You want to stop yourself from buying that iPhone because you wanna finish your mortgage and have Children, that's your plan. That's your reason. It's not hard for you to try and resist of those things because that's what you want. That's the reason you set up for it originally. So that's where the psychology and the actual planning come together to make it not something that you're constantly telling yourself. You can't do something. It's what you actually wants. Much better combination, believe me. So once you have your reason, make a note of it somewhere and then we can move on to the next chapter 4. Section 3 - 1 - Why Get Rich Schemes Never Work: welcome to Section three, which is the Gwynn's. So not tomorrow ago I stumbled on a website. I know there are websites on the Internet and it was called I will teach you to be rich. And the first thing that popped into my head, as probably is popping into yours is that it sounded like a giant scan. It also back then looked like a giant skin. It was horrible, you know. It had 90 style, you know, Website graphic design. It was just it literally had. This is not a scam written on the top corner. So, you know, I didn't give it much credit at first, but it actually turned out to be a fantastic site on the person that Renate focused a lot on what he called big wins. So a big example that he gave for it. Waas stop trying to save on coffee and instead focus on getting a big graze. That's a big wind. So the main principle behind this is that you might spend day after day focusing on not buying, for instance, coffee it to $3 a pop, and that can save you a small amount of money versus focusing on a big win and still buying that coffee and end up getting a $10,000 raise. That $10,000 will just crush the cost off, paying to $3 a day. You get your coffee, you end up rich up. It's just overall better. And it is right. I mean, going after these big wings and just ignoring the small, irrelevant day tiles is actually what you want to do. You want to go after the things that you the biggest result. So the first big win that he focused on was actually automating your finances just as a general. And are we talking about how to automate your mortgage repayments as well? But I just wanted to also make a point. Everyone kind of wants this sort of huge progress really, really, really easily. Ah, a big return for not much work. It sounds fantastic. You know, it's the basis for most gambling things. It's the basis for moderate type staff. It's the basis for, you know, get rich quick schemes and pyramid schemes. You pay a relatively small amount of money upfront and in return you get thousands 1,000,000. Whatever amount of money that they want promise to, and I think we all kind of know that they don't really work, But everyone still dreams of it. Everyone still wants it, and everyone encourages everyone else to go after it. So I'm sure you've heard that, especially with the lottery style, get rich quick schemes that, you know you gotta be in it to win it, says the daydreaming person at work. Most likely. And, uh, as I said, I think deep down we all know that it's never really that easy. It doesn't really happen. Usually it's just a trap where you end up making someone else rich. You end up making the company that owns the lottery rich. You're not making the gambling casino rich water, horse race, betting people rich, and it can actually be worse than that is. Sometimes you put in a lot of work, and you might also put in a lot of money and you still get nothing. Or maybe you even go backwards, which is just around very frustrating. So let's have a look at why these get rich schemes never actually work, so the short answer is basically just ridiculously unlikely to ever happen. So when it comes right down toward most get rich quick schemes are probabilities games, as I said things like the lottery, things like gambling, things like pyramid schemes. Everyone puts in money and a lucky 1% point or 1% even make out like absolute bandits. They get thousands or millions of dollars. Everyone else gets nothing. Of course, the's Airil prime examples off them, and they're also very similar in another way, and I'll explain that later. But if you're trying, Teoh, get a big win your whole life, you know you can spend your whole life playing whole life gambling and you'll never get looking basically, or just the probabilities that so high that you will never see any result. So just a hilarious bit of information. You are more likely to be killed riding on a horse. Then you are toe win the lottery, and that's here in Australia, where we have relatively small lotteries compared to other places like America. So just think about that next time you're going to the lottery. But there's also they also a passive methods. So what this means is that when you go and do something like the lottery, it's a very passive method. You put your money in and that's it. Control was taken away from you. You're not doing anything. There's nothing you can do to make the lottery winning in your favor. Yes, you can choose some numbers, but once you buy your ticket, that's it. You can't ensure that your probability of winning increases or anything like that. So you don't control the bulls on the lottery. You don't control the racing horses or the slot machine Kurd. That might be a, you know, Game one casino, and you certainly control the pyramids. Game tactics. Sorry. The reason this works most the time, psychologically speaking is that people are attracted to this passive, you know, type off game playing. It's mentally and physically easy. I don't have to do when you think you don't think about it, and you think then actually physically doing something or mentally doing something, and that's why it's so attractive. And while a lot of people enjoy playing it, and it also allows us to have someone else to blame when things go wrong. So if we don't become millionaires overnight, it's fantastic. Teoh. Just blame it on bad luck and say, Oh, it wasn't my fault that I'm not a millionaire trying. You know, I'm buying with these lottery tickets, but it's bad blocks for that, not a millionaire. So although there's a lot of these negative tops off big wins or get rich quick screams as they usually called, there are other types of big winds that are very different in those two key ways on and they're both active. And the probabilities of actually succeeding at these big winds are much better and actually depend on you and what you physically do, so let's have a look at them and move on to the next section. 5. Section 3 - 2 - The Big Wins To Focus On: how you go, Welcome back and let's take a look now at which of these big wings to focus on now that you know what the big win is. So just because some of the previous big winds that are being mentioned before such as a lottery aren't particularly what you should be focusing on, that doesn't mean that we should discount all of them. So one main thing that led me to paying off our mortgage a lot quicker is that I'm very efficiency driven. I've I like to do things the most efficient way possible and wanting to get the best results the quickest. I decided to tackle the biggest issues first and leave all the other sort of minor things. Just, you know, I'll do them wait up. I want to focus on biggest things first and then work down the chain off. Biggest medium, smallest, etcetera. So something like petro. A lot of people complain when petrol grows up 10 cents or 30 cents, or whatever it might be, they spend the day winding about it. It doesn't matter to me, you know, I want to focus on our mortgage that can save hundreds of thousands of doors. It's far, far more productive and more efficient than focusing on how I can save 10 cents the lead out of petrol. So however, where, as I stated above many big winds, can lead you down a path off hopelessness, so they don't have very good odds. You know, I didn't want anything that wasn't under my control when I was looking for something that, you know, I can focus on and save the most money. And although I ended up obviously focusing on a mortgage, I just wanted to give you a bit more inside into how you can identify between a big win and something that isn't that may have a lot of money involved, but it's not necessarily a big win because the onto to Heil whatever it is. So with that in Marende, let's have a look at this. So on the left we have true big winds, and on the right, we have fantasy dreams, say true big winds are one thing. Flee under your control. You also see a direct cause and effect when you do so. In the case of a mortgage, you put $1000 towards your mortgage, your mortgage goes down by 1000. It's very simple. That's a direct cause and effect put money in, goes down in the story. Contrast ing that with fantasy dreams. As I said, there's a very passive and that usually take control out of your hands, which people psychologically enjoy. But it doesn't particularly work well because when you wait in the wings for other people you're putting, then in the spotlight and you lose all control nothing you do matters. You know you can study really hard and during your figures, but you don't control the horse that's running in the race that you just bet on. It's out of your control. So the other thing that you want to focus on is big winds should have a very high probability off succeeding if you do them. So if you follow the steps outlined in this course, you have a very high probability off paying off your mortgage in under 10 years. I'm talking odds like 95% plus so extremely, extremely likely that what you do is gonna end up with the result that you want again with fantasy dreams. I have extremely lower probabilities of succeeding, so things like one in a 1,000,000 for the lottery or being one of the top 10 stars in the blogging world. So blogging is one of those things where a lot of people do it. There's millions millions of people that are doing it, but only the top few really get a huge men of the money. The rest get virtually nothing. So these are sort of the core differences between true big winds and fantasy dreams that you might hear advertised or toll. So some other examples off what these big winds are might be saving for your retirement. Another huge wind. You can front load a lot of the work and get fantastic results over the rest of your life, finding a better job So this cannot really help you financially. Obviously, if you find a new job, a better job with $10,000 raise, it might not sound like Ajai. Enormous amount of money $10,000. But you don't get that once. This is a big win, both in the fact that you get a big win of $10 dollars, but you keep getting that $10,000 every single year that you work, you know, and usually we'll find another job that will be even higher light around. So that's a particular good one end, of course. Paying off your debt quicker, such as your morning. So all these big winds, As I said, they're not passive, that they're active. That actually takes an effort on your part. But what all of them has is that they pay off 10 times as good as most other things and most other things that are passive and incredibly low probabilities of winning. They don't tell for all you you don't win, ever you get zero whereas these ones, you put in a little bit of work and you get fantastic results So you can put in an hour searching for car insurance and, you know, maybe negotiated down $100 which is fantastic. You know, we'll be covering some of this sort of stuff later on. But what I really want to ram home is that even at $100 an hour, which is quite a bit higher than what most people usually earn, there's still bigger things that you should be focusing on. You should be focusing on for the most part, your morning. Your mortgage is quite possibly the biggest loan you'll ever take out, and with it it becomes the biggest opportunity you will ever have in your life off saving a huge amount of money. So focus on this big win, and let's begin to cover your mortgage in the next lecture. 6. Section 3 - 3 - Your Mortgage: or uh so now that hopefully you understand what a big win is, we also know that we shouldn't delude yourself by giving away control or investing time and things that have ridiculously small amounts off probabilities of winning. So what about your mortgage? You know, does that fit into being a big win? I should think it's pretty obvious that it does. But, you know, mortgages. Can they get quite complicated very quickly? There's, you know, interest rate. It's add Helen Loan term is, you know, the interest rate changes over time as well. Sometimes different parts of the mortgage have different interest rates. Sometimes some of them are variable, some of them fixed. Sometimes parts of the mortgages variable in parts of the other mortgages fixed. It's, you know, I'm not gonna lie. I'm not delusional, though I know that financed to a lot of people is quite frankly boring as that sleeping dog shows. So there's a lot of complicated financial terms as well as many conflicting opinions out there from a lot of financial experts. But you can do one thing that will pretty much guarantee you results in your mortgage. 100% of the time, and it's fully within your control. So it meets both those requirements of being a big win and you'll see immediate results. And best of all, you get to cut through all the crap as, quite frankly, I've tried everything. So after many years of studying this problem, after helping a lot of other people with this problem, after creating many complex spreadsheets and riding for years, I've pretty much covered everything off. Read all the material. I've tried all the tactics or the, you know, tips and hacks that all these websites put up. I've analyzed the various paths that you can take by paying off mortgage in many different ways. I've looked at all the different banks, at least in Australia and what they offering or the different plans that they have that you could potentially take. And if I had someone hand me this course back in 2000 and nine, when we first got a house and we started paying it off, I would have been absolutely thrilled because I spent years researching this making mistakes, and if I had this course I would have been able to watch it, learn from it implemented and then basically just get on with my life. You know, I could go out and hand with their friends. Or maybe you want to spend more time with their Children. Whatever it is, you shouldn't be focusing, you know, 100% your time on solving your financial problems. It should just be automatic and be in the background, solving itself as far as I'm concerned. So there's one critical point when it comes to mortgages. If you focus on this point and get it right, you will pretty much never have to worry about your mortgage and or the silly, tiny details like you know what a lot of financial experts talk about such as, Should I change my repayments to be fortnightly instead of weekly? You know, it's as far as I'm concerned, a minor data when compared to this critical point. So the other great thing is that after doing a small amount of work up front, you reap the benefits for the rest of your life. So in the example we have before about $400,000 mortgage at 7% and when you pay it off in 10 years versus 4 30 alone like most people do. You save about $400,000 in interest. And while you don't see it in that initial tinny period where you're paying it off, you do see it later on in life. And I should hope it would be extremely helpful to have $400,000 extra later in los. I mean, what could you do without money? How much would that help your life later on? To have all that extra money instead of it going to dependents? So what does it all boil down to? What's the key? Critical point. You've probably read it already. Here it is. Set your payments high and make them automatic. That's it. Now, as I said, don't be fooled by how simplistic descends I've already gone out and looked at all the other possibilities and all the other things that you can do to try and pay off your mortgage. This is what I want you to focus on. This is the key critical point because it will make the most different so you can scheme and wrangle and argue over the millions of other data files and things that people might suggest, or talk about you can do it for years and years. But the reality is without throwing large amounts of your income at your mortgage and doing it consistently, it's really not going to do very much, so you're basically instead just sit there spinning wheels while the banks breaking all that interest that your painting. So focus on this critical point and basically, just watch as everyone else that there continues to focus on those small details and the petrol changing there mortgage from fortnightly Toe weekly or these small things that basically do nothing can. What you'll find is that after the 10 years you're paid off your mortgage, you'll be debt free. Don't still be in the same spot they were 10 years ago, or pretty much the same spot they were 10 years ago. Thou basically going nowhere. So in the following chapters will dive much deeper into the above statement. I know it's a very simplistic statement, but it how holds a lot of power and I'll explain how best to do it. But at the moment, I just really wanted to introduce the topic and get you to start focusing on it and knowing about it. The flip side to this statement is, for example, only using the extra money you get at tax time or once off payments to put towards your mortgage. So these do, of course, help. I mean, any money you put towards your mortgage is going to help, But it pales in comparison to pushing, say, an extra $1000 every week, extra $1000 on top of your payments every week until mortgage automatically. Now that amount that $1000 might sound obscene to have an extra 1000 always going toward to a mortgage every week. But many people are already doing it. We did it. We did a lot more than that. We were doing it, and we'll go into further details later on about how you can get access to this money. But I can understand that you may not know how to do this critical point, but as I said, I just want to get this idea out there and sort of put it in your head so that you're thinking about it a lot more. And I also want to say that getting our mortgage under control has made quite the difference to our lives, and I know it will make a big difference in yours as well. True big winds like paying off your mortgage are usually a much longer term thing than something like putting down $5 for a lottery ticket. But they do get you disproportionately bigger results. So a lottery ticket might get you zero results because, quite frankly, you're never gonna win the lottery. However, paying off your mortgage is guaranteed to get your result, and it will get you a disproportionately huge result off $400,000 in your pocket over the rest of your life. So next up, we're going to go a lot deeper into the possible ways that experts suggest you pay off your mortgage barely and why they're all basically uses. Because most of the time that I mentioned this critical point, So join us in the next lecture up and I'll see you 7. Section 4 - 1 - Things That Are Critical: are you doing? And welcome to Section four, which is what's critical. So I'm sure you've seen a number of those articles that generally have the headline something like five fast tips to pay off your mortgage faster or 12 great ways to kill your mortgage or some giant list of ways that you can pay off your mortgage quicker. And they, you know, have you spending every waking hour of every day working on your mortgage. Now I just want to ask the question, Do you really want to be doing this? Do you want to be spending all day every day, all year long, trying to figure out how to pay off your mortgage? You. Would you rather do what's right and what has the biggest impact and then get on with actually living your life? As I said, I think that these sorts of systems should be automatic. That should be happening in the background. You shouldn't have to exert willpower every single day or do something every single day to make this happen. It should be automatic happening in the background for you. So that's the default scenario is that you're crushing your mortgage every day, and the main point in the last chapter is indeed the most critical. But what I wanted to do here is to go through this huge list that many other people say of tips and tricks on how to power feel mortgage so that I can explain to you why they are or they aren't important and what you should actually be paying attention to. So over the years, I've read literally that person's off articles and books and comments and tricks and hacks on how to pay off your mortgage early, written by a lot of industry experts and to some of this knowledge up nice and quickly, I've condensed it into three main categories. So they are, as you can probably see from the course curriculum, things that are critical, things that do a little and essentially, things that do nothing for junk. Most importantly, the bluest sorting allows you to choose how much time you would like to commit to paying off your mortgage. So if you simply want to do the bare bones minimum and get the most impact for, which is probably what I would suggest, especially to begin with, just pay attention to the things that are critical points now, later on, if you want to go that extra mile and you know, do you even more work than you can start looking at the things that are critical, as well as the things that also do a little. And the last section, as I said, We'll teach you what to ignore. So what? You don't have to pay any attention to it because, you know, just waste your time, so let's get straight into it, which is things that are critical. And as I said, the number one point of this is setting your payments high and making them automatic. Now this is the most critical thing, as stated before. And do you really must be doing this. It's the single biggest thing that you can do to power your mortgage, and if you're not doing it, it's, you know, you're just gonna get in our way. Basically, I'm not talking about, you know, one time bonus, like a $2000 bonus you might get at the end of the year or a tax return that you might have something like that. I'm not talking about doing a one term thing. I'm talking about sitting your payments high up and making them automatic said. This automatic recurring payment to your mortgage is what will basically said it in the background and have your mortgage paying itself off over the many years that you'll be doing this. And it has to be made up off a sizable chunk of income. Now, from here, your main focus should be on finding mawr available income by cutting costs, increasing efficiencies, possibly getting a raise or starting siding Tom or generally earning more. And if this seems like it's sort of going too far for some people, then I'm afraid you're just not being quite realistic. You likely only have a finite amount of money. You know, I don't know of anyone that has unlimited money, so you only have a certain set amount of money. And if you truly want to achieve the goal of paying off your mortgage early than the bulk of that whole money, you know a good bulk of it is gonna have to go towards paying off the mortgage. Now I reckon that most people can rework that finances and have upwards off 70% of their after tax income banks into their mortgage. There will be a lot more on this letter. There's a whole section dedicated to it. But as an example of why this is so critical, I just want to give a quick comparison. So in the example above, imagine you've got a fantastic bonus. You've done very well and you get $2000 as stated above paying extra good. You put all of this straight into your mortgage, which is fantastic, and as a result, your mortgage is $2000 less now to give you a comparison to it, a very small table. There's another person to. Instead of getting that boaters, they simply increase their payments by just $200 in $2200 every fortnight. So that's $200 times 26 Fortnight's. As a result, it's almost a three times increase in terms of how much less than mortgages. So this is a critical point. As I said, it is the most critical. If you're not doing this, you're essentially going nowhere. So you need to focus on this and hope it's starting to really ram home now how important this point is. Next up, we have motivation, and you're pretty much never hear any actual financial expert mentioned this one. It will never appear in Those articles has topped in this. But as mentioned before, while it sounds like something you might just shrug off, it's actually very critical. And even if you're destroying it in 10 years or something, that's still 10 years. You need to keep up this motivation of paying off your mortgage, and without it, there's sure to be something else to tempt your money away. You know that holiday, that shiny laptop, whatever it might be, and this raisin, which are heart we've already created what they you know to be mortgage free before you have Children. It might be you just seek of being in debt and want to never have any debt again in your life. Whatever it might Day make sure is clear and on display somewhere, So this could mean physically might actually write your reason down on a physical piece of paper and stick it to the fridge somewhere that's always on site. Teoh remind you every single day why you're doing this, or it could be virtually inside a spreadsheet that you used to keep track of your finances , and you check, you know, every pay or something like that. Next up on the list, we have cutting costs and increase increasing efficiency, so this is a very critical point. Bodies after the other two. The more you do of this, the sooner you'll pay off your mortgage. It's pretty simple like this and that extra money that you save by cutting costs and increasing efficiency gets pushed towards your mortgage. And it ups your payments, which decreases your loan term. And it's, quite frankly, that simple. It also has the added benefit off, often simplifying your life. So, you know, as an example, you might not really be that interested in cable. So you cut your cable cost. That not only saves you money not only increases your mortgage, your payments not only decreases, you're loaned that it makes your life simpler. You don't have to deal with the cable companies you don't have to deal with. Paying that bill, uh, often also means it's better for the environment. If you save on water or save on electricity. It's just generally around Good. Next up, we have never redrawn money from your mortgage again. This is another one that will rarely, if ever, be mentioned. And it's quite important. As I stated before, It's very easy to get into that wrapped off, taking a little bit out and taking a little bit out and your mortgage term just increases and increases, sir, you may want to take it out, but it should only really be for true emergencies. So I'm not just talking about, you know, if your water heater explodes or some think you should have a small emergency fund for those sorts of things. True emergencies is when you know your house burns down when someone is to pay 10 or 20 or $50,000 worth of medical bills or something. Those are true true emergencies. The other things just blips. They're annoying things that you might have to pay $500 or $800 for. You should not be taking money out of your mortgage for those types of things. If someone has a $50,000 medical bill to pay, that is a different story. That is a true emergency. But for everything else, you should have your many emergencies, so next up will move on to things that matter a little 8. Section 4 - 2 - Things That Do A Little: So now we're going to look at things that do a little said to begin with. We have having an offset account now. There's no doubt that these allow you to pay less interest on your mortgage. However, you want to make sure that you're still coming in out in front after all the extra fees and you know things that don't likely be making pay. So that being said, it does save you money on your loan, and it's likely to be a good thing. But it's probably not gonna be a huge amount when compared Teoh critical things above. As I said, those are the main points that you want to be focusing on. You want to make sure that you've got them absolutely down pat before you start moving onto these other you know, things that could do a little, and we're also dive more into offset accounts later off. They're quite popular, so I devoted a whole section to it. Next we have review and possibly refinance you loan, so you want to keep an eye on your loan and make sure that you know the bank hasn't released any new products or they haven't changed the interest rates or whatever it might be you might be on a really top tier plan in the bank might have completely changed how they do their products. And now there's a much cheaper one that gives may be exactly the same. Teachers is what you want, and you can get a much better right just by brief fine. 18 your loan. So, to be clear, I'm not talking about refinancing your loan as in changing toe a separate bank. I'm talking that stained with the same bank but going to a different product that they might have that same back. So it's quite a good thing because you can usually get a better right than you know what you're currently on. And you don't have to pay a huge amount of money to go to a different bank. And while it shouldn't be done away the time because it can cost a bit of money, you should make sure that you review your mortgage roughly about every year. I would recommend when we had our mortgage, I would generally spend about one hour or so Most years. I just said a reminder, and I just go to the bank's website and have a look at their latest products What the interest rates are. You know, just give it a bit of a sandy check. Make sure that you're not paying one interest rate when they're actually offering a completely different lower interest rate to ever or notice. You can call what and say, Hey, what's happening? Why am I on this ridiculous interest rate where I should be at this lower? A one hour sanity check could save you a lot of money, So this is a very popular thing. Another one is not paying for features on your home line that you are not going to use. So this seems like a pretty simple enough premise. However, a lot of people end up doing this. They end up, you know, don't negotiate their mortgage and set up that plan right at the stop. And then as the years pass, things change. Times change, and they don't use any of the features. Or maybe they never used it in the first place. And they're still paying those high fees and those high costs to have access to those features that they never actually used. Instead, you can just go into a more simpler plan and not have to pay those fees. Now I consider a feature unused if it's costing you more money than what it's actually saving so again, or to simply use the example of the offset a camp. Sometimes banks will charge you a yearly package fee, or they might even charge you more than $400 might be $800. Whatever it is, you want to make sure that you're using that feature and it actually offsetting. Offsetting that $400 or whatever that feed their charging is if you're not using it. If you've got zeroed, always genetic offset account, then I consider that a pretty unused feature. Next up, we have park lump sums off money in your mortgage account. A lot of people I don't want about this in articles and that, you know, if you just happen to have $20,000 sitting around some extremely strange reason, you're much better off, you know, putting that in mortgage and at 6% it will save you 20,000 times 6%. So I don't say $1200 a year in interest. And yes, this does make a difference to your mortgage. Yes, the math is correcting. Yes, they are correct in what they're saying. But you know what's actually better than doing this is paying attention to a critical point again. So setting your payments high, making them automatic so that over the year you're paying off as much as you can towards that mortgage. And what ends up happening is you never enough having our random $20,000 sitting there, doing nothing that's always being in your account. It's always being offsetting that interest and helping me pay that mortgage down quickly. So that's why this isn't a particularly important one. You should be folks single next up. We have ensure you pay on mortgage weekly or fortnightly or monthly said. This is a very common tip. You'll see it almost all the time in all the lists and allow the articles that go on in order that had a pay off your mortgage quicker. And the reason that it's so popular is that people look at this on a repayment calculator and they think there's a huge saving in interest. I think there's this free lunch that they can, you know, just change this one little setting toe fortnightly or whatever it is, and I instantly save thousands of dollars in interest. But when you actually look at it, I'll try and explain it as clearly as possible. There's only a very little saving. So for a loan of about 250,000 at 7.5% interest, it was calculated to be about $32 a year savings. So where's this difference? I'm saying 32 other people saying this. Thousands of dollars. What? What explains? It's different. So what it is is if you are paying your mortgage monthly, you have 12 or payments each year when you calculate that in fortnight's generally comes out to be 24. So for monthly repayments, you do the equivalent of 24 fortnightly or paints. When you're paying your mortgage fortnightly, you actually have 26 repayments, so you've got 24 versus 26. I hope you see what the difference is with the four not fortnightly one. You're actually paying two extra payments to your mortgage. So of course, that's got a powerful mortgage quicker. You're paying more money to your mortgage. That's where the difference comes from. That's not a free lunch that you're getting by just changing this setting. It forces you to pay more towards your mortgage, which definitely wrong. That's a good thing. That's what I'm advocating for a lot in this course. But make no mistake, it's not a free lunch. It's not free money that you're taking back off the bank, your voluntarily, paying more money towards your mortgage. You're not saving a huge amount of interest. As I said, that's only about $32 a year. So that's why I put this kind of right at the bottom where it's talked about a lot. But it's not actually a very important theme when you actually do the proper calculation. So next up will go into things that do absolutely nothing. 9. Section 4 - 3 - Things That Do Nothing: So now we get to things that do nothing, sir, these other things that you should really not pay any attention to and just, quite frankly, ignore. So I'm pointing these out so that, you know, to ignore the 1st 1 is to make flop sum repayments or many lumps on repayments. Now I consider this to be pointless or even damaging advice as it encourages you to have a once off higher repayment instead of continuously higher payments that are automatic. So, as I said, this is where you make a single repayment. You wait the entire year, you twiddle your thumbs. You do absolutely nothing at all. And then when you get your tax return or burnison the end of the year, you put that $2000 towards your mortgage. That's damaging advice. You're spending an entire year wasting your time. I would rather you set your mortgage repayments higher, make them automatic and have that happening the entire year. Rotten, just one tiny event that happens right around. So this is birth mathematically and psychologically better. So it's mathematically better because over the years you're putting your money straight toward your mortgage, and it's offsetting that interest for the entire year, as opposed to waiting all that time, then putting a tiny bit of money in. You're also putting a lot more money inside, offsetting even more interest. And psychologically it's better, because when it's automatic, you adjust to this. You know your income goes in and it goes out. You adjust to this new reality that you have set up for yourself, and you don't actually feel the loss associated with making a lump sum repayment. So if you get a bonus, might be super excited about it. You're like, Yeah, I got $2000. But you know, you have to give that money away to your mortgage. There's a psychological loss associated with having to Oh, you know, I did have this money, but now I have to give it away when it's automatic and just happening in the background every single fortnight, you don't pay attention to. It's the default scenario. It is a lot easier for your willpower, and you're psychologically speaking. Mind to just ignoring you. Forget about it. You focus on your life, doing what you're doing. Whatever it is, it's in the background. It is far easier so next one is pay for your establishment fees or government fees up front . Now, the theory behind this one is that when you get charged, bank fee such as establishment see, they added to your actual mortgage directly so you might pay, say, $600 for a loan approval, see which is ludicrous and even gonna get into that. But instead of just having to pay $600 they put it on the mortgage, and then you pay 7% on that actual 600 door fee, and that amounts to about $40 extra. You'll be paying every year interest on top of that. So they say you should pay that $600 completely first, so you don't have to pay that extra $42 every single year. And whoa, I great, I'm not. You're going to say that I would enjoy paying an extra $42 on an already ludicrous $600 fate. To begin with, what I marketer realizes that this does pretty much nothing. You're talking about $40 here in the grand scheme of things for your mortgage. It's not hundreds of thousands of dollars. As I said, you don't want to be spending every waking minute of your life trying to figure out how you can pay off your mortgage faster. You want a system that does the bulk of the work in the background and gets it done in under 10 years, which is what I'm teaching you in this course, this sort of minute tiny thing. Just ignore. Focus on the bigger things and just don't waste your time. So moving on, we have a line, your mortgage ra patients with your income Now, this won't do anything at all to powerful mortgage faster. And don't let anyone tell you it will. That being said, it's easier financially for you to have your pay come in and then go straight out into the mortgage each fortnight, a month, how often you get paid by all means, do it, set it up that way. It's something that is convenient. It won't make you powerful mortgage quicker. Increase your payments while rates are stable again. I put this in the dangerous or damaging territory because that encourages making these lump sum repayments or making your payments higher. Only in certain times there shouldn't be a certain time that special feudal power. If your mortgage it should be happening every single fortnight without compromise for years and years and years, this is the critical point. Put your mortgage repayments high and keep them there. Make them automatic. There is no special time to powerful mortgage. The correct time is all the time. So that's why I consider this junk and just damaging and dangerous. Next will go on to final points. 10. Section 4 - 4 - Final Points: So now we have final points and junk as well. Miscellaneous. There's a lot of these junk articles or posts or opinions out there. However, few of them really hit home a just how important the above critical points are. So to put this in perspective and to give you a few more live examples, let's go into a bit of a comparison. So imagine you have Lauren at 300,000 and it's at 7% interest rate. So person a does. You know, the advice of putting $20,000 into their mortgage offset accounts that doing what the experts have said, they have a $20,000 offset account that offsets 7% and that equals $1400 a year. That saves them $1400 a year in interest and over a full 30 year mortgage because you know they're still paying a 30 year mortgage that saves them $42,000. Now compare this to just doing the one piece of critical advice. So Person B Intern spends a few months and actually figures out how to increase their payments. They go from $920 a fortnight, which is what you would pay for a 30 year loan for $300,000 mortgage it 7% and instead they increase it up to 1600. Now again, we will cover this later on with me in this example, they increased their payments and they keep it high and they do it year after year. They said it to be the default repayment and lo and behold, after 10 years, they're paid off there in time mortgage, and they've saved over $300,000. Now, I don't know about you, but I would rather that scenario than saving $42,000 having your mortgage paid off 20 years earlier and saving over $300,000. That's why this is the critical point. That's why this is so important. It makes a huge difference if you pay attention to all the other junk and things that do little things that do nothing. This is where you gonna baby you're still going to be paying your loan off. Over 30 years, you're gonna be spinning your wheels. You do get something, you do get a $40,000 saving, which is fantastic. But it's not why you're doing this course, you're doing this course to pay off your mortgage in under 10 years during this course to save hundreds of thousands of dollars, and this critical point is how you do it. So I hope this is really starting to get sent across, even if you just for some reason had $20,000.20,000 dollars is a huge amount of money for most people. Most people I know I don't just have $20,000 sitting around to put in an offset account or something, so it's a very rare scenario, even save this $42,000. But even that rare scenario doesn't even come close to doing just one of those critical things that I mentioned. So when you read these articles that give you a top 10 list or a top 1,000,000,000 list of things to do every second feel mortgage, you know you can read them, take their advice. You know, you might end up actually saving $4800 a year on interest or saving $42 a year or whatever it is. But the important thing is that why you're welcome to read them, make sure you're doing those critical things first, make 100% sure that you've got that down pat before you move on to any of the other things . So even if it takes you a whole year, Teoh, figure out how to, you know, do this to increase from 900 a fortnight to $1600 a fortnight. That's that's no small feat that a good result, but it might take you many months. It might take you a year. It might take you two years to do it. But think about it. You're saving $300,000 by doing that work, even if it takes you an entire year to do that, you're essentially getting paid $300,000 a year for your work or, you know, maybe four or $500,000 that you want to actually take into account tax. That's not a bad deal. And that's one of the main reasons why I focused on paying off a mortgage quickly and hopefully that's enough to get you started. So we're gonna move on to the next chapter and I will talk to you then 11. Section 5 - 1 - What's An Offset Account: a go and welcome to Section five, which is on offset accounts. I said, We'll be covering this later and here we have. So to begin with, let's have a quick overview of what an offset account is for those who may not know. So let's say, for instance, you have $10,000 in savings. You also have a $400,000 loan at 7% now, for whatever reason, you don't want that $10,000 to go into your mortgage. You wanted to be around so that you can use it for whatever reason. It my big you want a totally separate you want to be out of get it that $10,000 whenever you can, and so instead Hugo and getting offset account. So here are two separate examples. One without an offset account on one with birth of them. Use the same $400,000 mortgage at 7% now, without a offset account. It's pretty simple. Your $10,000 just sits in the savings account. It's totally separate to your mortgage, has nothing to do with it. Your $400,000 mortgage times 7% means you're paying $28,000 per year in interest. Quite a lot. With an offset account. You have the same $400,000 mortgage. But what a bank will happily tell you is that you can put your $10,000 in a special type of account called it Offset account. And this account is technically linked with your mortgage on what happens is overall, instead of paying interest on $400,000 the mortgage each year, you only pay interest on the total, which is 400,000 minus whatever is in this linked account in this case, $10,000. So essentially over the year, your paying interest on 400 minus 10 which is 390,000 times same 7%. And instead of 28,000 you're now paying $27,300 in interest per year. So this is obviously a fantastic result. You're paying $700 less interesting year just by having your money in a special link to count, you still have access to it. You can still take it out whenever you want more, and you can make it $20,000 the banks will happily tell you this and try and sell you this and you know it's a fantastic result. You basically saved $700 a year in office. It interest all court, and this seems pretty fantastic. What could be wrong with this, You know, So let's have a look at why it isn't actually particularly good. 12. Section 5 - 2 - Why It's Not Good: So why might an offset account not be a good thing? So the main reason is that offset accounts cost you money. Now they cost you money by having a higher interest rate, or they might even charge you a yearly C or both. So you may have to separate products by the same bank one without an offset account. And that might be at, I don't know, 6% interest rate. The other product will have interest rate included. It might be part of a package, and it might be it's 6.5% interest rate and it might have a 400 door package. He along with it. So this feature that I'll admit, it is a fantastic feature that does save you money. It is also costing you money. And even though the bank will probably go through those calculations and I just went through before and say, you know, look, even though we're charging you $500 a year toe, you know, have this better product with a bigger package and more features and all that sort of stuff , you're still getting this offset account money. You're still saving $700 a year on overall your coming out ahead $200 plus you get all the other features in the package. So you're going to save more due to paying less interest in the long run and quite frankly , there, right? So I'm a big fan of math. Hopefully, you can tell by now and calculations, and they're almost always right, which is one of the reasons why I love it. However, there's a bit of a point here and that you can actually get the benefits of having an offset account, but also not paying their stupid sees, so we'll cover that in the next lecture. 13. Section 5 - 3 - Having Your Cake And Eating It Too: so that I would like to cover one of the main points about offset account and why I think that unnecessary and how you can get the benefits off them without actually paying the extra fees of the extra higher interest rates. And that is to get the benefit of paying less interest. Simply make an extra payment on your mortgage with that $10,000. So in the example, before we had $10,000 we wanted to get access to that $10,000 whenever we could. So for that reason, the person wasn't putting it in their mortgage. But I'm saying, Put that money in your mortgage, dump that $10,000 directly into your mortgage. And although a lot of people will assume that once it's in your mortgage, you can never touch it again. That's actually wrong. See, this is a feature called Redraw, and this is where you re draw money out of your mortgage. Now, this just means that you're taking money out of your mortgage instead of paying it off. So rather than paying $10,000 towards your mortgage, your taking money back out of your mortgage and you get that $10,000 back. So obviously, it's particularly bad to do because it increases your long term. But a lot of these mortgages these days have this feature and now often charges $0 for it, not only for the ability for you to do it whenever you want, but when you actually do go on, do it when you take that $10,000 back out. There weren't charging any fees. Some banks might have a minimum off, say, $1000. You know you can't just go and grab $20 out of your mortgage, they say. You might have to take out at least $1000 to do it that usually it won't cost you too much if anything to actually do it. And if you simply ensure that your mortgage has this $0 redraw facility, which, as I said most of them these days do, you can basically stop paying for this premium feature of having an offset account because you already have it. The whole point of an offset a can is to have a certain amount of money that you always have access to it any given time. If you can read your from your mortgage. It any given time for $0 that's the same feature. There is no different. So why would you pay extra for the other one? You can get your cake and eat it, too. So if there's ever a very large emergency that would require you to all of a sudden need that $10,000 it may take a day or two for you to get that $10,000 out. A lot of them these days do have an instant transfer where you can actually instantly transfer money out of your mortgage into a link to camp. And from there you can do whatever you wish with it. But even within a day or two, you know it's a serious emergency that you really need $10,000.20,000 dollars for you're gonna have a bit of time. No one expected to come up with $10,000 at the absolute drop of a hat. You know, if it's a $20,000 medical bill, they're going to give you at least one or two days to pay that probably a lot longer, so I don't consider it to be much of an issue, even if it has a one or two day lead time with how long it takes you to get that money. Most of them these days don't have that. So it's good now in the next section will cover. Does this difference of paying this extra $500 a month really make a huge difference? So stay with me and we'll cover that. 14. Section 5 - 4 - Does It Really Matter: So now I want to take a look at Does this really matter? Does this really matter? Paying for an extra feature that you can get for free or that you might not even use? So again, Another quick example. As I said when I started this course, I don't like just explaining something moving on. I like to give you a clear example of what I'm talking about. I'm from Australia, So I'm going to use on Australian Bank that's called the Commonwealth Bank. I have a few different account choices. And when I actually wrote this, they had two of them, which was a no fee variable rate loan that waas at an interest rate of 4.52%. It had no offset account whatsoever. It was overy bad bones, minimal. Just here is your money. End of story. Top of a learner was the base product that they offer, but it does have a zero door Rachel option. Now another one they had another product was their standard variable rate. This is the default loan that they would try and push to most people. And that, of course, had a much higher interest rate of 5.22 and it had regional, the offset account facilities. So even if we're generous and say that you know you don't pay off that $400,000 mortgage over the years you paid off in 15 years, that's that's quite a good efforts. I'm being very generous here. Keep in mind the difference that the right would cost you, which you know, these two different products with days to different interest rates. That is what they are charging. That extra interest rate is what they're charging for these premium features like having an offset account, and we can consider that to be the cost of having an offset account. So that extra difference between interest rates is 0.7% worth of interest, which over the full loss of the Lord, comes out to be an extra $26,000. So there's also other costs involves is involved as well. As I said, a lot of banks will not only charge your Hyatt interest rate without also charge you a extra fee for it as well for this standard learn that they give to most people. There was an $8 a month loan service fee. There was also an establishment fee of $600 which was extra. This establishment fee you wouldn't have to pound the other product. We do have to pay it on this premium one. So all up all these fees over 15 years, you know, $8 every month, 12 years. Sorry, 12 months for 15 years. What? That it add another $2000 over lost the Lord. So in the end, you can either do one of two things. You can have an account that doesn't have an offset account with it. And possibly, as I said, most of them don't do this. But you may still have to wait one or two days to get that $10,000 out in an emergency. That might happen once in the entire loan. Is it really worth paying $28,000 over 15 years? That's almost $2000 a year just to possibly take out $10,000 once 15 years, That's I don't consider that worth it at all. And ibeacon see how big of a difference this makes. Why focusing on these other smaller issues that, you know, is my mortgage being paid off weekly or monthly or fortnightly. They only might save you 30 or $40 a year in interest during these type of things can save you tens of thousands of doors. And they're not even the main critical point that I was pointing out before. But it should serve Teoh, make you say that you do still have to pay attention, and ultimately, what you want is the most no frills, basic option that you can, especially one that doesn't have on offset account. Now you need to have. So this is in extra to this. You would need to have about $36,000 sitting in that offset account for the full 15 years just to break even. So not to make money or anything but just toe wipe out this $1800 a year fee that your extra pain. So, yes, the standard very berate does include some other benefits that are the people might want. A lot of them have credit cards and lots of the stuff, but generally you're talking about thousands of dollars every single year that you're paying in extra to the banks. On top of all that interest that your pain. In my opinion, I don't think it's worth it. I don't think you should have an offset account, even if you're using it with tens of thousands of dollars, I still don't think it's worth a go for the less premium account, and I think you end up doing a lot better. 15. Section 5 - 5 - Make The Switch: So now we're gonna be talking about actually making this switch. So if you're already on a loan that has an offset account, you will most likely want to switch down to something that doesn't actually have an offset account and learning about something and actually doing something good. Two completely different things. And as I said, this course is about MAWR than just talking about someone going to to actually take action and do things and get results. So there are a few things that a bank can throw you while you're doing this. I've broken a dent toe a few different steps to make it as easy as possible. I will say, though, just as a big note if your considering switching banks entirely. So all this is about changing products inside your own bank, going down from a top tier plan to a more No, it for it was based plan. If you're looking at moving to a completely different bank entirely, you can pretty much skipped and ignore this. We'll cover a bit more later. Wrong. That will help. So to start with, you want to call your bank and find out what type of loan your on. This shouldn't take very long. You may already know it straight off the bat, but if you don't, you can give them a call. If you're already on the lowest instances of interest rate loan with no offset account, then awesome. Your done You can have a beer, soft drink body, whatever. If you're not however, you to find out what interest rate you're currently on. And you also need to know how much will cost you if you were to refinance down to that lower top off a product that doesn't have an offsetting. So whoever you're talking to should be out of tell you this brought it down. We went to the next step. So next up is to ask them if there are any actual, simpler or cheaper interest rate lines that they can switch you to and how much that will cost. So, as I said, you may end up having to switch to a different bank. But for now, we're focusing on downgrading your account to a simpler, cheaper plan which will end up saving you money. So you need toe. Ask them what type of planes they have. This should be the most simplest learn that they have that still has a radio facility on it . It would be wise and simple to look this up on the website beforehand. That way you have to ask your questions. Note that some banks can charge a fee to make a redraw. Also, I didn't mention this before, but if you wanted to get that $10,000 out there might charge you $50. They might have enjoyed your $100 to get that $10,000 out, as this isn't something you're doing every day. As I said, this is true emergencies $20,000 medical bill, something that might come up once throughout your entire mortgage. $50 feed isn't that much. You're gonna be saving thousands of doors by switching to this lower plan, so I consider that, quite for the new home line should still allow you to make any extra payments you want. This is an important one because we'll be accelerating how quickly you'll pay off your loan so much that sometimes some banks don't like it. They put restrictions on you can only pay an extra $10,000 a year next $20,000 a year. You want to make sure that whatever Lauren product that you're switching to doesn't have any think of this. You should be out of pay online off in a year flat, and it shouldn't make any difference to the bank. They shouldn't be stopping you from doing this. So that's a critical point to make sure that this new type of loan that you'll be switching to doesn't have that restriction on it. So finally, you want to weigh up all the benefits. So using this new interest rate and simple alone, you need to calculate how much interest you actually saved. By doing this. This can get a bit complicated that you want to set up essentially two columns like I had before with without, with offset a candle without offset account. Now that you know how much your mortgages and interest rate, you could put them both up there, you could do the calculation on adding the extra fees, adding, you know the extra interest rate and find out how much you're actually paying to that offset. It can't if you have one each year and then compare that how much it would be if you are actually on the cheaper product, the one that doesn't have an offset account and just generally see which cases better. I can almost guarantee that the simpler mortgage, the simpler plan we'll end up being cheap before you, and you'll still have that added benefit of being out of range role. A large lump sum of money, even emergency, really does happen. So I'll leave that comparison step up to you because it has your unique numbers and your unique interest rates in them. But that's just a step by step process and how you want to go about getting All those details are making that comparison and then finally, hopefully pulling the trigger on it. So another handy resource is a loan repayment calculator tool that I've linked in. The resource is you can use that to help figure out how much interest you'll be paying on. Each of the two scenarios have to play around with it, and then we can move on to the next section 16. Section 6 - 1 - 70% Of Your Wage: There you go. So for this section, I want to talk about putting 70% of your wage to your mortgage So you'll remember that a main part of this course critical part is setting your payments high, making them consistent and making them automatic. So how high? 70% now? I didn't accidentally say 5% or even 30%. I literally main 70%. This is what you should be aiming for now. Many other people just do whatever else does. And starting from now, what everyone else does should be this 70% when you think to yourself, you know, Oh, we should be paying off a loan quicker. I wonder how hard we should put it to. I want you to think 70% now when you look at your mortgage, your payments or your income statements, you should be thinking 70% of heart. This is dying to get through to you now. 70% is what you should be aiming for. So if you're here taking this course, then it's pretty clear you want to do something quite drastic and serious to pay off your mortgage in under 10 years and just consider this to May as me raising the bar. So I want to make quite clear that, you know, this is a serious point. This 70% is something that you should focus on. It should be part of this main critical thing that you're spending essentially all your time focusing on that means if you're an average Australian and your full time work off and there's two of you, your birth on average Australia. Now I know these figures will be Y off. If you're in America or a different country, I can't account for Waltham, so I'm just doing my arm. Obviously, different places have different salaries, and they are quite different expenses. So most things will change these examples adjusted to your own country. But to average earning people in Australia will earn the title of 140,000 total household income, so you should be aiming to have 70% of your after tax wage paying off your mortgage. So, using current Australian tax rates and all that information, let's just go through a quick example to see one of mates. So you've got Jack and Jill that each earned $70,000 a year. They each get this much tax given Australian tax rules, and at the end they end up with a combined total household income off $110,000. As I said, that might sound like a huge amount you if your, for example in America difficult is exchange rates. Things cost a lot more over here than in America. Sometimes food vehicles are a lot more expensive, so as a result we tend to get paid more. But you can, essentially by a very similar met of things in both countries. So with a total after tax income off $110,000 imagine we have a mortgage at $400,000.5.5 percentage points off interest if they were to try and calculate how much their mortgage payment should be. You know, as I said, how high is high relative thing that's different for each person. In this instance, you take your total after tax incomes are 110,900 times of by 70% and you get 77,000 or just shy of $3000 per fortnight. Now, as I keep saying, the above numbers will change depending on what country you're in. But if you were to hit that 70% rate if you were toe pump almost $3000 a fortnight into your mortgage, that exact mortgage $400,000 you would pay that off in six years. Now, this is a course about paying off your mortgage in under 10 years. And quite frankly, six years is very impressive. Viewer to power. 400,000 or mortgage in six years. That's an excellent result. So along with the critical things that were mentioned before is how to properly kill any mortgage fast. This is how you do it. This is how you absolutely just destroy a mortgage in a few years and then be done with it . Get on with the rest of your life. So, given this quick example, are minority here A lot of people thinking, you know, wow, that is a huge amount of money. You $3000 a fortnight. That's a large amount of money. I'm not gonna be out do that. I can hear people thinking that saying that dismissing this, you know, course, just because of that single reason and the seeming you don't have any other debts. Actually, I reckon it's quite possible we certainly did it. I know of a number of other people that have done it, and a lot of people that I've written and explain this premise to over the years have also done it. So. Most people do have some debts, though, and depending on the interest of those debts, you might want to deal with them before paying off your mortgage. So, for example, if you have a credit card debt that's got 20 or 30% interest rates on it, you'll definitely want to focus on that first. Before you start plowing all your money into your mortgage, get rid of that high interest debt first that makes the most sense and then come back and focus on it. You can do both at the same time, you can put 50% towards the credit card and 20% of your wage towards the mortgage. But I'll leave that up to you to decide we're gonna go with the case of assuming that you don't have any other debts that time. You do, even in this scenario that even if you don't have any other debts sucking away your money 70% and still seem like quite a large number. But I want to also make sure that you understand. It is also meant to be a target. Now, if you're not there yet, that's fine. Obviously, you just started. You're gonna be there right now, but it's something toe aim for, as per the strategy that will be explaining later on. It's also a good kick in the ass, quite frankly, to get people to wake up and go Look, you know, if you want toe, really focus on paying off your mortgage in under 10 years, you have to do something special. This is that something special. You can't get the same results by saving 5% or even 10%. A lot of people, when they're asked you, how about you saving for your retirement? Or how much is a huge amount that you can say they might say, 30% or 5% or 10%? It's not going to get you to that sub 10 year frame. You have to dedicate a vast amount of your fortune to this task, and you should be thinking off the target of 70% so if you're in debt with a mortgage of 400,000 or even 200,000 again, you're not rich. So you may think you are with a big fancy house that you know own and paying off a mortgage on, but it doesn't actually belong to you. You've got a kind of remind yourself of this every now and again because you should not be planning on buying cars, re furnishing your house every year. You know, installing kitchens, buying all these amazing fancy things because you are in debt and you need to act accordingly and quite hilarious. And other. Favorite writer of mine is called Mr Money Mustache, and there's a resource linked for this below. But he puts your debt as an emergency, and his response to it is quite hilarious and quite appropriate that there's essentially a cloud of bees just covering you. 24 7 steam you what? Every individual point. This is how you should be reacting to this huge dead of having a huge mortgage or review it . That's a very immediate and dangerous situation to be in. You want to get rid of that as soon as possible and to do that you wanna dedicate 70% or a huge percentage of your income to getting rid of that, you know, bunch of basil steam you all over your body. Sorry, if you think it's extreme to save 70% and it's impossible to do it. I will also say that there's other people that are saving more. We certainly say more now, and you can even get up to 80%. That starts to get quite extreme, but other people do. You do it, Eric and 70% represent represents a fantastic target. And even though you might not be there after one month or six months, you should still aim Teoh. Eventually get to that 70% and slowly work your way up to it. So join me in the next lecture as we talk more about getting to 70% 17. Section 6 - 2 - Getting To 70%: ago. Welcome to this section, which is on getting to 70%. So now that I have your attention and your where that you should really be paying a lot more towards your mortgage than you might be, you might ask, How do you actually get to this 70% number? Now, for our average couple above, this means living off roughly $33,000 a year now to you. That may or may not sound like a lot of money. And, unfortunately, going through a huge list of every autumn ized thing, how to make a loss? Tom Wolfe Ergo is a bit dry and boring. So in the following sections, I do cover how to reduce expenses, and I go into a lot more detail there. However, for now, all I would like to do is simply just turn on that light bulb. So just really lock that in your mind that you should be looking at 70% of your after tax wage should be going towards your mortgage, and you should be living off roughly 30% or so. The remaining. As I said, 70% is a target, so obviously that ratio will very as you go. As you get more efficient, your expenses will go down getting closer and closer to that 30% while your percentage that you're pushing towards your mortgage will increase up towards that 70%. So also cover a major shift in how you should be thinking about your expenses in those in that later section on. This will make it a lot easier to crush those expenses down to that 30% mark, and too often people especially first home or is like we were in 2000 and nine. They're told of this magical 30% rule, and that usually goes along lines of something like your loan repayments shouldn't be any more than roughly 30% of your income. Otherwise, you might not be able to pay the debt off safely. So what they're talking about here is that after tax, you shouldn't be paying any more than 30% towards your mortgage. If your mortgage is sky high and you're paying off a $1,000,000 loan, those were payments will represent a certain percentage of your after tax wage. They may be 50% 80%. Whatever it is, their point is, if it's above 30%. Banks generally consider that to be mortgage stress, and it's just generally not a good situation to be put in. And this is actually quite a good idea. It's quite good of us. You want to actually be tolerant to things like Give you a to lose your job. You would have break your leg will be in a bad injury. These type of things can and do happen in life, and especially over such a long period of time, like a mortgage, it's even more likely to happen. And so it's good to be able to basically cut the loan repayments back from that 70% aggressive target all the way back to the minimal repayments that under 30% if the type of events happened. So whilst you will be paying more than 30% for hopefully most of your loans short life, you always want that option to be out of kind of back. It should be a mandatory thing that you're paying that America the bank should not be enforcing it or knew it should be you enforcing it upon yourself so that if something bad does happen, you can discount right back to paying the minimums, and there's not a huge issue. Actually, you're actually better off because you essentially paid off a lot of your mortgage in advance. And if it's very, very bad of your out for a full year or something like that, you can actually suspend mortgage payments in some cases. So it is very helpful now, when most people what most people aren't sure of something that often go to the experts instead of properly researching and figuring it out themselves. I quite off didn't do this as well. However, I've begun the habit of trying to do proper long term research when it comes to important things, like earning money or building a happier life or paying off a mortgage. And if you don't do this deep, deep research and instead just go with what the experts say, you might think that you know how much should I play? Should I pay more on my mortgage? Better make it higher. Once that hard remained, you might end up thinking that 30% is good enough, and that makes almost everyone just accept the of art, the advice and just never look at it again. They might sit there loan repayments to day percent and think they're doing fantastically. And to be quite frank, they usually are compared to most people who just pay the absolute bare minimum. For the 4 30 years. Someone paying it's 80% extra will be doing far better, obviously. But the fact that they never look at it again and never give it any more thought, is a pretty big issue. Now pay off your mortgage is a long term problem, and once you have the main repayment amount set up, you should be slightly increasing it over time. So you may start off with 30%. But as I said that, 70%. That's a target. You wanna be slowly pushing up on up over time, gradually building it up so that you simply don't notice that you're paying off Maura Maura of your mortgage faster and faster and faster. So to begin with, you might not be out to get that 70%. And to be quite frank, it's probably most likely you won't be able to get to 70% and that's all right, I'd say for most people, it would be extremely difficult for them. Teoh, right, out the gate straight up to 70% and live off 30%. So one of the main factors will be if you have any existing debts. As I said before, things like car loans, university debts, credit card bills or just you may just have a smaller than average salary that is also acceptable. However, you can easily find out how much you're currently putting towards your mortgage by just dividing your payments by your entire after tax income. So let's again go through another quick example in the next election. 18. Section 6 - 3 - A Quick Example: Hey, going and welcome to this quick example. So as above, they said, we're trying to figure out how much you're currently putting towards your mortgage on what percentage that is. So he is an example from our average couple above if they only paid $1400 a fortnight. So imagine the previous salaries that we mentioned before. But instead of paying it off in the unbelievable six years there instead and they're gonna be paying $1400 a four. Not so their mortgage repayments. It's $1400 a fortnight. Their after tax salary was 4265. So that was the total household salary said that $110,000 figure divided by 26. And then to get the percentage, we simply put one over the other and times it by 100 we get 32.8. So, as I said, you probably weren't started 70%. We certainly didn't. It's OK. You need to build up towards that target of 70%. And as you can see, this couple isn't starting at 70% either. They start at $1400 a fortnight and slowly work up to getting to that target of 70% which translated to about destroyed $3000 of four nights, or roughly doubling their payment overall. And it may take them six months biggie. But the point is to get to that target eventually. So you can do this same calculation with your own figures and possibly even start tracking this percentage as well over time. So as you increase your fortnightly repayments, your percentage figure is gonna go up, which is what you want, and you can put it in a spreadsheet and tracking at the time. And it's very helpful motivational tool as well to try and aim for maybe 40%. Your aim for to calculate what you're a payment needs to be to get to that 40% and then getting to the 40%. This shouldn't take you too long to do, but I do encourage you do it now to get your figure and over time as you pay off your debts . So, for instance, a of a Carlo, and eventually that loan, after three or four years gets fully paid off, you just keep that car, that money you're paying for the car loan can now go directly into your mortgage. That, of course, makes your payment go up, which makes your percentage savings rate go up. You know, as these things happen, you'll increase. Maybe your salary. You won't change anything. That extra bit of salary will just go straight towards your mortgage again, that percentage will go up as you get more efficient. All of these things will make this percentage number rise. And with it, so too will your repayment powers. Every time one of these things happened and your percentage razors, your fortnightly repayments will rise as well. You might start at 1400 thinker, 1518 100. Then up to 2000. Could you got a fantastic graze more and more more up to that 70% and each of those small debts is cleared or part of your life is made more efficient. You'll see that percentage growth, as I said, making your payments more powerful, and eventually you will have an incredible power to just automatically just kill that mortgage. Every single fortnight, you'll just be ripping huge chunks off. You just be throwing $3000 another $3000 at it and it will just be a fantastic sight to see . And if anyone else sees you doing it that I just think you're absolutely amazing putting 70% of your after tax wage to your mortgage, it's almost unheard off. And I know whenever a few banking people that perhaps we're reviewing our learn Nerdist it never quite amazed at its. It's definitely a fantastic gold to get to, and I hope by now you're always always thinking 70%. 19. Section 7 - 1 - The 5%: a guy, I'm welcome to a very important section, which is how to go about handling your expenses. So although that original critical rule is extremely important, it's all a bit of ah, mood point, unless you can alter your expenses to make use of it. So as outlined above, I always encourage you to pour up to 70% off your after tax wage into your mortgage. This is a target you should be aiming for and gradually increasing towards over the months or maybe even a year or two. And I'm also a firm believer of making sure that you're appropriately motivated to do this task. As I said under that first critical role, 2nd 1 is motivation, you know, even for a sub 10 year time frame to powerful mortgage. That's still 10 years that you've got to be motivated and enjoy doing this. Otherwise, you just gotta file. So you need to make sure you don't descend into a pit of misery and boredom while your plan plays out. While this 10 year goes on, a lot of people conformed to this trap if they cut their expenses too much, so like to devote at least 65%. As I said, thistle gradually grow up as you get closer and closer to 70% down to shoes. The example of 4 77 70% to begin with. So 65% might be fully devoted to paying off your mortgage for the 10 years that might take you, and you might want to spend that 5% on something else that you love. Now, if this means that you go the distance and never waiver from paying off your mortgage in that every single payment from 0 to 10 year mark, 65% goes towards your mortgage. That's fantastic. That's what you want. You want to be fully motivated and fully committed to doing this for the entire period that it takes. And there's no point in pushing that even further. That 70% if you're pushing yourself too far and you eventually give up after six months because you just you know your life is miserable. You don't have anything that you're spending your money on the you actually love. So it's because of this motivational need that we actually regularly spent a good chunk of that money on travel. So this is while we were paying off their mortgage will committing a huge amount of our income towards paying off a mortgage. But we still left a little slice to go on vacation to go on travel around the world on holidays because that's what we personally loved doing. And judging from most of the general population, I've found that I'm a bit We'd in the sense that I don't really drink alcohol. I also don't coffee, and I used to love soft drink. But I gave it up because it's not particularly grand for you. So now I essentially just drink water all the time. So a lot of those expenses we don't have my coffee bill was zero, for example, for the whole year. And what I do enjoy greatly is this travel. So while I don't drink coffee at soft drink and watch television and all these things that a lot of other people do instead, spend this money on travel and it's the one area where we splurged. As I said, while we're paying off a mortgage and we still do now that we've paid that off anything, why not? If you're going to spend your money on anything. It should really pay on something that actually makes you happy. Now, the only rule that I did set in the period where we will pay off that mortgage was just on women. I mean, you've still got toe set, some type of budget or limit on how much this special category is. Otherwise, it just keeps going up and hoping it gets out of control. It's not particularly good in any way, so let's have a look in the next lecture on how to save by actually spending money. 20. Section 7 - 2 - Spending To Save: All right now we're getting into the meat of things and spending to save. So this might seem a little strange that I'm teaching. You had a powerful mortgage and at the same time telling you to spend your money on things that aren't actually your mortgage, but there with me. This is actually a bit of, ah, psychological hat on spending money in order to stop yourself from getting cabin fever. So I originally adapted this rule from a fantastic book that's called your money or your life. And that's a very good start for anyone who's never done budgeting before is just new to the general finance scene, and in it they get into the idea off, going through your past, spending and sorting them into various categories. Now this is a very familiar one. Unite set up a budget so it into categories. It's quite a bit different to this. So to start with, you do have to sit. Sort your expenses into categories. I would probably encourage you to do it as minimally as possible so you don't need 100 different categories of every tiny little thing that you spend the money on. I'd probably say maybe 5 to 10 is quite acceptable. You know, Third call, you know, pits very, very base categories that have to be hugely detailed. You can do that later on. If you find you're enjoying it and it's working really well, so did I would say, 5 to 10 you could actually do for the full 10 years. A songs. It's working. But once you've put your expenses into these categories, the difference with your money or your life and the way that they do things is that they actually have you been sorted into two different categories. So you've got your for example, 10 different categories. They get you to sort into two different lots. So one of them on this side are the things that you really, really love, doing things that promote happy life and a genuinely good for you to do. You know this might be exercise, or it might even be watching television. If you really feeling love watching sports on the television that really, honestly makes you happy and you love doing that. That's perfectly fine. That's a splurge carrier at 5% top category. Everything else is stuff that you essentially don't care about you might not care about drinking coffee. I know a lot of people do, but as an example, I don't So for us, coffee was something quick, absolutely doing care about. And as a result, that category and all the other ones got absolutely cut to the bone. So you only focus on cutting the expenses that air in this second category that you don't care about. And if you feel that you know something like cable TV maybe doesn't actually prefer promote the life you want, you might still enjoy watching television. But maybe you don't want to watch as much television, so you might put it in this category that you essentially don't care about. And it's this way that your expenses slowly over time, morph into something where it actually encourages you to have maybe a healthier lost style or, at the very least, happy Amar star. And that also usually ends up reducing your spending as well, which brings about the great combination off saving money and actually making you happier. So you're cutting on all these expenses that you don't care about, which saves you a lot of money, Yet you're still spending on and possibly even spending mawr on these expenses that actually make your life better and make you happier. So you get happier and also save money. So that's a very good scenario and a very big win win, sort of type of thing. And almost all people wrongly believe that if you cut back on your expenses, you'll just be unhappy because they cut back on all expenses entirely. But this is actually incorrect. You know, it's the wrong way of doing it. You're only actually feel like you're cutting back on expenses if you start cutting back on those things that you actually enjoy, and that's why we separate them and leave them alone. We only focus on those expenses that you don't care about. And there's usually a large amount of this excess fat in most people's budgets that they couldn't really care less about. As I said, it's different for everyone, for our so it was, you know, there was things like television, random shopping trips, coffee, soft drinks, alcohol, excess computer and mobile phone purchases and stuff like that. I actually really love mobile phones and technology and all that sort of stuff when I was buying a sarin every a year or so because I just loved having the latest phone. But what I actually found after experimenting is that I could buy one every two years, maybe every three years, and still enjoy it just as much. But I essentially halved or or even mawr that particular budget category, so you get the opportunity to save money but still feel like you're spending on something that makes you happy. So, as I said, it's a very good result, and the end result is that you never actually feel deprived. A lot of people think that when you cut your expenses, you know, it's it's it's bad. You always end up feeling deprived board and, you know, like you're sacrificing all this stuff that's making you happy and wash Do this. You know what's the point of living life? If I can drink coffee every day because they're cutting on those expenses that truly make them happy? Drinking coffee really makes you happy, and you love doing it so much. Leave it continue drinking. That coffee, meanwhile, caught those expenses. You don't care about the absolute barn, so it's a win win situation. It's pretty straightforward to set up. And the only thing that you want to be careful off is having too many of these sort of splurge or 5% categories. I would recommend appropriate out two or so, maybe three in the maximum. Try to go for two. Um, what can end up happening is he might go. Oh, I love partying and love coffee. And I love traveling and I love buying clothes and bite and, you know, you end up not cutting anything. You have all these categories that you love and only like one or two things that you don't love and you don't end up saving. You think you do still have to prioritize things a little bit and go. Which ones do I love? Mawr, you know, do I liked partying and travelling the most? That's fine. Spend money on those two things on the drinking coffee and you know other things. You may still love doing them, but, you know, scale them back quite a bit. You are gonna have to make some sacrifices because, quite frankly, if you're paying off your mortgage in such a short period of time, the money does have to come from somewhere. But by having those at least two categories in terms of things, the love and still spending money on it, you should be our to go that full distance without feeling, you know, absolutely horribly deprived board and just miserable, frankly, still have those things that you love reduce everything else. So for us, our categories were travel and sort of the activity, hobbies or sports and things. For me, it was Jim. So those two things were things that made us very happy, made out large, better and more healthy. So we I didn't really mind how much we spent on them. They did have a general limit, as I said before, but we didn't really pay much attention to it. Whatever it cost. We spent the money, order. Everything kills. We come back to the absolute bone and tried to get as much money out of it as possible and then push all that to a mortgage. So I had to go about choosing. Your 5% will have a chat about in the next lecture 21. Section 7 - 3 - Choosing Your 5%: Okay, so now went into how to choose your 5% your categories that you love. So as I said, the best way to find out which categories you should maintain, or possibly even increase is to analyze all your expenses. Now you might already know that watching sports or, you know, cable TV is truly what makes you happy. That's fun. But the important point is that you should be decreasing or eliminating the other negative expenses at the same time. Because it's these savings that offset the other spending. It's no good just spending, you know, another $100 on cable television without first actually cutting back those other expenses. So what you should see overall, is the expenses that you don't care about will go away or drastically reduce Why almost favorite ones of the stay or maybe increase a little. So this is what it might sort of look like. A very simplified version you might have. This is beforehand, and this is after. So beforehand you might have these four expenses. Among other things. I didn't want to listen well out, and, you know you might have cable TV. It might be costing you $100 a month. You might have a couple of coffees every day. And, you know, you really love watching your sports really love drinking coffee. You also go shopping every now and again. Spend about $100 a month on it and maybe more. And you also have a magazine subscription. When you know, when you go through all your expenses, these are the ones who found. And as I said, you know, you love watching sports. You love drinking your coffee. Yeah, The two. You're not really that interested. I mean, obviously, people need clothes and stuff, but, you know, you're not really a huge clothing type person. So what you end up doing afterwards is you just cut these back. You completely eliminate them now. Clothing. You obviously still spend money sometimes on coiling. But you try and stop yourself from going at every single month. You find socks with holes in them. Fair enough. Go and buy some more socks. But don't go out for no particular reason just to record shopping. These other two you don't actually touch. So this is what I'm talking about in terms of cutting back on those expenses. You don't care about or the are particularly healthy for you and leaving along the ones two , maybe three categories that you actually do care about residency. In this example. Very simply, the expenses go from 240 to almost half. And what you'll find is that because you're still watching cable TV because you're still drinking your coffee every day, it won't actually feel that bad. It'll be like you're cheating. It'll be like, you know, you're still doing all these fun things that you'd love to do before, But somehow all this extra money is coming in. That's quite fantastic. And this, together with some general work on making your expenses just more efficient and streamlined , really goes a long way to pushing that savings right up to 70%. And this is why I was talking about it. Gradually increasing towards that target of 70% you warrant, start out at 70%. But as you go through each of your expenses and going, do I like this? No, no, really. Let's cut it back as far as possible. That bit of extra money goes towards your mortgage. That increases you'll percentage right, and you slowly get closer to that 70% as you go through agent everyone of your expenses. So many people are quite amazed at how much they can actually find by just having a casual look through their expenses. A lot of people have absolutely no idea what they spend on things and going through. And figuring out this and categorizing all your expenses doesn't actually have to be that hot. As I said, I'd probably recommend maybe 5 to 10 categories. That's if you do it manually. There's also other ways to do it, such as an online site called mint dot com. So I just mean dot com and this will actually linked to your account and then sort it all out automatically for you So it actually comes up with or your expenses, car food or that so stuff It goes back through your history, analyzes all your expenses and sort it all out for you. It's actually fantastic. It's a free service, and I know a lot of people would lock that because I don't like linking it to their account , and that's fine as well. For those type of people, you can log into your own bank account yourself and you'll have to sort through it manually . However, as I said, try and make it around five to maybe 10 or so categories, and you only have to do it for maybe two or three months or something like that. It doesn't have to go back to using using years or anything drastic like that. To start with, distort for a couple of months, get a general idea that can start you out. Ladder on. I'd probably recommend doing it for at least a year once you're a bit more experienced with it, because something's only crop up once a year. Like you know, rates feel house. Or maybe now you know any type of yearly bill or something, maybe servicing your car. You might do yearly, so it's a big expense that you do need to take account for. But it only happens once a year, not very frequently, so at least one year overall. But to start with, you can just do a couple of months instead of get the thing of it. And once you've got a list of your various categories and an idea of how much you're spending on each of them, you can sort of start to experiment with them as well, so you can take one or two categories and just cut them out for a month. So, for instance, if you're not quite sure whether or not you really enjoy drinking coffee, and I said for you what might be just something that you know, I don't mind it, but you're not really sure whether it's a category, love. Whether it's a category you don't care about, put it in this category that you don't care about. Cut it out for a month and just go for a month without drinking coffee and see, How does that make you feel? If you end up being, you know, miserable and missing it every single day, or whatever might bay, you've got your answer, you know, put it back in this category that means a lot to you, and you actually splurge on. That's fine. The point is to actually experiment with it and actually test to these things out each of your categories in each of your expenses, and you quickly learn what you can cut and what you don't care about. You know, for instance, you might do that coffee experiment. And after awake, you got Oh, yeah, I didn't even realize I wasn't spending any money on coffee. It's that irrelevant to you that you just completely forgotten about it. In that case, fantastic. Just cut it out completely. That's a huge expense that you just say. So all this leads to savings with no regrets or feelings off deprivation. And from there you can basically just celebrate, because once you've gone through all your different categories and found the two or three that you love that you continue to spend on, then you can focus on cutting all those other ones back to the absolute bare minimum or eliminating them completely canceling the cable TV or never spending money on coffee, or cancelling that magazine subscription or whatever it might be. And you'll still be feeling great, feeling happy, getting to spend all the things you love, like traveling or partying or whatever might be. So that is how you find your 5% you're split categories, and in the next section we will be talking about the overall strategy off paying off your mortgage 22. Section 8 - 1 - Why You Need A Strategy: Hey, and now we're getting into the main main section off the course, which is the overall strategy site presidency. You need a strategy to get through all the crap out there. It may seem a bit sort of overkill, tohave an entire strategy laid out just for paying off your mortgage, Billy. But pay off your mortgage isn't exactly a small thing, especially if you're trying to do it in under 10 years and you can stick it in the sand. You can pretend that it's not a big deal. A lot of people do this. A lot of people. As I said, I think it's a very negative thing, Depressed by how much interest they're paying, they don't think they can do anything. Teoh beat the banks or to get rid of it quicker so they just push it out of their mind. They focus on something else. They're fun, lost their having whatever it is and they just completely ignore it, which is a very big mistake. As far as I'm concerned, Uh, your mortgage is pretty much the biggest debt you'll ever or and because of this it carries with it the biggest punishment that you will probably never get financially. Hopefully, this punishment comes in the form of interest. And logically, it should be in everyone's interest to minimize this punishment. This interest and so logically you would think everyone should be focusing on their mortgage as much as possible. But not everyone's logical. A lot of emotion is involved. As I said, they assigned negative emotions to it. They feel like they can't do anything about it depressing. They just ignore. And when you put things in your life in context, your mortgage is pretty much a giant elephant that's just constantly in your life's away. So you might want to go out and party and have a fantastic vacation. But you've got the mortgage repayments that you've gotta make. You might want to do this fun, fantastic new hobby that you know it costs a little bit of money, but you can't because you've got those mortgage repayments to make. It's just this big often that just sit in your life gets in the way. Every kind of ignores it. No one mentions it, but it's always there getting in your way and my heart is that with this chapter in the section that will not only give you a solid, workable strategy to actually move forward, but it will also stop you from just wasting your time. So all those red hours in this picture up here so you don't want to be jumping for one thing to the other, trying this finding it's not working, trying this other thing find that's also not working, you know, finding this thing. Oh, that planet does work. But now it's pushing you in this direction and being oil the place you want something that you can just cut straight through and go straight to the chase. This is why I've set up this strategy. And if I had this strategy when we started our mortgage, as I said before, I reckon we could have finished it in about five years instead of 6 6.5 That it took us and you know, is how much interest that would have saved us. I probably could calculate it, but I don't really want to because it's in the past. I can't do anything about it, and it would probably just be depressing. So there's two reasons that many. There aren't many steps to this strategy as well. Like all things, I sort of like to keep things simple. But the main one is that when everything is considered and bold right down to it on, you know, you look at all the things that you could possibly do. There's only a few major components that are really critical as before in that list that I gave you of the things that are critical things that are not. There's not that many steps in the things that a critical part. So that's one of the reasons why it's quite simple. Many of the other things don't really make such a difference. Is paying off? You know, hundreds of thousands of dollars worth of interest. They don't make a difference, but it's not that much. And as I said, I like to keep things simple. So just in case you're not aware this isn't actually a plan, this is a strategy. They are different. A lot of people, just a shoe. Those two things of the same, they are not. Send the next chapter. All briefly cover the differences between a plan and strategy 23. Section 8 - 2 - The Difference Between A Plan And A Strategy: Okay, so we're just going into a quick bit of definitions here to let you know the difference between a plan and a strategy and the reason that this is a overall strategy and a plan. So our plan is usually a list of steps taken to accomplish a goal. So plans a very concrete in nature. They don't allow any deviations or changes, you know, plan A that you have fails to. Some reason you don't change Plan A or something. You move on to Plan B, which goes to a different route. So it's quite a bit different to a strategy. And they usually made up off instruction lists such as, you know, in Plant A Do task A and then do Task Bay and then do tar. See, this is what our plan is. A strategy, on the other hand, is much bigger than an individual plan. The strategy is very flexible and is open for interpretation. It could be slightly changed or altered, and it often has multiple paths to the same goal, allowing for things to go wrong. So a large number of people that regulate succeed in life do so because they use strategies and not planning. So what can often happen his life in life is it. If your goal is to, for instance, become a millionaire, go for a lot of people, you have your goal. At the end, you started to stop, and some people just have a plan. So they have one route to get to be a millionaire and in life things, as I'm sure you're aware, can often be wrong. And it might destroy that plan for one reason or another. They don't end up making it to that goal. A lot of successful people instead have an overall strategy that's made up of lots of different plants, lots of different paths that make it to that same goal. And they might be doing these or at the same time, they might be taking all four parts at the same time, or they might be taking one part. But when it fails, they quickly jump onto the second path and continue on, and in this way they're more likely statistically to get to their end goal and actually succeed because they haven't overall strategy and not just a single path that is very fragile and broken. They don't get to go. So it's my hope that by laying down a relatively broad strategy for this that the majority off new readers and listeners will easily be able to adjust and mold it into something that works for you. I usually like to give actionable steps and do this, do that etcetera, because it helps people, and it's not more clearer in things. But I could never actually give step by step instructions or plan to every single person. In every single scenario in every single country. It's just impossible. Sorry. Instead, I'll go into specific examples later on in the course. But for now, I just want to take a very high level approach and outline the general strategy off role. So let's move into the next lecture and have a look at the strategy. 24. Section 8 - 3 - 1 - The Official Strategy Explained: Okay, so now we're going to get into the actual heart of it. The actual strategy behind how to pay off your mortgage early. Now that I've explained a lengthy ideas and reasons behind things, I can actually go through the strategy. And hopefully it will make a lot more sense to you than just laying this out to you. Initially said to give you a brief overview, we have these four steps that I'll be going through individually. First is to set up your reality, set up your mortgage, set up your expenses and repayments, and then finally push past 7%. Sorry. Let's get on to explaining it. The 1st 1 is setting up your reality, so sounds like a bit of a weed. First step, you know, setting up your reality. Does that mean it turns out this is actually the most relevant and serious one to do, and even more serious than actually paying your repayments, which begin, might sound a bit strange, but with me, so your brain actually is pretty damn powerful. And one of the biggest powers that it has is actually shaping reality for you. Now what you see in the world and what actually happens. Iran you is largely irrelevant because it's actually how you interpret this, and it's been proven time and time again in numerous psychological studies around the world . It's also pretty normal. When you think about it, you and I will actually have different opinions of the same things. You know, if someone does some action and you ask 10 different people, what did you think of that action? You'll probably get 10 different opinions now. Interpret that same single action, Tim different ways because each of those people have 10 different realities and histories of what they've been through in their life. So it's quite a logical thing when you actually explain it, and generally it comes down to you don't actually see the world. What you actually see gets filtered all the way through your personality. What happened in your past, your prior experiences, all those sorts of things shape how you see that actual fact in the real world and stop and have a bit of a think about that, because it sounds quite obvious and straightforward, but actually has pretty profound results when you dig deep up. For example, a serious gambler might in reality destroyed their entire life as well as their family's lives, by gambling away their life savings, getting them into horrible debt, not telling them all these horrible things. But in their actual mind, there isn't anything actually wrong. You know, they don't see anything that bad. They often honestly and truly believe that they're fully in control off their gambling habits and that they're handling the situation fine. And this happens time and time again for many different scenarios, not just gambling. But they believe that their habit isn't anything to worry about and that it's actually, you know, quite normal to go on gambling. And you know, what's the problem with it? And this is how powerful sort of shaping your own reality can be. Your mind defines reality, and reality shapes your views, your warrant, your needs, your goals. And if you don't think there's anything wrong with paying off a mortgage over 30 years, then you'll never actually do anything about it. This is how powerful it is, just like the gambler. He doesn't think there's anything wrong with gambling away and destroying lives and all that sort of stuff. A lot of people don't think there's anything wrong with paying off a mortgage over 30 years . You know what's wrong with that? They don't see that $400,000 that they're paying extra to the bank. They're not just paying off a 400 dozen door house. They're actually paying often $800,000 house and loan package. And they didn't see anything wrong with this. And because of that, they will never investigated. Don't never do any research on Earth Day weren't trying paid in quick up. Just drift along, ignoring it, thinking that that's what everyone else does. And this section is about setting up your personal reality, because without doing this, you're likely to just fail and ignore it and not take it very seriously either. So let's start by getting your thoughts in mind on the right track. You'll want to be very aware of what's commonly referred to as mental barriers. Now these are mental walls that you throw up without even noticing it, and they stop you immediately from trying. This whole strategy that old be explained, set out physical things thes are mental barriers, and but they do have reasons and problems that are actually really to you or to other people, and they kind of let you off the hook. So when I say something like before, when I mentioned 70% of your wage should go to your mortgage, I'm pretty sure in your mind a mental barrier automatically went up and it might have sounded something like, You know, this won't work for us because we have Children. Or, you know, that average salary that I gave us an example was what A above what I make. So you know, this whole thing is crap. It's a a mental barrier that basically let you off the hook. You don't even try to think it stops you immediately from even trying this thing, you know, it stops you from even trying toe approach, getting 70% of your wage into your mortgage. Other things might be. I like to actually have fun and, you know, scrimping and saving to so I can pay off a house a few years earlier is pointless. All these type of things, our mental barriers, they stop you instantly from doing anything. They let you off the hook, and they just automatically come up in your head without you realising it on? A lot of these things are based in your history, your personal past. You know, perhaps your parents were the richest people, and your early childhood or your childhood childhood or your whole childhood perhaps, was very modest, and your parents had to scrimp and say for a lot of money. And, you know, it was very you didn't have a lot of money to spend, and that shapes your reality now as an adult. And so when I say I put 70% of your mortgage, your wage to your mortgage that manifests itself is a mental barrier, saying, I like to actually have fun and not scrimp and save because it makes you remember your childhood and how bad it was to script in sight. And even though, as I explained earlier, that's not what actually happens. You do still spend money on the things you love. You still cut expenses, and you actually enjoy it. You get that win win scenario. That's the actual reality over. But a mental barrier will pop up and stop you from even trying to do that type of experiment with your life, and they're very detrimental in this way. So this is your brain and your preconceptions shaping your reality and dictating to you what you will and weren't dirt. And does it matter that, you know, maths has proved that you can finish your mortgage quickly even if you have kids of written a lot about it before. And I've had examples of previous people that I've helped actually do it. Of course, that doesn't matter, though, because you've already made up your mind. You vory decided that it can't be done as part of this mental barrier that stops you immediately. And this is why you need to set up your reality now to be clear. I'm not saying these aren't riel barriers. Even though they are mental barriers, not physical barriers. They still are real to you. I mean, they are very, very real things and something like wanting to actually have fun could come from seeing your parents, As I said, scrimp and save their whole lives and being miserable because of it, it might seriously scare you. You may very well be scared that of having to save all this money and putting it towards your mortgage, that you have to go back to that life of being miserable and not having any money. So these barriers are actually really, and they are what stopped a lot of people from paying off their mortgage and during many other things in their life. The thing is, though, that as intelligent and as logical people, we should not let these fees and these barriers stop us from, you know, gaining financial stability and enjoying life. And you may believe you may honestly believe that you can't ever possibly put 70% of your after tax wage to your mortgage without living like a poor person and suffering immensely and going back to that chart hood of scrimping and saving or whatever my day. But the fact is that countless people do it willingly, and they actually prefer it over spending money. Now you might not have heard of them, but Mr Money moustache dot com and Jacob from early retirement extreme dot com. If you gave them $10 million each, they're both already financially retired. So if you gave them another $10 million they wouldn't actually change how they live one bit . They probably continue doing exactly what they're already doing, which is spending very little money on their expenses and alive. So this is why the first stage off this strategy is actually to set up your reality. And we want to set it up not to my preferences or anyone else's preferences either, but to your specific preferences where going to change your own reality and thinking so that it's in alignment with a specific financial plan that you come up with. And this is very different to those tips and sort of two minutes advice type articles that , you see they don't generally have a full overall strategy. And I certainly don't take into account your own personal mental barriers that can stop you from it. They might suggest an idea the mental barrier might go up. You won't even tried it immediately stop you from doing it. And the article is essentially useless. So what are your goals in life now? It's okay to not have thought about this before. Many people don't, but the point is, you will likely have certain things that you want to achieve in your life. You know, important things. They might be things like starting a family in five years or being free of all debts, for example, including your mortgage within 10 years. So whatever it might be, this serious goal should also be related to paying off your mortgage. But doesn't have to be the only thing you could say. I want to pay off my mortgage so that then we can start having Children in five years old, have one of my bit now through calculations and use cases. I think that people, they even have an average salary can, you know with proper discipline and following this strategy, get their mortgage debt dealt with in far shorter time frames than they mostly usually think often certainly the normal 30 years that most people talk about and below. Here are some suggested timeframes for your goal. As I said, I like to give you real life examples to help you craft your and go. I can't give you your gold personally, but this is to help. So we have by single people and couples as well Asan covering birth scenarios here, and we have a 300,000 on the loan amount added interest rate off 5%. So I've made these quite conservative for the fact that $300,000 for alone is usually considered quite high in Australia. It's actually quite average, unfortunately for us, but elsewhere in the world, it's considered quite high. And certainly the 5% interest rate is also quite high as well. So if you have a larger learn than obviously, these numbers here will increase by bit. But if it's lower than 300,000 noid interest raters law, then they will be quite conservative and actually be less than what I'm saying here. So start with Imagine you're a single person earning less than $70,000. You should be out of payoff your mortgage within 15 or so years. This is pretty much the base case that you're a single person with a lower than average for Australian income, and it will probably take you about 15 or more years, not particularly grand by the soon as you reach the average, which is around 70. You're looking at about 11 to 13 years, and as your income increases over the years, you can start to get more serious terms off 6 to 7. Now, for most people, they will be a couple living in a house together and they will have a joint income. If you're joint, income is less than 140,000 which is quite common. You will want to go of around 7 to 8 years, or even just the under 10 years, that this course is about when you start getting even higher salaries than the average in Australia's A 140 or even above 180. You're looking at really quite ridiculous loan terms. So 3 to 4 years, 5 to 6 years for $300,000 you can just destroy it in 3 to 4 years quite easily using this strategy. So once you have your goal, say toe, have the house paid off in 10 years, then you need to start money how to actually break down any mental barriers that getting in the way of this goal that you've made for yourself. And the best way to do this, I've found, is to actually acknowledge the barrier. So good way is to just simply write it down and then try whatever it is that you believe to be impossible anyway, so you want to give it at least a month, possibly upwards of three months, depending on the type of thing you're looking at type of barrier. And then once you've gone through those 123 months, then making informed decision after you have actually done this testing so again. Another example. Say you have the mental barrier that in order to pay off your mortgage quicker, you have to live a poor and boring life. See after cover your expenses to the bone and just live boring. And you don't wanna do that side. That mental barrier instantly goes up and stopped you from wanting to pay off your mortgage . So the first thing is to actually admit that this is just your opinion at a mental viewpoint that you have and you ignored your by writing this down. So Justus I have here. The next step is to acknowledge that, you know, you might be correct about this. It might not just be a mental barrier might be a correct mental barrier, but the only way to tell that is to actually go and test it. So for 1 to 2 months, you commit 70% of your after tax wage and just see what happens, you know, test it find out what actually happens when you do this. And the absolute worst case is that after two months, you've paid off more of your mortgage and you've learned whether or not you were right. You've learned whether or not this barrier is actually truly riel, or if it's just this fake mental barrier that you have from some previous aspect of your life. And chances are, though, that you'll find that it's, you know, actually gonna work, that you actually find that a more spartan existence and not having as many things going on and paying for so many things and doing so many things is actually up lifting, relaxing to you as well as the fact that you're probably paying off your mortgage a lot quicker. So try and question your reality or your automatic believes your mental barriers and just make sure that they are actually really, and not just something that's been absorbed over time from your parents or other things that greatly influence your life. That's also good to think about what you or particularly your parents always do always have thought or believed. These the most common things that come up is mental barriers all the time and then try and test them so you might come up with four or five things that you think are mental barriers for you. Go through each one of them and test them. You might think that having Children has to make you poor. It's a very common thing. You might believe that in order to create a budget, you need to be a professional financial advisor. You have to have all that training and knowledge before you even start to make a financial budget going to try and make a budget on your You might just assume that because you're different than most people, that this strategy won't work for you and the barrier goes up and you instantly don't even try it. You could believe that. You've that, you know, having a food bill of $100 a week is absolutely impossible or that never watching TV would people first thing in the world. And for some people, I know they honestly do believe that the fact is, you might be right. I'm not saying any of these are wrong, but at least give it a try before you, you know, completely dismiss it for absolutely no reason. You want to be absolutely sure that it's 100% true and correct. So I have a very specific goal in mind. Write it down and always question these assumptions and mental barriers. You know, if you read something or going through this course and something just instantly goes, are never do that. That's where you want to actually identify that. That's a mental barrier and you will not try and test it and make sure that it really is absolutely 100% true and correct before you just go. One assumed that you know, I could never do that or that doesn't apply to me or no, that's ridiculous. So really have a look at it. So next up, we're gonna be looking into setting up the mortgage part of this 25. Section 8 - 3 - 2 - The Official Strategy Explained: So now we're looking at Part two off this overall strategy, which is setting up the mortgage. So Dix this section can involve a lot of messing around with banks and working at the best rates and interests. And so, as suggested, your often, far better going for a simpler, no frills style mortgage plan, one that doesn't offset account, fancy credit cards or expensive fees or, you know, all that sort of stuff. They often called the wealth packages as well anything special that gives you rewards. All those type of things come with additional costs that add to the mortgage on as a general rule, when companies just in general make their products more and more complicated, it takes longer, longer to explain. And they have all these different facets and points and issues and Maura more complicated. Generally, it's you the customer that's actually losing. Yet they have done all their sums and made sure that, you know they're still making money and stuff. They're making money off you, So the base no froze plan will still make them a little bit of money, but probably not as much as those high a t. It plans at a more premium and have the higher, more complicated features. So that's usually better off to go with those lower plants. So that being said, some wealth packages can still suit certain families or lifestyles very well. I'd never be so arrogant to suggest that one size fits everyone. Some people really enjoy their credit cards, and they get a lot of other benefits and extras out of them that far outweigh the small. You know, 23 $400 costs that the banks sometimes ad for them. And as I said before, you might try this wealth package fund that it's failing not doing you too well, costing you too much money and then readjust back down to the no frills line. Instead, you birth your birth methods still end up with the same goal you might have had feel around for a bit. We still end up at the same point, given your goal of wanting to pay off the loan as quickly as possible. There's a few things you should look out for and prioritize, though, when you're setting up your mortgage and when when you're shifting over to a new mortgage. Generally, the two most important factors are to be ruthless on the interest rate that you're getting and to also make sure that the loan allows unlimited extra pavement on limited extra repayments. So if you achieve just these two things, everything else will probably not matter as much. And it will work very well with this overall strategy. So any loan that doesn't allay to make unlimited extra payments should, I think, just essentially Big Nord. The whole point of this course is to pay or loan off extremely quickly, and that means that you'll be having much higher repayments. And basically, if they don't let you do unlimited repayments, that probably gonna have a cap on out somewhere, maybe charge you some fees. It's just not good. It'll limit your ability to pass off the mortgage in such a short time. And, uh, you should always learn how to negotiate when a grain on the loan interest rate as well so come armed with facts and figures. You know, maybe some printouts from their competitors websites saying how much their interest rates are versus how much the ones you're negotiating with so you can try and get it as low as possible. and again, negotiating is sort of outside the scope of discourse. It's probably a course in of itself, and there's many other free sources on the Internet that you can get information from for it. But negotiation is one of those things that everyone does so so badly that even if you just practice for one or two hours, it'll probably just raise you up so much higher above everyone else that you have just a huge event. So do consider practicing a bit talking out loud, doing a bit of your own negotiation, and finding those facts and figures to sort of give you something to actually negotiate with, give you a bit of leverage for it. Now, when agreeing on the interest rate, don't let them sort of go on about how it's only one off. You know that many features that we offer and try and distract you away from talking about the interest rate interest rate is money. It's your money, and even tiny little fractions can translate into thousands and thousands and thousands of dollars over the the long term and be open to going to other institutions like credit unions or smaller, more unknown banks. These can often give you better rates to get your business than the bigger banks out there . And although there is smaller banks or the credit unions might demand a higher L V R, which is loan to value ratio. So how much your loan is, say, $300,000 to how much deposit you have seen might only have a $10,000 deposit. The loan toe value ratio is quite high. There you $10,000 to $300,000 raise. If you have 100,000 deposit for 300,000 alone, it's much smaller, and you might only be able to access these credit unions or small things once you've built up a sizeable deposit. Or once you've paid off, a little bit of your mortgage has been refinanced to a different one. But do keep an eye on them and they're quite good to again give you a bit of leverage. So the other thing you can do is use comparison websites to seek out Linda's that you might know otherwise of knowing about and do also be sure to read all the terms and conditions. As always, you know, these are banks. After all, they will have terms and conditions. Make sure you read them. There's also a lot of online banks in Australia. We have you bank and loans dot com dot au who give fantastic rates. Now these can be a bit tricky to set up initially because they are online, but once they're actually set up, they work very, very well. I mean, you don't generally interact with your mortgage bank very often. I want to talk self initially, so you may get a little bit of a tricky set up period, but for the rest of the line, you get fantastic lower rates. Sorry. Whilst many will drone on about the interest rate and it not being the most important thing again, I just want to give you an example. Here it is for most of the negotiation, the most critical part when you're setting up your mortgage. So, for again, a $300,000 loan at 6% versus 5%. So this is just a 1% difference in your mortgage. So this might be the difference between, say, an online Internet bank and a major bank or credit union or major bank or even two major banks that just have different plans features offsets or anything like that. It's only a 1% different. We're talking difference we're talking about here. That's the difference between paying $1500 a month in interest and $1250 a month every month for the life of your loan. So that's $3000 a year extra for absolutely no reason just because you didn't bother to negotiate or shop around or do anything particularly fancy. So take your time. And, as I said, I can't stress is enough loan to negotiate. Just because you go in there and their ads, as it's at 5% doesn't mean you have to accept that. Negotiate off some what type of a deal they can do. Keep on pushing them to reduce it even half a percent as much as you can so you can spend a lot of time researching and comparing and reading pdf's and talking to mortgage burgers and building spreadsheets to compare all the different options that all the different banks and all the different plans have. Know what sort of stuff, But, you know, if you had to spend two weeks researching how different lines work. Talking to mortgage brokers, finding out what their opinion years, given your specific goals, that financial situations, learning and negotiate a better right. All of that will give you a huge, huge lead over pretty much 99% of anyone else that walks into a bank trying to look for a loan. On the other hand, if you spend two weeks trying to figure out the ins and outs off the different wealth packages and there's a lot and the credit cards and how that'll suit you best and all that sort of stuff, that's probably not as good uses your time. So I mean, sure, you might say that it would slightly different wealth packages, but the other research the you know, going out there looking at all their competitors, bring that information in learning happen, negotiate and then negotiating those different rights with the best banks and going to multiple different banks as well, pitting them against each other. That will most likely cut down your interest rate much, much more than just looking at all the different wealth packages. So prioritize your time and what you investigate and make sure practice your negotiation skills again. I know it sounds a bit strange sometimes to a lot of people. Toe practice negotiating. But sit there, talk with your partner, talk with one of your friends and have then be the sales person and you try and try to negotiate them down. They'll come up with your things. Be like, Oh, why should I care about you? You're just a customer with outrageous 5%. We're not moving. You need to have an answer to that. You need to pull out a piece of paper and say, Look, your competitors at 3% I want 3% to. Otherwise I'm going to go to that competitive. These are taught to things that you need to practice and even just one or two hours. Doing this with one or two hours of researching different rights can save you, as I said, $3000 a year, thousands of doors over many, many, many years. So achieve these two things and everything else is just icing on the cake. Save your truly unfamiliar with how it all works. I'd highly recommend a mortgage broker. They are quite fantastic. Don't let them tell you what to do exactly. You should always be in control. Simply sort of used them as a fountain of knowledge. You need to do that research beforehand again, and then come to them with that information and see what they say. So you should have a loan at the end of all this that you can easily and aggressively paid in with any penalties. And this streamlined mortgage can be further investigated. Find change later on. So set up these two things first, and then focus on the rest, like Iran. So now we're gonna go into the next step. 26. Section 8 - 3 - 3 - The Official Strategy Explained: so welcome to Step three, which is setting up your expenses and your payments. Now there's many views in this area. Some people think that budgets are sexy dot com Others just like them and spend hours fine tuning them in Google spreadsheets or excel right them lots. Others are happy to do them and adhere to them. But don't really sort of care that much for them. And others still just absolutely hate them and refuse to do them at all. I'm personally a big fan of the very the very least being aware of actually what you're spending and, you know, tracking it just a little bit. The human brain doesn't really get very good at somewhat enviously tracking a large number of varying figures over long periods of time. You know, we're not computers. We can't remember thousands of different numbers over months and years and that sort of stuff. So it's a job for spreadsheets, and I think it's very handy. You don't have to love budgeting or even really be that strict with it. But do keep a semi to full detail list of your yearly expenses. As I said, these categories don't have to go one forever, and every day I have to have 100 off them. 5 to 10 will be sufficient just to sort of help you organize and prepare for your future. It's a fantastic thing to have. It will also enable you to put as much money towards your mortgage repayments as possible and still actually maintaining a stable amount of money in your personal accounts for just sort of everyday things like buy a cup of coffee and stuff. So although I can get caught quite complicated and it's different for each person, really at the end of it or just kind of boils down to this equation, So to figure out what your mortgage your payments should be, you take your after tax income and simply take away all your expenses. Everything else should go towards your mortgage repayments. And because it's such a simple equation here, this thing doesn't usually change that. Often. You may get a raise and it might go up. Might do aside. Incumbent might go up by generally. For most people, it stays quite stable. So you wanna work all your time onto this, so the more of this expenses that you can reduce the high art this turn becomes, and that's pretty much it. So obviously, to get that mortgage repayment number toe pop out, you're going to need Teoh. No, your after tax income, which is pretty easy for most people to find out how much they get paid each year. They know how much tax they get. Tax Each year you do attacks income statements. It's pretty easy to find out all that, but finding out your expenses and costs a little harder to find out. Um, in a later chapter, all introduced a spreadsheet that helps to track all your expenses and provides really detailed calculations on how much you can actually put towards your mortgage, so that will come in a later section. It also does this while still meeting or your expenses. So it essentially does this simple calculation for you automatically, so that will be late up, and the final step in this part is actually changing your mortgage repayments to this given amount. So this is done by collect. Contacting your bank or possibly done online is again. I'll explain, let up, and I'd advise doing it pretty much straight away. So many people went faced with the number that this calculation spits out in this spreadsheet that I'll show you later on. They don't really believe that it's possible that they can put that much money towards the mortgage. One of the biggest mistakes that we actually made in the early days was this exact mistake . So what we did is we slowly ramped up our payments. So we went from, you know, 2 2100 to 1200 on order. Normal now. While this wasn't a huge problem, it did mean that almost a full year we were paying a lot less than what we actually could have put towards that mortgage. Now, if you have a free redraw account, as I talked about before, or are adding the extra payments toe offset account as well, there's absolutely no downside to this, so you can just go away. You can go straight up to say, 2000 it says. You can put in just go straight from 1000 up to 2000 put that into your mortgage. So if you do end up putting in too much and the calculations off somewhat, then all you need to do is just take that little bit extra raid roared out of your mortgage or take it back out of the officer. There's no downside to doing this basically, and the other option is you can just do without so you can sort of rough it for that one month or one fortnight, whatever the payment cycle is. And because there's no harm doing this, you can just jump straight to absolutely killing your mortgage of much as you can straightaway without having that whole year period off, basically wasting a lot of time when you could have been fully killing it for that entire period. So this is one of the biggest mistakes that we make on Die Point we made. And so I point that out to you so that you can be aware of it as well. And one final note is that you're likely noticed a fairly decent mental barrier getting thrown up when the calculation actually tells you the amounts of when you enter all your details into the spreadsheet and it pops out the numbered and blow, saying, Put this much into your mortgage repayment each week. You know you might instantly see that barrier go up and just go. You know, can we really sort of afford that much? That seems like quite a lot of money. You might be very hesitant about doing it, but the answer is yes, yes, yes, you can start. Go on and do it. If you don't believe me, then test it. As I said, these mental barriers you need to test them. Try it out for two or three months. There's no downside provided you can always get that money back out through redraw the offset account. And just don't let your reality be dictated by your past experiences in your past. Thoughts about money. Take control and push forward. Jump straight to that $2000 or whatever the figure it is that spits out and try it. See how you go. I think you'll be pleasantly surprised. So next we'll get into the final step 27. Section 8 - 3 - 4 - The Official Strategy Explained: now in this final step, it is a bit more of an ongoing section two. This strategy, and that is to push past the 70% marks. As I said over the 1st 6 or 12 months, you'll be pushing up to this 70% and you may find that you want to stop that 70% that it's enough. You go off, live your life. Mortgage gets destroyed in the background, or good be may also want to try and push past 70%. So it's quite likely that when you do the above calculation in Step three, you won't really be rocking. That sort of 70% plus ratio that way certainly weren't rocking at the start by the the general of thumb is that if you're contributing anything more than 30% to your mortgage than your under mortgage stress, as I said before, you know this sort of talk off mortgage stress isn't really relevant because it's you implementing it. You can away scowl at up to 70% back to under 30%. It's not a enforced thing that your bank is enforcing on your enforcement on yourself. So bad times to happen. You've been away sky. What backs are that's not really sort of applicable. But more to the point, you shouldn't be held to these sort of lesser type examples of only putting 30% towards your mortgage. You want to do better than that. And also don't be sort of sad if you're not hitting 70% with that number that pops out at the bottom. That's as I said, a goal to get four to get to, and this section focuses on taking that number and doing everything he can to push up to it and passed it as time goes on. So for this, you could refinance your loan to make a cheaper. You could unplug that fridge, that sitting in the guards that no one of users sucks up a whole bunch of power. You could walk to the grocery store from now one instead of wasting money on, you know, driving there. You could stop wasting money on cable TV who had a cook instead of gang and buying food all the time. There's a 1,000,000 different things that used to dirt, and it's not hard to find fertile Blog's out there with all the different sort of tips and tricks, and this is what this part four off the strategy is about, that it's an ongoing part that you go through each of your expenses, find out how to optimize them as much as possible and find out these new tricks and your time and money is precious. You don't wanna waste it on buying useless crap that, you know, also wastes press it. Precious resource is so it spend it on something that will instead decrease your mortgage and see you out of debt sooner. So that's the other fantastic thing about the mortgage planning spreadsheet, which will be introducing later section. It tells you the exact date that you will be mortgage free. So I've personally found this very exciting and extremely good in terms of motivational thing to have explicit date. So this course is about paying off in under 10 years. This actually give you a date once you enter in or your information off the second of June , two years time or 10 years time or whatever, it might be able to tell you exactly when you'll actually be paying off your mortgage, and the other reason that it's fantastic is you can make comparisons like is having two cars instead of one really worth having to pay off the mortgage for another sixties instead of four, so you can chop and change your expenses. Have two cars and they removed one of them and see how that changes your loan end dates that may go from six years. You take away the car that goes up to four years, so you can say to yourself, You know, if we can manage to only spend $100 awake on food instead of our current $200 a week, it'll shave three months off her mortgage. Or if we can only drive one car, it'll save two years off our mortgage. These sorts of scenarios you could run very quickly with the spread shape. And it also is just a fantastic motivator for you to see what type of expenses you should be focusing on. And you might not make it all the way to 70% even after a full year. Generally, the lower that income you have, especially if you're a single person. The harder will be to get to this 70%. However, that doesn't mean you should give up and not be happy with your efforts, although I sort of tell you that aim for this 70% figure. It's by no means the bill on indoor. Just make sure that you're always trying to get to it and also make sure that those mental barriers aren't the things that are holding you back. So you unable to reach 70% because you have always just assumed having cable TV's must or did you actually go untested? Did you stop watching cable television for a month and see if it's really worth $100 a month to you? You know, it very well may be, and that's totally fine. Keep it as I said, Go on and cut something else. But make sure you're testing these things. So when you push towards 70% and then hopefully one day past, it always look not for the obvious things like, How can I decreased my power bill? Bet for the sort of unknown things you analyze away the expenses in your life and sort of really ask yourself, Is it worth having, you know, whatever it is that you're analyzing and why exactly you need it and then go and test it out. So this sort of identifying expense tested out and then make a decision on its a three step process off, going through each of your expenses and basically just categorizing them into that. Is it absolutely necessary, Or can I cut to the bone? Your And it's by doing this that over time and over many months and upto a year hood flick should only take you roughly around about a year to go through most of these expenses and everything that you will slowly increase that percentage, pushing further and further up towards 70% and then possibly one day past it. So that's the bulk off the strategy, and now I'll get into a few more final words about 28. Section 8 - 4 - Some Final Words: already, sir, Now that we've gone through the full four steps of the strategy, I just want to say a few final words. This strategy, as I said before, is very general, as strategies are meant to be, and it should be clear that this is pretty simple and adaptable to most people. I will go into Mawr examples later on, so don't be too worried if you're not 100% clear on all the date house. The most important thing is that now there is an official plan and strategy that you can just pick up and run with when you want to kill your mortgage. So if you're excited and want to get started, just focus on completing each of these sections one by 11 after the other and also know that you don't have to achieve absolute perfection in every single section before you move on. As I said, for example, of your categorizing your expenses, 5 to 10 is more than enough. You don't have to list every single one of them. You can only do five and then very finely and come back to it later and push that to 10 or 20 or even 100. Whatever you wish, get the main task of eight section completed. So setting up a specific goal and challenging your assumptions. Setting up your loan with a super low rape and super low SES keeping track of your expenses and your payment percentages and then pushing to 70%. And make sure you folks on these main goals, and then you can spend more time later on refining them and going through them in the next section will introduce the mortgage planning spread shoot. 29. Section 9 - 1 - The Spreadsheet: how you going? So now we're at Section nine, which is the spreadsheet. So you would have heard me mention the spreadsheet or the mortgage planning spreadsheet, possibly a number of times before, and now I would like to actually introduce it and get it into your hands. So this spreadsheet is grateful motivational purposes, and as I'm sure many will attest to, it can actually get a bit addictive as well. I know you want to pay off your mortgage early and very quickly, and you want a strategy that's actually proven toe work. You want something that's easy to follow. You want something that's simple to understand. It doesn't have a law, that financial mumbo jumbo crap, and I've worked on this for many years. It's something that I think should become the centerpiece in destroying that mortgage of yours and painted off super early. And the spreadsheet works with that main strategy that I was explaining before to help guide you through the full process of paying off your mortgage earlier. And the other thing it does is make sure you don't go too close to that deprivations and make sure that you don't cut your expenses and push too much money towards your mortgage. And so you end up, you know, eating noodles for the entire month of something like that. A lot of people associate this budgeting with a deprivation zone and sacrificing a huge amount. It's very horrible. This helps with that. So don't just browse over this document like it's a top 10 list or something that you just look out and throw away or something. This should become, as I said, your centerpiece. It's quite important, and it will take up a small amount of your time, probably about five, maybe 10 minutes, a month or so of your time. Not very much. But there is a bit of a learning curve. I will help with this by going through it, step by step to begin with. But also do remember, as we're going through the roof, the rewards I extremely worthwhile with this. So why you might be putting in, you know, five minutes a month or something? What you'll be getting out of that is actually better control over your finances. You'll be out of see them and know what's happening with your finances and know that your in control of them. You also get a specific in date for your mortgage that will greatly motivate you to pay off your mortgage even quicker. Says there's a very, very big interest and good point for asked when we were doing it. The spreadsheet actually gives you an exact day off when your mortgage will be paid off and tells you, you know, two years and four months, for instance, your mortgage will be paid off in, and the other great benefit to this is that you can actually see what it does when you remove some of your expenses so you can remove, for instance, a second cards. He had that fix your loan date. Maybe it halves that maybe it only takes off a few months, you know, but you can actually test those things. Also, I should note that it's primarily built for people living in Australia, so you can use it if you're in different parts of the world. Don't worry. It's just that the initial sort of income and expenses that have given as examples that are changeable in the document they might seem a bit high. If you don't live in Australia, they might seem low. Who knows? No. Just be aware that they're just examples placeholders for you to put your information in. Now the spreadsheet hasn't actually taken the multiple used to build, but the research of the ongoing testing that was done. The refinement, the you know, the ultimate creation off everything, all the knowledge for it has taken well over three years to put together. And throughout those years I've investigated dozens of various possibilities to cut down on mortgage terms. And that's one of the ways that I came up with that total list that we went through before . And once I found those ones that made the most impact. That's why kitten spreadsheets So it might seem a bit simple on the surface. But that's just really the honest truth coming through again that you need to hit those critical points. You can do all the other stuff as well, but they're not nearly as effective as doing those critical points. And thats why this document has been optimized for doing those critical points. So it's not a general spreadsheet that just tells you, you know, this is how much mortgages and hello it takes to pay it off this is constructed from the ground up to make sure that you're paying off your mortgage as quickly as possible. And it even includes a few psychological points as well. Sort of helped push you and get you in that right direction of paying it off even sooner. So let's have a look at it. So here we are, the mortgage planning spreadsheet. This is just a picture of it. The resource that you'll see connected to this video will give you a link to it. It is a Google spreadsheet so anyone can access. It is always your online. You don't actually need a Google account to access it. So even if you don't have one still click on that link, you'll be out of see it and downloaded, and from now on, it shall be known as just the spreadsheets. Let's go into how to get your own copy 30. Section 9 - 2 - Get Your Own Copy: All right. So how to get your own copy? First of all, it's very simple. You can just click this link, or you can click this link above here. Or you can click the link in the resource. As I said that I've attached to this section, and once you do, you'll be whisked away to our land off pleasant looking spreadsheets that are very similar to this. So they're super easy to personalize. Do you know it? Feed those of you that are a bit sort of unease e about entering in your personal financial details toe online spreadsheet. Do realize that this link leads you to a document that is read only you can actually into any information into it. And the reason for this is that you actually need to make a copy for yourself. Sir, this copy will be bound to your Google account if you have one. And as such, I or anyone else that accesses this link that I'm giving you one actually be out of see it . So I'll begin you on access to the link. You make a copy off it. It saves it as a brand new copy under your Google account, then you can start entering. Your details are in that you can see it. Only you can access it, so it's pretty easy to make a copy. You just open the spreadsheet from those things it filed and make a copy as seen below. So you open it up, get the farm, and you got into make a copy, and it'll pop up in a new window under your Google account. Do make sure you signed you first little signing button up the top, and that will give you your copy. So if you don't actually have a good go account as well, or you just I still don't like entering information online. That's, you know, in the cloud and lots of stuff that's totally fine as well. Hit the file and then download as buttons again. Go through the same thing, but instead of going toe, make a copy. You just go to this download as and it will pop out. I probably recommend the Excel version offered that you can also do open office if you don't have excelled as many different options. So, whichever one you want to do so or perfectly fine, they get yourself a copy of this, and then you can start filling it in and making it your own, which will cover in the next lecture. 31. Section 9 - 3 - Make It Your Own: Okay, so now that you've got your own copy in a new window or download and open in itself, whichever one you prefer, we can make it your own. So once you've got it open, as I said in a Google account or whatever, you can begin editing the actual field. Now these are specified by the orange instructions, and you should only be changing the blue fields. Go back up here, just quickly show you what I mean. Side these orange parts denote your instructions on which steps you're supposed to do. So first to this section, then step to then step threats. Very simple. As I said, step by step instructions describing exactly what you need to do in each section. You should be filling out these blue sections early, so leave all these are the ones alone. All these what's and greens and everything. Leave them alone. You and they need to fill in the blue one. So things like your name, your date of birth, you're income, etcetera. There's also talk tips over each one of them to give you even more specific help if you're a little confused about what each of these things are so lots of help. Lots of step by step instructions with it. You can go and fill out your personal information, your income and debt information, your mortgage information, interest rate and finally your expenses. Sorry as a final point when you feeling at your expenses. This is in a different tab at the bottom, so you may not have noticed, but down the bottom here in the spreadsheet, there will be multiple tabs on one of them will be in expenses tab. You want to not try and be 100% perfect. As I've said throughout this whole course, you don't have to have 100 different categories with 100 different expenses. And even though that I've listed some example want in the expenses tab, you don't even have to be 100% perfect on the actual expense. So do you spend $162 on cable television every month? I don't know. 150 years, 500 is probably even find. The greatest enemy of a good plan is the dream of a perfect plan. So you don't want to try and be an absolute perfectionist and spend alot your time trying to get it exactly right. Destroy and get most of the way. They're probably about 80% accurate and then revolt. You can come back later on and finish off that extra 20%. So even if you simply estimate the numbers just off the top of your head, it is better than doing absolutely nothing on the main focus should just be on getting the information in there to begin with. And then you can, As I said, Come back lighter, fix up that sort of 20%. So this with the spreadsheet, you will be able to update them. As you know, your life goes on. No, only do you not have to have the perfect, but things change. I mean, by changing expenses in our spreadsheet all the time. When things get updated, you might, you know, decide You actually don't need a haircut as often as you usually do, or you want to travel more. Your expenses will be constantly changing. So put them in there, try and get as much information as possible, and then sort of move on. Now, one of the biggest advantages off the spread shape is the ability to simulate what I call, what if scenarios. So what if scenario might be? How much sooner would we path the mortgage if we only had one? Tough. Now this is something that's very easy to do. Once you've got all your information in naming the spreadsheet and it tells you the you know in date for your mortgage, which is at the mortgage plan tab down the bottom, you can go back into your car expenses tab and just basically delete it. Just temporarily delayed it. Go back to the mortgage plan to have and have a look at your date. This all instantly tell you how much sooner you'll get your mortgage paid off if you only have one car or maybe no car it off. This is the way that you can do these quick simulations and discard. How much sooner would I pay off my mortgage if we didn't have cable television delayed cable television? Look at the new plan date. Maybe have saved 100 days. Maybe you've saved 1000 days, and then you can actually sort of view it and go. Is cable TV really worth having Teoh spend another 500 days paying off our mortgage. The answer might be no. The answer might be yes, it doesn't matter. But the ability feud actually run. These simulations, literally in seconds, is incredibly powerful. And it also makes you a lot more aware of your finances and your expenses and how much of a burden they really actually are to you. You know, you might think $100 a month is absolutely nothing. But when put in the context off your mortgage and how many extra days it's going to take for you to pay off your mortgage because of that one expense you might see in a different light and you might change your mind so we'll move on to Step three, which is reviewing your findings next. 32. Section 9 - 4 - Review Its Findings: All right, so now we're really getting into it, and you should have filled out all your expenses or your information. Got your copy of it, obviously. And then you can go to reviewing its findings. So once you've entered in ALS, the figures you can now have a look at the automatically calculated data and graphs that come up. So the main area is the very first dashboard tab, which gives you a snapshot of what should actually be happening moneywise each fortnight or pay cycle. Usually, I would recommend fortnightly. So here we have just a quick example off Jack's finances and jewels finances. These all get calculated automatically. As I said, you're only ever be altering the blue sections of it that these were all done automatically . You know, your current net total position and all that sort of stuff. So we have each person that pay coming in their mortgage repayments coming out. Some shared expenses, possibly some personal expenses as well. You can change these around how you like, and you'll have the remaining income that they have after each pay cycle. Now, down here, you'll have various bank accounts. You can add this information in. If you want, you can not add it in if you don't want. Well, it's not totally critical. But importantly, you'll have these two things down here, which is your current mortgage and your total net position. And as it is a negative figure because you're in debt, this is a mortgage. After all, it will be in red. And so this is your main dashboard, that you can see what's happening every pay cycle and just generally keep an eye on it and you can see who's getting paid, what, how much your loan payments should be and how much each of your expenses are. It's also gives you a total net position. As I said on a graph outlining your specific knowledge plan, you can actually see it in this picture here, but there will be a graph Dambulla he out, which will show you how quickly you'll be paying off your mortgage. So, as I've said before, your mortgage is quite likely the most important expense going on in your life. Other expenses, like petrol or even, you know, rates that might be $1000 a year or something. They still pale in comparison to your mortgage and getting all up in arms about petrol. Going up four cents is completely ridiculous if you're actually ignoring your mortgage so most will not really like the idea of using the spreadsheet. And I do understand this because, as I said, most people assign negative emotions to finances and spreadsheets and budgeting and cutting expenses and all that sort of stuff. But each fortnight, or each pay wherever cycle do you use. Just do give it like a one or two or three minutes looking. Make sure that everything's, you know, making sense and looking fine. Update your bank account values if you want. You just got paid and just make sure your mortgage is still at where the plan says it should be at. And if you feel like it, maybe have a look at what expenses you might you know. Want to investigate next and optimize mawr and, you know, cut down a lot more run or something. It'll just help spur that motivation and on. And yes, this is an ongoing thing. You're doing this every pay, Sarko, and yes, it does require disappointed to it. And But no, it's it's not hard you know, talking about opening up a spreadsheet. You could do this anywhere at home. At work. It takes about five minutes per month to do, and it will save you hundreds of thousands of dollars. So it might seem simple, but it is the sacred to conquering long term problems like a mortgage, this constantly doing it every two weeks every month. Just spending five minutes on it being aware of it, keeping an eye on it, been closing it down again a month later, opening up, making sure it's still on track. Yep, you're still making the correct repayments. Yelp. You're still getting paid the right amount. Close it down. Next month comes in month after month, year after year. This is how you solve big problems like a mortgage. It's not big, grandiose statements and throwing 200 K at something. Those things don't really happen. It's small steps, often and being consistent and just slowly eating away at the problem. Over years and years and years, Sir, Next chapter will get into a few final points 33. Section 9 - 5 - Finally: All right, So now you've got the spreadsheet. You've got your own copy. You put in all your information and hopefully have started to investigate all the wonderful things that you can do with it as a loss point in describing it. I just like to sort of, you know, make a point about the giant red bold note that says until this debt is erased, the mortgage is priority number one. So you can see this right here, and it should be visible every time you open the spreadsheet. Just a little virtual remind up, and you should really read it every fortnight or every pay cycle that you open the spreadsheet up. And what it's that do is to basically just remind you that you are not rich. I mean, you might have a decent amount of money, but that money is getting spent on a mortgage. Your in debt to the tune of hundreds of thousands of dollars. You're not rich by any sense of the word. You want to pay down that mortgage really quickly, obviously, because you're taking this course, that's fantastic. Make that your number one priority. So of all the tips and tricks and spells and spread shades and twigs and saw none of them a substitute for actually putting as much of your income as possible into this mortgage. As I've said time and time again, it is the critical point. Make your payments high, make them automatic and make them continuous. So this is what those throwaway articles will never actually tell you, because it is. You know, it's quite hard sometimes to do something consistently for many, many years, or they try and focus on is the quick to second tips that you know you can do and they never do anything. Which is why there's article was never worked. They don't focus on putting huge amounts of money to the problem continuously year after year and because it's so hard, you know, those articles they just never actually achieve. And you think hopefully with this strategy, you will actually be out of achieve paying off your mortgage in under 10 years and looking at the spread, shoot each pay and making sure that you're on track after a while. It'll basically just be second nature and you'll do it hopefully with a bit of optimism each time you pay you can see awesome. You know, we've cut that loan down just that little bit more than the next. Pay a little bit more and that loan day gets closer and closer, closer, and after a while you sort of just be out of look back and you know, very proud of how far you've come and all the things that you've achieved, because not only will that loan date go down, but as you push towards that 70% and beyond as you become more efficient, reduce your expenses, maybe even get a raise or something. That loan amount that you'll be paying will be going up and up and up and you'll see this in the tracking spreadsheet. It'll go up and up enough. You might look back a year and go, huh? Wow, You know, we're only paying $1000 a fortnight, and now we're paying $2000 a fortnight. That's a fantastic result, and those of the sorts of things that will make you proud. And that's what you can do by tracking your finances. So next up we will explain a little bit more about why it's good to do this tracking. On top of those reasons, I just explained 34. Section 10 - 1 - Start Tracking: There you go. So now we're going to have a look at a bit of a different thing, which is why to actually trucks are when new homeowners move into the new houses. It's, you know, it's a fantastic time. It's time to celebrate. Time to get excited. Time have parties. You know, they always sure ads for banks on New Couple was going into the new homes. And they're all, you know, fantastic looking as always and young and happy and bright eyed and all that sort of fantastic stuff. When you do go into a new house, you'll want to probably fill it full of things like furniture and bookcases and televisions . Maybe have had that stuff already, maybe a dark. And then there's other rooms that you've never had before. Maybe you've got multiple bedrooms as well, and you feel them with more beds or more disks or, you know, second fridge or all that sort of stuff. And after all this sort of excitement and parties and all this sort of stuff, you know, a few months might go past, however, after those few months pass And, um, you know, partying and excitement passes the mortgage payments don't actually stop, which is unfortunate, but you know, reality. So I once talked to a young guy who had just actually bought their first hence and they bought actually a plot of land, and we're intending to build a house on it. And all up it was going to cost them. He estimated around about 350,000 doors, and that's how much they had their loan for. And after sort of talking to him and poking and prodding and asking various questions, I asked him what his dream would be, so not what his goal would be. A people often usually have goals and maybe, you know, far fetched goals or more serious goals, but they usually quite different to your actual dream. Dream is, you know, I want to go to the moon. It's, Ah, absolute top of the hill thing. You probably don't ever think it's possible, not a goal which is, you know, more more likely to actually be obtainable. So this was his dream, and that was that with his wife's second income along with his, that they could actually pay off their mortgage in 10 years or not undertake is just 10 years. If they could do it in 10 years, that would be an absolute dream scenario for them. And a lot of people would look at that dream and say, you know, 10 years, $350,000 mortgage, You know, no, first homeowners compelled that kind of money in just 10 years. And when I actually, you know, ran through his numbers and ran through this strategy that I'm presenting you with that actually turned out that not only could he do this, not only could he pay off this mortgage in 10 years and less, but he could actually do it on just his salary. So not he is And his wife salary. Not two of them. Just his single salary alone. He could pay off this loan in 350 in 10 years. So the secret to it was actually just he had to be disciplined. And after talking to a lot of people and discussing it on, you know, hearing people talk about when they have Children or the sides of their income or, you know, maybe even how big their actual loanees and all these various different things I found that it's actually more to do with the actual person themselves and have disappointed how much they actually want to achieve this goal off paying the mortgage often under 10 years. It's not really you know the size of their line. It's no the income. I mean, they do it, come into things. But a lot of the time most people just discount themselves that those mental barriers that I talked about before go up. They don't even attempted, and it's them that's stopping themselves from doing. It's not the loan size or their, you know, income or any of that sort of stuff or if they have Children. Even you know, a lot of people like to use that as an excuse. It's their mental barriers and the discipline level that affects them and has the rial biggest impact, or whether or not they pay their mortgage off in 10 years. So one of the things that help discounts this is actually tracking now. This tracking ability is one of the most useful things that I can give to you. As a piece of advice on had a powerful mortgage early and whilst it's not in the top two off in terms of seven your payments high and keeping them there and making them automatic and being well motivated. It does tie into that second point off being motivated because although people often see tracking as sort of an afterthought that you know, is just a hassle they have to do, it can actually feed back into helping be motivated and without doing this tracking. I've found a lot of people just run out of this motivation over the many years that it takes them to pay off their mortgage. And so what do I mean, when I say tracked him and a lot of people instantly jumped to a big, super complicated and as I said, boring and technical and they just don't want to do it. They instantly stop it again. These might be some mental barriers that air coming up of what you're thinking that now. But it doesn't have to be complicated, doesn't have to be technical and, you know, hugely complicated. And in fact, I actually encourage you to make sure that it isn't actually complicated at all because it doesn't need to be can be a few simple numbers that you enter in every week every month, and that's it. That's still tracking something, and it will give you motivation. You can look back through the history. That's all you really need. So this will ensure that you focus more on the results than wasting time fiddling with some program. Again, people can either go down the route off just totally not wanting to do tracking it all. And now for our that mental barrier and stopped straight away. Other people floor into a different trap, where they kind of love playing with the tool more than during the actual works. I'm sure you've seen this in a lot of different things that comes up not only in finance but in things like fitness. You know that Raedle, the the blog's and the articles and the different nutrition advice sort of things. But they'll never actually go on have proper nutritious, you know, meal or lifestyle themselves are just constantly read about it or constantly install the app. So the tools are all that sort of stuff to make themselves feel good, but never actually do the work. So too often people get hung up on these tools and you know, they never actually do the main work. So this is another reason why I say Keep it simple, because you avoid that trap of spending all your time wasting time on those tools. So in the actual mortgage spreadsheet that you should have one of the tabs down the bottom . The mortgage plan tab actually does this tracking for you. So that's even beyond that. Yes, you already have the tour, but you don't even have to touch it. It's automatic. So, as you can see here, it just simply states the date. And this will vary as each fortnight goes by. It states how long you've had your loan. Four. As a fortnight to go by. It gives your age distance sort of give you some context to those dates. When you're looking back through history, you know you might look back five years or look forward. Five years could help. I find, give you that context. You can remove it if you wish. There's the loan amount, which you should see. Go down. Obviously, over time as you're paying it off, gives you interest rate that is used to help calculate various things that you might updated and you have the payments over here. And these are the kind of things that you want to track. You want to be out of, look back in a year and say What was originally paying you know, as a repayment to my mortgage a year ago when I started doing this course might be $4800 before not one of my pain. Now you know, now it's $3000 a fortnight. Look what how far I've come. And this is where the tracking becomes a bit of a motivational tying, a swell. It actually can get quite important. And when you track your mortgage, it also keeps in focus. So when those new homeowners sort of go into their new home and they're all excited and take photos and they've got all its energy and you know, all these parties happen and all this sort of stuff, as it said, it's fantastic for the first couple of months. But after that, all that excitement goes away, you're still stuck. Mortgage, and that's all good and proper. Have those parties and everything. But you've got to keep an eye on this biggest purchase off your life. This is your mortgage. This is costing you hundreds of thousands of dollars and you need to pay attention to it. And this tracking helps you keep paying attention to it. A fortnight after fortnight are not talking about spending hours and hours looking at it every four dot I'm just talking about quick five minute look over Gary up. Everything's tracking is fine. Perfect. Move on. Go back to living your life two weeks later. Four weeks later, look at it again. Another five minutes. Yep, everything's still going perfectly fine. Look, you know my repayments gone up slightly. Fantastic movie to the side, going live your life. It's a very small amount of time to commit to it, but keeps you coming back to it over and over again. Keeps you focused on it or throughout those years. And this is what you need to continuously destroy that mortgage over that full time. And what happens if you don't? Is that you just generally forget about it? You end up paying the bare minimum. You don't sort of look at it. A lot of people forget about it and forget about it intentionally as well. They associate negative emotions to it. They don't like looking at it that I like, you know, sort of finding out how much interest they're paying. So it is pushing aside that focus on their life, and they just ignore it, stick their head in the sand. It's not a very good thing to do, and unfortunately, it's kind of what most people do do. And, you know, if you forget about something like a car service that's pretty serious, your engine might run out of oil and might explode. You might get a new engine, and that too many probably sounds absolutely ridiculous. You know, who would forget to put oil in the car when it's, you know, cranking along and end up destroying their entire engine? That's, you know, stupid. No one would let their engine run out entirely of oil and just be destroyed. That would cost them thousands of dollars. But as I said, many, many people leave their mortgage on order, powered and just forget about it for years. And this doesn't cost them. You know, $10,000 or something that you know a few $1000 maybe $10,000 at a motor might cost them. It's cost them hundreds and hundreds of thousands of dollars. This is far more serious, yet people just ignoring it makes absolutely no sense to me. And as you can see here, this is just a very simple example again of what? Not paying attention to your mortgage conservative. Do you know if you're just a new person, you move into your house, you've got your mortgage for $300,000 appear and these birth of the same percentage rates. And instead of paying the absolute ban minimum for 30 years, so just $1000 you instead pay $1300 so only $300 more per fortnight. So we're not even talking about a huge reduction in terms to five years and paying it off in a super short time or even 10 years. This is just adding $300 or four nights are very minimal effort. In my opinion, top of the thing is opposed to completely forgetting about it and just having it on water Pilot. You're looking at a huge reduction in total interest paid. You're looking at around almost $300,000 that you're saving just from pain. Even the absolute smallest amount of interest to it. And this is why tracking is so important because we often have this thing called recency bias where we focused too much of our energy on things we can actually see in everyday life . So these are things that we see immediately and we come into contact with every day, like petrol and groceries. You know, we buy these things, we see these prices all the time, and so we focus on them. These other big things that we only see once every year over five years. Maybe a mortgage of you don't really pay much attention to it. We just forget about them and where biased towards these every day things, things that aren't recent, like a more rich we don't pay any attention to them. And these immediate and apparent, you know, money, expenses, tow us are very important. You know, we might go on and on about the process picture and all that sort of stuff, but you know, a mortgage. As I said, it's not very recent. It's very abstract. It's just some numbers in a bank account, and, you know tracking. He helps to sort of keep it recent. It helps to take it out from something that you don't look at, you know, every five minutes or even every five years instead, make it something you look at every two weeks on the dot Every time there might just be for five minutes. But you look at it every time. So it helps overcome this recency bias. So now that you know just how important it is, toe pay attention to your mortgage in tow, actually track it and make sure that you're monitoring and, you know, updating this spreadsheet as well. Um, off often also say that it can get very exciting as well, especially towards the end. When you use this spreadsheet and at the start, it can be a bit depressing. I must have meant, you know, you've got this huge mortgage that is possibly gonna take a long time. But as it gets closer and closer to the end, it gets very excited. You can see you know there's 40,000 left, 30 dozen left. You can see that in date, getting much, much closer. And, you know, hopefully approaching that zero point next up, we will discuss another important section which is automating your mortgage. So I will speak to you that 35. Section 11 - 1 - Willpower: a day. So in this section will be covering another very important thing. Maybe you have noticed by now that that one critical point that I was talking about waas setting your payments high, keeping them there and making them automatics. And now we're going to discuss the whole automating your mortgage. So a little bit of background information. I usually fry my eggs using north, not a spatula, so I don't actually have toe wash that spatula. Let Iran. I don't actually washed the knife either. I put that in the dishwasher side. You know, it's just a fantastic wind for May, and some might call this, you know, lazy as I'm not frying egg properly. And I'm not using special airing on Too Lazy to use one. But however, I kind of see it is a different type of lazy. Actually, seeing is being more efficient because I don't have to wash a special. I don't have to wash the knife. I can fry my eggs and then be done with it. It saves my life time, so usually lazy people can't actually people that doing whatever it is. The task is, for instance, actually cooking an egg and instead I'll just go out and buy McDonald's or something like that. So I'm all good. It as it, as I said, a form of efficiency and where I see a better way of doing something that is more efficient . It doesn't matter what other people think generally are going do that thing because it's more efficient. It saves me time. And so when it came to mortgage and how can I go about doing this more efficiently? You know, you can bet your ass that I'm gonna try and make it as efficient as possible. And this is where automation sort of started to come into it. And it's sort of actually goes a bit further because when you're dealing with money, that's something that's actually quite hard for a lot of people to do. So something like saving is usually considered to be a very hard task in a difficult task for most people to do. Especially saving a great deal of money and automation not only makes this easier and more efficient, but it also skirts around another set of psychological core human thing that we have, and that is willpower. Now, unlike what many people might tell you we actually have limited willpower, so it sounds kind of strange to think about it this way. But the whole sort of trying harder thing or whatever you know, inspirational spiel you want to put over it is just kind of a joke. Basically, we actually have a limited amount of willpower, and this is being proven scientifically. You can actually even read about it on Wikipedia. It's called ego depletion, and basically what it means is that once we resist something to such as, say, eating a bowl of candy or chocolate and where sitting there resisting that in using our willpower to not ate a bowl of candy that basically drains your energy and drains your willpower. So it's mawr exhausting to do it again later on. So view, you know, the start of the day and trying to exist, eating chocolate and then just successful. You know, you hold your willpower and use all your mind, and you don't touch it at all. And then later on it, say, three or four o'clock in the afternoon, you a near another bowl of candy, you're less likely to actually be able to resist it. Your will power has going down. I was nice and strong at the start of the day. At the end of the day, it's not so much and it's kind of like strength in that. It's kind of like a muscle, you know, you've you do one bicep kill. You might be out to do that really well because fresh, we've got a lot of strength. But after you do it, you know a dozen times, obviously your strength it goes down. And this is what willpower is like, and using it to resist this sort of stuff can basically just drain it throughout the day. So this is why automation is very, very important, especially for something like your mortgage, which is really, also crucially important as well. And even without your extra payments being consistent and automatic, it's far too easy and tempting to just spend that money somewhere else. Say if you don't have your repayments being automatic and you physically have to go into your bank account and actually click transfer on that money and say I want to transfer $1000 into my mortgage and you do that every single fortnight. Some people like this idea because it gives them more control and you know it's they want control over their money, which is very understandable. But because you're actually doing it, this takes will power to actually do that thing. It takes willpower to go, Uh, I must transfer. That hasn't always, You know, I want to actually spend it on buying a boat or going on a holiday out, whatever my day. And even if you're one of these better people, that will only spend it every set of few months, or even maybe weeks or something like this, they're still putting yourself through. Or that unneeded stress and angst of having to, you know, use your will power to transfer that money every sort of fortnight, taking away the whole aspect that if it's done automatically, it's just more fishing. You don't even have to think about it. You can be out. Partying just automatically happen. You don't need to go Morgan to your bank account and transfer the money and enter a description of all this sort of time that you wife's doing this. It's more quick off. It's also better for you psychologically. So when it's automatic, your limited willpower isn't sort of used up having to do this transfer before. Not and that will power can then be put to much better use. So will talk about what other people do in the next lecture. 36. Section 11 - 2 - What Others Do: So one of the first parts that I want to go through regarding automating your finances is to just take a quick look at what other people do out there. So if you were to go and search the Web and read along the top ways to pay off your mortgage faster, better and more efficient, even by very top level finance people, people who have degrees and spend a lot of time researching this is in the life, basically, you're pretty much never hear this concept off automation. So you're here. The more saying things about changing from monthly, the weekly and having offset accounts. As I said, I've been through all this sort of stuff. Others will say that you can tap save thousands by switching to a better interest rate. The bank, which I do agree with you can save, you know, many thousands of doors by doing this, but they never really mentioned automation. At least in the thousands of articles I've read. I've never almost once ever heard about it, and, you know, why might this be? And from what I can tell, the main reason they never really sort of tell you about this sort of stuff is because it's not a short cut, its not hack. It's not something that they can fit into a bite sized little article type thing. You need a lot more explanation behind it. Such a Z, something like this course. And if you want to actually really pile feel mortgage quickly. So reduce that term from, say, 30 years down to, you know, seven years. That does take some work, and they would rather focus on what some people call mental candy. So these little you know, hacks and tips that it's fantastic for you to go and read and, you know, learn about and indulge yourself in. It's It's like little bits of candy for your brain, basically, and switching from weekly to monthly and those sorts of hacks and tips. You know, they're just mathematical trickery. Basically, they don't actually save you a lot. They're not going to reduce that loan turned down to, you know, five years, seven years or 10 years or something drastic like that. They might reduce it by one or maybe two or three, so use it. It's not a particularly huge effect. They do virtually nothing when you actually calculated a well and most of these sort of tricks. Did these experts that have gone on and on about they fall into this sort of things that do little or even worse, the things that do nothing categories that I spoke about before, And that's one of the reasons why I went through and listed the more So I want to talk about automation, and I want to tell you why it's right up there in that number one critical thing to do so we will cover that in the next section. 37. Section 11 - 3 - Automation Is Number One: all right. So with humans in general, all of us suffering from this ego depletion that I was referring to before automation can come in and just drastically help. So with your mortgage set up to have it pain your extra payments automatically. So I hope you're aware that your general mortgage repayments usually come out automatically . This will be a secondary payment and extra payment that will come out automatically on top of that original mortgage repayment. Might have noticed that all these sorts of things that happen automatically usually in your life like bill payments or automatic fees that get tacked on all those sorts of things. The Hindu your life businesses set these things up intentionally because, being automatic, they don't want you to pay any attention to it. It just happens in the background. You kind of maybe notice it but then ignored and go on living your life. We actually want to flip it and, you know, use this thing that doesn't actually take any effort on your part to actually instead make your life better. You want it so that for once, your life is actually set up by default to help you so Rather than heating you with fees automatically, you're achieving your goals automatically. You're reducing that 30 years down to 10 years or less automatically with these extra payments, no amount of minor twigs or these hacks, and top 10 this that people go on and on about is gonna see $400,000 loan reduced to, you know, six or seven or 10 years in any appreciable amount of time. If you just do these tips and hacks of the thing, you need to actually commit a decent amount of your salary to it and make these things automatic. And if we compare this to you know these tips and tricks toe having a default automatic mortgage repayment coming at each fortnight of, for example, $2000 on top of your existing usual, it's a $900 repayment. This would take that same $400,000 mortgage that we're talking about, down from 30 years to just six. So again, this number might sound quite a large amount that it is possible to get to, as I said, that 70% is a target that you will slowly ramp up to, and hopefully with the strategy and my list of how to take care of expenses and all those parts. It will help you slowly breach up into that 70%. You might not instantly jumped, you know, $2000 or 70% or whatever it is you'll get there. Eventually do try, and it will go down to six years by just paying those two actual repayments year after year after year. So imagine if you could actually get rid of your mortgage in six years And knowing that you know you've used your money super efficiently by having this automatic repayment go out every fortnight or every pay cycle, and that you're making your life better automatically as each paycheck goes in and the money gets automatically transferred out. It's a fantastic feeling to have, because you can be living your life having a fantastic time whilst at the same time heating your goals automatically without any effort on your part. So it's a great position to be in, and most other people will be struggling out there. You'll just be having a fantastic time and, you know, killing those goals as well. So, for most people paying off their home line in under 10 years is, as I said, you know, a dream, literally something they believe is pretty much impossible and silly to think off. That's why it's a dream. But paying it down in six years or any of this sub 10 year time frame is, you know, actually quite possible. And most people think, you know, six years. That's absolutely ludicrous. You know, 10 years is a dream. 60 years is just, you know, why not two minutes? You know, they instantly dismiss it, but it is actually possible, and it's actually the result from one of the use cases that we did. So this is a quote from one of the people that has taken this material on and used to. And as you can see, he's paid off his $380,000 homeland in only 3.5 years. Now that is a huge amount of work and sacrifice, as he says. But, you know, even he admits that it was worth it, and you might not reduce it to 3.5 years. That is fantastic. Resort, even by this course, is standard, But anything on detainees will just monumentally help you and Hope is dying to see that it might sound a bit, you know, shocking upfront. But it is possible people have already done it. We have already done it. And with a bit of focus and a bit of hard work, you can actually do it as well. And I'm not gonna sugarcoat that it is going to be hard work. You might have to do this for, you know, two months, six months, maybe even up to a year. But this is the rest of your life that we're talking about and achievement of paying off $400,000 in under 10 years is, you know, a fantastic result. That's something you'll maybe talk about as well. You can point other people towards this course when they ask how you did it. And this automation that we're talking about really makes that hard work significantly easier. You still have to find that money, which is where the hard work can come into. But a big part of it is actually removed by this ordination. So if you're gonna make repayments, each weight and it just happens to sort of automatically come out via these automatic payments It kind of helps life go by quickly. So I'm sure you're aware of the fact that you know it'll be January or the New Year, and then you sort of do some work and look up in all its Easter already. You know, it goes quite quickly. Sometimes you might look up later on, and it's the end of the, You know, a full year can actually swing by quite quickly of your busy doing things. And it's fantastic again with these automatic repayments to just have them coming in the background is even though you might look up and it's Christmas already in the years basically over. You know, it's almost over now, even while I do this course. But it's still fantastic because you know that in the back that automatic payment has been coming out all that time and you've been crushing that depth away that time. So it's fantastic in number of ways, and I will now have a look into the next chapter, which is how to actually go about doing it as as it. I like to give you step by step instructions, so stay with me and we'll look into that 38. Section 11 - 4 - How To Automate: All right, So now we're getting into the final part regarding automation. I hope you understand how important it is and why it's one of those points in the absolute most critical thing. So how do you actually go about doing it? How do you set up your account toe automatically pay off your mortgage for you? It sounds, you know, quite complicated to a lot of people, but it's actually not. In fact, it's actually quite quick and simple to set up its you know, something that actually seamlessly fits into most people's lives day to day and for once, dealing with your mortgage or your bank isn't actually a problem, because most banks you don't actually have to call them up or actually even speak to anyone . It's usually on line, so this is going to look different for different banks. Obviously, I can't go through and do all banks all over the world, so I'll give you a few different examples and hopefully your one is. It should be pretty similar, and most of them do things the same way. So again, hurtful, it should be quite similar. Now, the one that I will give you an example for is the National Australia Bank, or NAB, which is a very popular bank here in Australia. Um, first of all, you log in and click the funds transfer, but so does that. First you log into your website your mortgage bank online website. Click the funds transfer button and then new funds transfers. That should look something like this. It may say something different on your own bank, but it should be similar to this. So this is the National Australian Bank and happy. You have funds transfer and then new funds transfer. So it's just a plain old regular transferring money from one account to another. In this instance, you'll be doing it within your own linked accounts from your perhaps your joint account over to your mortgage, chicken or something on those lines. Or maybe your own personal account that your pay comes in due to your mortgage account, probably the same one that withdraws out of usually anyway if your regular payments. This is a new separate payment, as I said on top of it, and you want to set up your from and to accounts, obviously you want to sit your repayment amount, give it, you know some top of description as well. Put your name in there who it's coming from, and then you want to choose the periodic payments sections. This will usually be down the bottom, probably next to the you know, pay. Now most people just set up a payment and going pay it straight away that this one will be a recurring payment or periodic repayment, and they caught and make sure it's fortnightly. Now this can be weekly as well. Most people don't like doing things that often fortnightly worked very well for us. If you get paid weekly, it might be different. As I said, do whatever's easiest you, but probably Fort Nightly or weekly is best, and then you simply click applied, and obviously the to account should be on mortgage. And for us, the from account, as I said, was a joint account for couples. Most people usually have a joint account that share. If it's just you and you're a single person, you know all your salary might come in tow one. I can't just go straight from them for the repayment amount. I would actually recommend, sort of aiming quite high, used the spreadsheet once you filled it all out and should spit out a number of how much it recommends your payment are I would try and match that as closely as possible. Even if you think it might not be possible, try it for, you know, a month, as I said, tested out, see how it goes fortnightly and wait clear Payments are pretty much the same as I've explained a lot. Billy up basically does match it up with whatever your pay cycle is. Um, you should be fine. And below is another example of a completely different bank. So this is another bank in Australia called I N G. And I know they're very popular in Europe as well and in their online accounts, or to do exactly the same thing. Just using a different bank has a different example. So you can get Mawr ideas of what I'm talking about again. You first log in, and then you click on transfer and pay. They call it this time and then choose transfer funds. So again, this will be just a general funds transfer. But unlike normal way, you make one transfer to maybe a friend to pay for dinner last night or something. You're making it to your mortgage and you're making It is a periodic thing, So first of all, you choose your from and to account. Next, you set up your payment amount. And then, as I said, you choose your frequency. You make it a recurring payment. So in this case, you select their occurring button and then another window pops up and you could make it fortnightly. A weekly which had the one, whichever one you prefer. And you want to make sure it doesn't actually have an end date because this will probably go on for a number of years. It'll just be sitting there in the background, transferring money every fortnight for a fortnight from the year side. It's best if you just don't set a in date, and then he transfer. And once you've set up this automatic repayment, you can go about your life and just know in the back of your mind that you're curing your mortgage in the background. It's all automatic and happening just for you as a set. The default scenario is that this is helping your life, and it's helping you achieve your goals and that you know, in a sub 10 year time frame, your house will be paid off for you. You know, it might be five years of sixties or seventies. Whatever it is, it will be paid off. Whatever that goal you've set on the calculations you've done in the number that it spit out entered in, you know that you'll be getting closer and closer to that end. A. And just as an additional point, if you ever are lucky enough to get a raise or, you know you're spending the months and you shave a bunch of expenses down and you get more efficient or you just, you know, stumble across more money, each pay cycle you can actually increase. That repayment meant So it's fantastic because if you actually come across an extra $10 or maybe even, you know, next $500 a fortnight. If you get a raise, a really good one. You can actually just go back into this payment and click edit, and all you have to do is change your repayments that this might be set to say $1500 you come in after you've got your Reyes said. It to $2000 cause you have $500 raise and then click apply again. So this will just take it from having $1500 payments up to $2000 repayments every fortnight . And you just continue living your life. Yes, you got a fantastic grays, and that's great. But you still want to pay off this morning. You want to pay it off even quicker. So you continue with the level off purchases and level off life that you're used to living . But you're now paying more towards your mortgage. Your mortgage term goes down drastically, and this is how you gradually go up to that 70% over the months and over the year. And this just makes things a simple was possible because you don't have to call up your bank and talk to someone and argue with them and all this stuff you can just quickly logging in, you know, changed the figure, and off you go again. And this automatic repayments is hope you can see a key part off. Why setting your mortgage repayments high and making them automatic is so critical because you get that joint effect off high payments being automatic. You don't worry about it. It happened or in the background for you. And before you know it, your mortgage is getting crushed. So join me in the next section, where I'll be talking about why some people do this. 39. Section 12 - 1 - Why Do This: a going already. So we're now into the final theory chapter off this course, which is why to do this now. Hopefully, I've already convinced you why you should pay off your mortgage early and why it's so important and why it makes such a difference. But I just wanted to give you a bit of a lost round off, you know, and another actual reason why you should be doing this right now. No, made a run, But now, so back about a year ago on the second of Oreste, something quite historic happened, at least here in Australia. And that was our Reserve Bank of Australia. The R B A cut out cash right down to a 1.5% which is the lowest point in history as of that point that it has ever been. And as a result, it's time to pay off your mortgage early. I mean, people have been wanting to pass their mortgage early for a long time, and you might do this course and, you know, not use it for another six months or even another two years. You have lifetime access, but Iraq and you should be doing it right now because it's simply just the best time in history. I mean, like, this is our Australian cash right historic chart, and as you can see, it's It's the lowest it has ever been. There's never been a better time in the history to pay your mortgage off. And since about 2000 and 11 or maybe a lot of other countries around 2000 and eight with the GFC, the cash rate is, you know, basically going down, and your country probably has done that as well, and in some cases it actually even gone below zero. So that's actually called negative interest rate policy. Or in RP, you can have a read about it here. And this basically means that if you were to put just say, for instance, $10,000 into the bank in Switzerland, you'd actually have to pay them money to keep your money. So instead of them, you know, instead of you putting in your $10,000 they give you 2% interest in, you get money every year, you would actually have toe pay them more money. On top of that $10,000 you already put in the bank just said that that would keep them in there. It's, quite frankly, just insane. And there were a number of countries that ran negative interest rates somewhere. Sweden and Switzerland and Japan. And not far behind them were all these other ones as well. Things may have changed since then, but they were all basically around zero someone negative, some with slightly above it. And if you have a homeland, this is all fantastic news. As I'm sure you know that when a country generally speaking has lower cash rate, it means that the home loan rates that the banks offer also low. And while they're not, you know, a 1 to 1 ratio. Sometimes they are. But most of time, you know, the cash rate will be here, and the homeland right will be just a little bit higher. But they'll, you know, generally move in lockstep most of the time. And usually most of that cut is passed on, you know, when they cut it down, they cut most of it down. When they increase, it definitely increases. So, as I said, then moved in lockstep and I just wanted to in the next lecture, go through a bit of a different type of a use case. So you've seen me go through other examples early. Iran. This is a bit of a different one, so stay with me and we'll look into that next. 40. Section 12 - 2 - A Different Type Of Use Case: all right, So time to go through a slightly different type of a use case. So obviously, everyone hopefully knows that interest rates affect your home loan. How much interest you pay. And you know how long you have to pay off your mortgage because of it. So But if you actually know just by how much, you know, obviously the interest rate goes up. You're a payments go up. You hear it all the time. And the news that you know, this rate change will mean an extra $50 a fortnight for the average home line. You know, they try and sort of give you examples, but only give a different type here. So assume we have a 300,000 or mortgage and assumed like everyone else out there were paying off in 30 years. And I wanted to descend of give you a bit of a look at what your fortnightly repayments would look like at these various different interest rates for those who might not be fully clear on just how much it can actually affect it. So here a few different interest rates from you know what they currently sort of our around to what they had seen historically and that being even hard in this as well. And this is what your fortnightly repayment would be to pay off this $300,000 mortgage over 30 years. You know, at 4.5% you need to pay $701 to pay it off for 30 years, sir, As of during this, you can easily go out and get a loan in Australia. So, as I said, I do these examples for Australia. You can check your own sources and find it your own interest rate. But for Australia, it's just an example. You can get a decent home loan at 3.89% at you know loans dot com dot au. It's slightly higher from the more major banks. This is an online bank here in Australia, so there's no physical bricks and mortar presence. Because of that, they can give you cheap rates. So at the major banks, you can do it a little bit high off, and your repayment would probably be between that 6 21 and 71 sort of areas. I decided here from 3.89 up to maybe four, maybe 4.5 or so. So, historically speaking, homeland rates have usually actually being around that 7 to 8%. At least here in Australia again using L location is an example. Andi actually went as high as 15.5% you know, I think was about 20 or so 20 or 30 years ago. A lot of people might not know this is your new, you know, you're sort of 30 or 40 years old. Maybe you may not be aware of it, but back in, I believe it was the late 19 eighties Actually got up very Heidel, that 15% on, you know, that made it hugely difficult to pay off for mortgage. But, you know, even at a 8% which is a very typical historical interest rate to have a lot of people used to this, you know, 0% or 1% or 3% type writes that we've had for almost over well over a decade, the sort of thing, and that's all they've known. So they don't know that 78% is actually sort of the historical norm. But even at this 8% even at this historical norm, you're paying an extra $10,000 more every single year just because the interest rate is higher and you know, so what you could do without, I'm sure you can think of a few things you could do with $10,000. But you could go to Santa Rini in grace for a full week. Stay in your own private house and you'd still have another 4000 doors. So this is what doing that would actually look like going to beautiful Santa Rini staying in your own house, having that lovely without, You know, you could do this every single year and still have $4000 left over just because it's a different interest rate. You know, I'm tryingto provide some context for those people that don't necessarily like, you know, all the numbers and all that sort of stuff. You know, they might look at this and not really have a click in their head because they're not numbers people. But, you know, just the difference between this scenario here, where historical averages and 8% is your interest rate versus what we currently have. Now this difference is $10,000 this is, you know, 1.5 of these gorgeous trips to ST to Rainey, flying from Australia all the way over to Europe's That's flying halfway around the world. You're an American. You could come fly to Australia. Good. You know, basically, you can fly anywhere in the world, spend a week at a beautiful private house, still have 4000 tallest left over and do this every single year. That's how much of a difference and interest rate can make. And just to go even one step further than this toe, even break it down into a different example trying to ram this point home. If you take the same $300,000 mortgage, you take the same difference. This 3.89% versus 8%. So the only thing that is changing is a different interest rate. That's it. And it's, you know, just about 4% or so if you pay the same amount per fortnight. So same line, same payment per fortnight. The only thing that is different is the interest rate. This is a difference that it makes. So you're paying the exact same amount every fortnight and your loan term harp's because of that interest rate. That's how much of a big difference it is. People see these interest rates and they say Humanitarian 1%. What the hell's out? 4%? You know, that doesn't make a difference. It's $50 a fortnight or something. This makes a extremely huge difference in talking about half the length. You know that's you're reducing your mortgage term by 15 years, haven't even lifted of things. You're not doing a thing differently. You're not living differently. You know, cutting expenses. You're not doing anything that I have mentioned in this entire course. You haven't changed a single thing. You've already almost cut yourself down toe the sub 10 year time frame by doing absolutely nothing. But just using this small interest, right? Sort of things hurt. This has, you know, there's multiple examples or multiple ways of saying the same example was really sort of heating home to everyone out there that there's no greater time to pay off your mortgage. Right now, interest rates are incredibly low. You can go out and get a mortgage at a rate that is almost unheard off. Historically speaking, you should make full use of that, so I'll get into more of this in our next chapter that is coming up soon. 41. Section 12 - 3 - Allow Me To LIght A Fire Under Your Ass: all right now we're back. And as I said before, current homeland rates are just stupidly stupidly lord, and it seems likely that they'll remain this way for a decent number of years. No one really honestly knows. But right now and from what I can tell for the Knicks at least few years, and from what many of the experts say, it should stay reasonably low. And that means that right now it's a hugely hugely important time that you pay off your mortgage now and actually take action right now. Use the material in this course right now. Don't sit on it for six months or 12 months or two years. Things can change. The interest rates could go back up quite quickly over a year. They could go back up one or 2% and it will make a huge difference. It will make you know a trip to San Terranea. The Great Islands taught of a difference to your and you should always also be still thinking off that 70% that I mentioned before. So even now at incredibly low interest rate terms, still think 70% still trying max it out as much as possible because you know that $300,000 mortgage at 3.89% that only needs two shy of $1400 per fortnight to have it paid off in under 10 years. And if you're here in Australia and your, you know, earning $100,000 before tax. So that's a total household income in a single person. Households like $50,000 each and also add, that's below the average Australian income. So this isn't, you know, a software engineer in Silicon Valley or something like that kind of income. This is $50,000 to give you an idea. If you aren't in Australia, is, I believe, below what most teachers and police people a teacher will quite happily on, You know, the 60 to $70,000 even when they're starting out. So this isn't a fantastically huge income. So if you have a policeman and a teacher as a family unit, they could quite easily be earning well over $100,000. And if they're trying to pay off this same you know, $300,000 mortgage, their after tax income comes down to around about 85. There that 100,000 and if they want to pay that $300,000 mortgage off in under 10 years, they can use 42% of their after tax income. That's all I need. So as I've been saying, you want to try and push to that 70%. But sub 10 year time frames don't even take 70%. They can take 42% in a very average or even below average example here, Australia. So in this example, it would leave 48,000 and a bit per year for expenses, which is hardly, you know, living in tough here in Australia. And if you have a smaller mortgage, that maybe you're on to 50,000 is your mortgage or maybe you've got a high income. Maybe you are a software engineer and you're working at a very well paid, respectable job. Maybe you've got lower expenses than that $48,000 a year. You know, maybe you've got all three of these things together. What means is that you can actually go further than that. 42%. You can maybe push up to that 70% and you compound that mortgage even quicker just is another example. If you're a lucky couple and you have a combined household income of 100 a. D. So you're actually $90,000 each. So this might be again to sort of put it in perspective for people who don't live in Australia. This might be your you know, your software engineer whose starting out of your telecommunications engineer or maybe a teacher that has bean in the profession for a number of years, maybe 10 or 15 years sort of thing. You might start the start to earn upwards off $90,000 if you're bid order and a bit more educated and advanced and have a degree a lot sort of stuff. And if you can survive on $40,000 a year, which again is not particularly living tough, it's certainly less than what they had before. But it's still by no means, you know, eating noodles every night or anything like that. Then you can put $97,000 or 70% of your after tax wage towards that same $300,000 mortgage , and it can be paid off in 3.3 years. So that's three. So all this time I've been talking about sub 10 year time frames, and this is just to sort of, you know, make it clear that I do mean less than 10 years. I mean, you can certainly hit that 10 year time frame, and that should be a very good starting point. But it's quite possible to push it right down to, you know, 3.3 years. That's basically unheard off. That's just, you know, bunkers. But it is mathematically possible, and it is possible to do if you have 300,000 alone on a successful job that earned you a decent amount of money, you can pay this off in 3.3 years on Dean. Maybe you don't want to be as bonkers as that. Maybe you wanna spend a little more than $40,000 a year. Maybe you spend $50,000 a year and this 70% rate goes down to, you know, 60% or 55%. Even maybe that changes that you know, five years or something like that. It's still a fantastic result, and these low interest rates that basically everywhere in the world are a huge helping factor in this. As I said, it cannot to double your mortgage length just by having a mere average, you know, high, just historical average of about 8% interest rate can double your loan term. So it is very important that you do this and it is very important that you do this now or at least very, very soon. So I will continue on into the next chapter, so I will talk to you. 42. Section 12 - 4 - Stop Thinking And Start Killing: sir, With this final part of the course, I just wanted to try and ran home 100%. I really hope that by throwing out some of those above mathematical examples and visual examples about how important this is, this course has really encouraged you to accelerate your mortgage repayment in at least some form to be consistent in paying large chunks of your mortgage. You know, every single fortnight and making them automatic and pushing and pushing towards, you know, about 70%. That is the way that you have to do it. And you need to basically do this nail. And you need to do this for a number of years. So the best time to get started is right now. I mean, are you slacking off on your payments and kind of know you just paying the been in the memo ? Maybe your, you know, paying a little bit extra, maybe a pain $50 or $100 more per fortnight or something like that. You need to start thinking about that 70% for you. You need to start pushing up to that 70% figure, because without doing that, you're just not going to make much of a difference. And the home loan rates that are available right now are basically unprecedented in virtually or history. Certainly in the life time that I've been alive and they've never happened before in Australian history as well. I don't know about other countries, but certainly in Australia's history that never actually happened before and that likely stick around for a few more years. As I said, no one really knows exactly how long, but there's never been a better opportunity to just attack your mortgage and pay it off as quickly as possible. And it is, quite frankly, just the best time in all history. So don't waste this opportunity. I mean, I know you might be viewing this course a year from now, but it will still be the best time to start acting on your mortgage. Start paying in office quickly as possible. Push towards that 70% set your payments high, make them automatic and just start crushing your mortgage and try and push yourself, get fully committed towards it and just take this once in a lifetime opportunity, your mortgage. As I said, it's the biggest punishment. Basically, you ever get the largest amount of interest you'll ever pay off in your entire life. So takes an action towards it, takes an action in reducing that punishment and try and get a best result for you. And no one knows knows how long these low interest rates are gonna last. But, you know, take use all that now, make use of it. Pay off your mortgage. I can't say it any more times, just, you know, use the material in this course. Hopefully I have made an impression when you and hopefully you know how important it is and how much better it will make your life. And hopefully I've conveyed that information to you enough and in a way that you understand properly. And hopefully you take action. So this is the end of the course right now. The next section there are going to is simply an example off. How to actually implement that strategy is and everything I have explained that there's no more actual theory. This is the end of it. So stay with me and we'll go through that mawr detailed example scenario, and I'll talk to you then 43. Section 13 - 1 - Income: All right, So now we're into the final section, which, as I said, the theory is all gone. But this is just an example for the whole strategy. Everything start to finish this scenario. As I said, Sub 10 year time frame. We're talking about a $360,000 mortgage, and we're talking about five years not paying it off in 10 years, paying off a natural five years. So when we first started with our home loan, I didn't actually have much money, idea what to expect or what you know, any specific plan to follow strategy or anything When we were doing it back in 2009 I, you know, was brand new to all this. I didn't know anything about it at a research. I had to go through everything and sort of decide not to follow the social default of paying it off in the years and took me quite a while to sort of, you know, sauce everything gap, learn it all, read all about it, go through all these different sources, you know, many, many years. And as I said, if I had had this information, so even just this example, not just the whole course, but even just this example that are about to go through. We probably could have done as in about five years, instead of that 6 6.5 that we ended up doing it in. So to help new people sort of digest all the information that's in this course of everything that I've gone through. You can always go back to any of the lectures, replay the movie, not 100% clear on, you know, dig a little bit deeper into some of the other reference material that I've given as well. But I just wanted to give this example to sort of show of how it sort of plays out and had I would run through, you know, with specific figures on specific use case. So to get things started. This is a five year plan for a couple that has the following, you know, tops off income and such. So they have a combined Australian income of $150,000 a year before taxes, $75,000 each, or maybe ones on 15 100 does matter combined. I have 150,000 they have no Children, and they also want to be debt free with in five years so they can do whatever you know. This is the gold that they've set. As I said, one of the first things to do is to set up your reality and set up your goal of what you want, because then it defines everything else. Sorry, whilst this income off $75,000 a D per year per person might sound high to some people savior in America, that's actually quite a moderate Australian income. Nowadays, it's commonly earned by teachers or people who are policemen. So there's a very, you know, common jobs. It's not. I've gone to uni and Donna, you know, Dr in X y Zed. And now I'm a research scientist and, you know, incredibly, incredibly smart and, you know, Doctor or any of these sorts of outrageous incomes. This is your policemen, your teacher, very average moderate and good jobs that we have here in Australia. So that should also give you a bit of a reference of your in another country. So it's definitely not unachievable and a very common barrier that people have with paying off a mortgage so quickly, and this is a mental barrier that comes up and you hear it all the time. If you ever discussed this course or what you're doing with it, you'll hear it very commonly is that it can't be done with Children. Sorry. You know you'll be like, Oh, I pay my mortgage often 6.5 years and they might go how That's fantastic. You know, I could never do that because I've got Children and it would be impossible because I have got that. We've heard it a lot and besides the fact that it can actually be done with Children. And I have other examples that prove this had people that have taken this course and this material and actually done it with Children with numerous Children. In this particular scenario, I would like to imagine that the couple might want a path the mortgage first before they actually have Children. So, as I said, they want to pay it off within five years, and it's quite common that you know you by your first house, you might be 20. You might even be 25 and it's also very common that people have Children and around 30. So this works out quite well, you know. Sure, it might not be out of doing. We have Children. That's a lot. But even if you can't pay your mortgage off first, then have Children. You know you can have one partner not work, because it's not required anymore. You don't have those huge mortgage repayments to make sex. This is a scenario that we're coming up with. And let's just have a look at the income so you can sit this out exactly the same. You can make your own table and filling your own figures in the mortgage planning spreadsheet, which have already provided to you. But these are just their current figures for this current example, so each of them have $75,000 in income. When you apply the Australian tax rates, you get this much tax, which leaves with a take home pay off around $118,000 together after taxes. After everything. What they actually received in their pocket in their bank account, which is about 4.5 grand before next, will go into what their expenses might look like. 44. Section 13 - 2 - Expenses: Okay, so now we're looking at the expense is part of things. So below here is a very general list that I made up of what a couple can expect to have in the way of expenses. Obviously, I can't predict what every person six Pinter's is gonna be. This is just a rough guy. That being said, these figures are based on some very detailed and long term tracking that we've done and that we've got off other people. So hopefully they come across has been quite accurate for most people in Australia, at least again. I can't do this for every single country, every single person out there, But you'll find that hopefully it should come out to be around the same. You know, in America, your car costs might be way down and food costs might be far less than what they are here. But other items might be slightly higher. Your medical bills. You'll you know it's different in each country, but your wage should also help balance those two up. So regardless you should be aiming for around about 30% of your after tax wages to be consumed by expenses. So 76 70% towards your mortgage, 30% towards your expenses, and these can very and go up and down. As you start to try to purge that 30%. You should see your expenses come down towards approaching that 30%. Sorry. Approached 70% for your mortgage Approached 30% for your expensive. So he is just a quick run down of what the expenses might bay for this typical a strange couple. So you have gas or natural gas that we used to heat our houses here. That might be around $600 a year. You might have house insurance, Internet, you know, actual electrical power bills, house rates, that water, food, how much they spend per week on food. All these various different expenses that come through You might have car insurance, car reijo car, petrol cars, a very expensive cost service. You know, this is for two cars as well. And you know, here in Australia, petrol is moderately expensive. It's much more expensive in Europe and other places like ice land that again in America it's a lot cheaper, so it will differ from country to country. But as I said, some things will be high. Other things will be live. Hopefully, it'll work out very similar. You also have things like mobile phones, private health insurance presence for things like birthdays or Mother's Day, Father's Day, Christmas, those sorts of things. You've also got categories for sports and exercise, so these can be quite high, even for two people you know, $800 a year. That might get you a gym, membership or other types of things. And you even have holidays. And here's are good, decent size budget for holiday. You can quite easily go halfway around the world and spend a couple of weeks in Europe. If you're strain. Well, maybe if you're in Europe, you can come all the way to Australia and spend a week in. So either way, this laundry list of expenses adds up to around $35,000 or $1300 a fortnight. Now this is quite a reasonably detailed list. As I said before, you probably only want maybe five up to 10 categories of things when you're, you know, going through all your expenses. But you know this is quite acceptable and enough, and this is only a few over 10 as Well, so you really don't have to get into hundreds of categories a car service car, petrol. You could just say my car costs picks come out. You have to go into these individual, you know, insurance, radio, patrol service. All these types of things you can decide call category and be done with it. It's up to you have detailed You go. And I would always advise that you go less detailed to begin with and then get more detailed with time. So at least you've got somewhere to start from. So next up will be looking at the actual line itself. 45. Section 13 - 3 - The Loan: all right, so we've been through the income. We've been through the expenses. Now it's time to take a look at the loan, so 30% is going to your expenses. That means 70% should be going to the loan or $3184 per fortnight. Now, given their goal is to have their mortgage paid off within five years, yours might be different about the seven. That might be just the stain to 10. We jump over to a loan repayment calculator and punch in the figures, so it's gonna be different for everyone, which means you can go to your own loan repayment calculator and punching your own figures and get your results. So I've assumed an interest rate of 5.5%. That may seem laughably high to some, people might seem normal to some people, but regardless, it's quite possible over the next sort of 5 to 10 years that it will go back up to its historic norm of this sort of seven or 8% of what it's been like for the past many years, and regardless of 5.5% there a payment you know of 3100 per fortnight. It shows that this mythical couple in this example could borrow $360,000 actually still paid off in five years. Even this high our percentage rate. You know, as I said, you can get about 3.89% now quite easily by just going toe website. So 5.5% is quite high, but they can still pay it off in five years. That's what that shows. So here is an example of another mortgage calculating website device and you've got $360,000 which you entering here. You want the loan term to be five years, so this hasn't said it might be seven years. It might be 10 years. Whatever you want you entered in here, you also put in the interest rate and then it gives you your answer, which is 3170 side that matches up nicely with 3184. It's actually a little bit less. And you know, if you find that this number is, this number here is far higher than what you're, you know, 70% is that just means that you can increase the loan term just a little bit, you know, make it six years or seven years. It's still a great result, but in this case, they should be fine for five years. And assuming that this is a 80% loan to value ratio mortgage, so sounds complicated. Financial mumbo jumbo. What means is that 20% is a deposit and 80% is the actual mortgage. So they're not actually getting a $360,000 house. They're actually buying $450,000 house 80 descent of that is the $360,000 mortgage. The other 20% is their deposit. So you figure this out just by dividing by 200.8 or 80%. So if you only have a 10% deposit, that would mean 90% mortgaging you would divide by 900.9. So now that we've got all the ingredients together, we can go and have a look. The result in the next lecture 46. Section 13 - 4 - The Results: all right. Now we want to tie it all together. We've got the income, We've got the expenses. We've gone through the loan. We know all the information. So let's collected all together. Find out the results are in the end. This couple can do this exact plan and actually completed. Be free off debt within five years if day put 70% of the after tax wage to the mortgage, and by a $450,000 house with a 20% deposit. So that results in the 360,000 learn that put 70% towards it, and in five years it will be paid. Often, that's, quite frankly, it sorry possibly seem to you that it's a bit light on details and hopefully, as I said, if you're confused about any of the more finer details, you can jump back to any earlier points and re watch those videos. But really, at the heart of a paying off, your mortgage barely is actually very simple. They try and complicated a lot with, you know, all these tips and tricks and 100 billion different ways of doing things. But at the end of the day. It's that critical couple of points and mainly that top one, which is force that repayment a man up to 70%. Make it high, make it automatic and just burn through that mortgages fast as you can. You know there are ways to live quite comfortably on $35,000 a year here in Australia, and we certainly have done it and still do. And when you have no kids, this just makes it even easier. So if this is where you're at and you're having issues sort of trying to figure out how toe , you know, get your expenses down low enough so that your payments could be big enough. There's a number off, you know, websites and bloggers out there that can certainly help you and advise you to first sort of rewatched that expensive section. So you actually know how to take on these frugal blawg websites advice whilst at the same time not really cutting back your expenses where you actually feel that way actually feel deprived. You don't actually have that as a permanent thing that lasts the full five or 10 years of your mortgage. You want to only cut back on those things that you really don't care about. Those things you do love and do care about, keep them. Don't worry about them. Be brutal on those expenses that you don't care about. If you don't care about drinking coffee, kill it 100% $0 a year. Spend no money on it. Focus on those things you love, and it will be a fantastic result, I promise. So I'd also strongly recommend upping your payments straight to that 70% off your after tax paying. As I said, that was a major issue with us. We wasted about a year, year and 1/2 by doing a slow grandpa because I was still learning. I wasn't particularly sure of it. You can just go straight to that 70%. If you've got that re drawer feature, which most mortgages do these days, there's no harm in doing any of you jump to 70% and then two or four weeks idea like Oh man , you know, absolutely running out of money. This was all gone wrong. I miscalculated all these things, whatever. That's not much of an issue. You can redraw back out of your mortgage, you know $1000 or whatever until your next pay comes in. It's not the end of the world, and at the very least you know exactly where that tipping point is. That point that you can't push anymore towards your mortgage it might be 60%. And you go, Dan, you know I can't get to that 70% straight away. All well, put a little bit back to that 60% than just stated that bank you've gone from, you know, maybe zero or, you know, 10 or 15% straight up to 60%. And you could just keep crushing 60% for many, many years, much more fantastic results. And this is just one example. If you would like to read through many, many more examples off, you know, people that do have Children or one or two kids and pay off a certain mortgage size or power for certain mortgage hires with a certain different, you know, income level than what I've specified here. I've written all the days out, and there's many more of them in date. How on my website. So I hope you've enjoyed this course and enjoyed this example of all the other ones that are dotted throughout it. I'd like to thank you again for actually taking. And I hope that I've taught you something interesting and amazing throughout all these lectures that I've gone through. And finally, I just want to say get out there and tie off that mortgage early. Think, 70% kill those expenses, put it or towards your mortgage and do it right now and get started. Right now. Those interest rates can only go one way, and that's up. Get started right now. Thank you. 47. Section 14 - 1 - Extra Details On The Spreadsheet: Okay, so this is a little bit of a bonus material for you. I thought that I would go through and just go into a bit more detail on the mortgage planning spreadsheet, which we have here. I know I'm usually down in the corner here with you encouraging you and all that stuff. But for this one, I need a little bit more word to describe things. So just imagine me down there, you know, my little head yammering away. So when you click through on that link for the mortgage planning spreadsheet, you'll be presented with what? I think a very nice talking spreadsheet is far a spreadsheet to go, and you'll have a lot these different steps to fill out. So I'm just gonna go through each of the steps and each of these tabs down here and give you a little bit more information and guidance on exactly how to do it. I do go through it in the course. This is just a little bit extra, just in case you wanted, you know, really fully understand everything about it. So, first of all, we have Step One, which is just filling your general information so your name and your date of birth. This date of birth is just used to help calculate your age in the mortgage planning spreadsheet. The taps worried, so you don't have to enter it in there. But as I said, it can help when you're going forward in future or back in the past to help, sort of give you a bit of context that you were, you know, 25 2 years ago, 25 in 10 years time, whatever it might be. So fill those in, then jump straight down to here, which is your after text income, your debt payments and your contribution percentage. So sometimes some people have different levels off contributions that they may want to put in. You know it's a 50 50 split between you and your partner. Maybe you don't have a partner, in which case your contribution would be 100%. Obviously, this is how you change those facts here if you put in any debt payments, so the yearly title for any other debt payments such a car repayment, university repayments, credit card bills. That way the whole spreadsheet can take these payments into account and not suggest you know a huge number that you could never pay because you've got all these other bills of the you haven't put in and obviously your after tax income here. So this is how the spread shoot accounts for many different countries. I could do an automatic calculation if I knew what country you were coming from, But as I don't, you're just gonna have to put in your after tax yearly income in here for you and your partner. And then we move on to step three, which is filling in the below information about your actual mortgage. So what's your current mortgage balance? No. When you started with what your current one is right now, your last loan payment date. So he is the date when you're last loan repayment was taken out. Said this controls the starting date on this mortgage plan tab, which will get to in a minute and just the payment frequency. So do your mortgages come out every month? Four night every week. You can change it up here. So once you've done that, you jump into the your mortgage plan tap, which is down here and you entering your current interest rate as Well, so let's jump into that. Now You can see up here your current interest rate again. You want to be filling out these blue squares or only and you want to fill it out. Might be 4.5. Might be 10. That might be to whatever it is. Once you fill it out. Once it'll cascade or down here below. And as you're going in, you can actually, you know, say in after a year or sorry, the interest rate changes. You can actually enter it in there as well. And then it'll take it from that point onwards as well, so that the mortgage plan tab come back to it later in a bit. After you've entered in that current interest rates just fill out that single blue square there, then go in and fill out the expenses taps that this is over. He'll again another time down below. And this is a lie, your different expenses. So I've tried to go into a reasonable man of data for you already. As I said, this can only be 5 to 10 different categories. You don't have to go into every single individual car payment type thing. You can just put it as a car. You know, bills, sports, you know, more bills, etcetera. So you've got both individual expenses here for each partner and shared expenses. If your single using just enter, it'll in under shared or you have you like I've tried Teoh basically give a lot of different categories just so that it, you know, gives you an idea of our did you forget about car insurance and the ridge? Answer. This is and, you know, maybe roadside assistance care packages that you might pay for loan repayment. My pay foresight. You're it half to fill in all these things. But they're dare to help remind you, you know, Do you have a car loan repayment? Do you pay for roadside assistance? Do you have a pit? Hopefully should know that one. But go through all these expenses and just fill them out. It doesn't have to be 100% exact. Try and get it. At least you know, 80 or so percent accurate, and then you can come back to all this later and make more accurate, and it gives you nice little tallies of you know how much it is per year per decade, for you're individual expenses and your shared expenses and lots of stuff. So once you filled out all those expenses, you can come back, and that's pretty much it. In terms of filling out information from here, the spreadsheet will duel the automatic calculations for you, and it should give you these numbers here below. And it's these amounts that you should be actually committing to your mortgage. So this amount here will be significantly more than what the minimum repayment is on your banks. And they might suggest, you know, maybe $1000 every fortnight, which is denoted here. I'm saying Push it up to 3000 and this is what will get your mortgage paid off super quickly. This is calculated based on all your information and all your incomes and debts and all these other things and all these other settings specifically for you. So you can put this number towards your mortgage and be confident that you won't get pushed into that deprivation zone that I was speaking before. We you know, you're living off noodles and all that sort of stuff. So this is also the starting sort of suggested right after you do this and are a bit more comfortable with it. And you can sort of, you know, start to push your payment towards this below number here, which is hurtful e the 70% mark. So that's for entering in Aled the information. And once you've done this once, you have to do this once when you come back to actually monitoring your mortgage, you can actually just go to this dashboard tad each day. So Oh, go through this snail again. You should only be touching the blue sections. Nothing goes. All these other figures will automatically calculate for your personal expenses and your every day, you know, shared expenses. You know, individual expenses, how much money you have left over after you get paid and the mortgage comes out and your shared expenses come in, your individual expenses come out. You should still have a little bit left over. You want to try and minimize these amounts so they're pretty much no, I think you know, like if you've got your expenses or exact, they should be pretty much as close to zero as possible. And everything should be ticking along nicely on once you've ended all that information. It will also give you your current savings, right automatically calculated for years. You have to do it. And you can see these people in this example here that I've entered are running a 65% savings, right, which is pretty good. And down here, of course, again, we have your current mortgage, which will get updated by you. Each pay in, you know, each time you actually entering your mortgage. So to some degree, you might have to keep an eye on it. You might have toe update it, but it should mostly be automatic. It uses these dates that you enter Dean here. So this particular date here is the same as the one up here. And as time moves on, it will automatically pick out this figured too excited. This figure this figure and automatically update this year. So that may be a little bit different, but it should be pretty much exactly what it is each fortnight as you pay off your mortgage and it'll give your total net position if you also add in your bank account. Because obviously you might have $10,000 in an offset account. Hopefully not. Hopefully you've put that towards your mortgage, but you might have other money in other bank aunts. And so your total net position will be a little bit less than what your current mortgages. And again, you've got this big, bold reminder here telling you that you know, Rich and that this mortgages party number one to keep tracking it. Keep your eye on it. Keep this savings rate as high as possible and stay motivated for the full term. And underneath you get a nice pretty little graph here which shows you from the start date , which waas as we saw the first of January 2017. But it tells you exactly when your mortgage is gonna be paid off. If you keep these current repayments going and you keep this current savings right going and keep doing what this spreadsheet does, this is when your mortgage will be paid off on this graph is actually drawn from this table here. So if you want to get even more accurate, you can You can go through here and see, you know, maybe two years time, you'll be 40 years old and this is what your mortgage will be out. This precise figure and you can keep going and going. And eventually your mortgage or loan amount goes to zero and obviously want to start to go negative. That doesn't really mean anything. It means you paid off your mortgage to this part here. This is the exact date that these people will pay off their mortgage, so it will be in four years and 80 days. So that's a pretty damn good effort for what was it $300,000 knowledge? Yes, a $300,000 mortgage. So that's a pretty good effort. And as I said, putting 65% of their wage towards it does get a very good effort. And this is even that are, you know, mortar interest right now. So this is the spreadsheet, and these are all the fancy features that has try not to touch this tab that basically just has core information that you know, uses to calculate everything else. It's all white. You shouldn't be touching it unless you really sort of digging into it and know what you're doing with spreadsheets. And this date, as I was saying away our connection, we change. So you come in here and, you know, maybe you go Well, what happens if we get rid of you know my car and only keep partners Cartago from two cars down to one car, and you might delayed all these expenses cars and then jump back into this tab because it'll all have been recalculated in this loan date. Will now be way are here somewhere. You know, it might be there, for instance, and you can see that it's gone from, you know, four years in 80 days, all the way up to maybe three years and 80 days. So by deleting the car expense of just one car, you've reduced your mortgage by one year. And this is how you run those? What if scenarios Very, very quickly. As I said, just jumping into a tab, relating some numbers jumping into the are the type of seeing water calculate, you know, you can then assign to this. Kaya said, Wow, is this card is having this car really worth paying off our mortgage in, You know, whatever. It was four years versus threes. Yeah, full year just for having an extra car. Maybe you don't really care for that car that much and it's a bit of annoyance, and you kind of want to get rid of it Anyway. This might give you the extra kick to go. Let's get rid of that car. Let's get rid of this random expense that I don't care about because it'll mean will be out of power. Found mortgage far, far quicker. So those are some of the excellent features of this more mortgage planning spread should. It's, as I said, built from the ground up to kill your mortgage as quickly as possible and has a lot of different features to do this and has been refined over time, and I hope you enjoy it, so I will now get back to the usual course. 48. Section 14 - 2 - Even More Use Cases: Okay, so this is just a another small bit off fantastic Bernice material for you. So you may have noticed in the course that I made a reference to other use cases. So there's the use case off, obviously the very final chapter. However, if you want to go into more detail and mawr use cases, perhaps that one wasn't exactly fitting to your scenario. You can head over to the main website, which is Alex shulman dot com. Now here you're greater with lots of fantastic things, but among them is mutilate the mortgage. So you click onto here and simply scroll down to use cases. You will be jumped over to this page, which lists out all the use cases for a while, the different posts so he can hopefully say many different ultimate guides to use cases, which are 100,000 mortgages, 200,300 years and 400,000 mortgages. Say click. Whichever one is closest to you, I'm just going to go to a random example, which is the $200,000 mortgage. And once you come into here, you can see that there are multiple different options. So if you're on a single income or Jew income. If you have one child, no other Children, all the various scenarios that covered. And these are all for the $200,000 mortgage. So all these scenarios get covered for all the different 102 103 104 $100,000 mortgages. This is just an example with the $200,000. So imagine your A family who has jewels, incomes and that's to say, two Children. So you find your line and clicky up jumps down into your specific example where Joe incomes and No. One or two Children. So obviously, here you can see that I've listed out a after tax income. This is for Jewell. $60,000 incomes in Australia, using the 80 euros simple tax calculator. If you are outside of Australia, simply destroying your after tax income here and then divide by 26 4 the fortnight option. Moving on. We assume a 4% interest rate for that $200,000 mortgage, and from here I break down the individual budget and the actual results for all the different scenarios. So we were saying to Children so you would be looking at this line, we can say that I have an income of this expensive 1800 remaining off just shy of 1800 as well and a savings rate off 50% which is pretty fantastic. So with that savings rate, they can expect to pay off that $200,000 mortgage in roughly 4.7 years, which is pretty fantastic indefinitely well, under the 10 year mark. So these are all the different results for all the different options up. He have got single income, single income off 60,000 and on and on and on. It also covers all the expenses similar to the original example that's given in the final chapter. And from here you can go and have a look at many other things, like other miscellaneous first home buying tips, opinions and specific articles about how to exactly mutilate the mortgage with many other things. So take a look at the website, hope you enjoy the extra content, and I hope that these many different ultimate guides really narrow in on your specific use case. You know, maybe $360,000 mortgage was way, way too much for you. Maybe you only have $100,000 mortgage, and this one's a lot more applicable. But perhaps you have the $360,000 mortgage but have two Children and only a single income. You couldn't go through this one that whatever it is, there's 48 different permutations, So one of them is bound to get close to you. Sir, that's the extra use case is a bit of extra bonus material, and I hope you've enjoyed thank you.