The Game You Play Is Putting You In Debt

Would you like to play a game…A famous line from an 80’s flick about an artificial intelligence that thinks that it’s playing a game, when in our reality, is about to blow up the world.

The game you’re playing is Financial Life.  And sadly, most of us are losing.

Think about this.  I can use several scenarios when you started a game.  In this case, we’ll call it The Mortgage Game.   Most Americans believe that buying a home is one of life’s biggest goals and that financial security comes by following the American dream.  It does, but…

I want you to think of when you bought your first home.  Typically, you and your spouse start looking for that perfect house.  You do a little google research and find out that you need to find a mortgage lender that gives you an economical range that you can afford. Check. Then you call a Real Estate agent and begin your journey of bouncing from house to house looking for “The One”.  Maybe after a few months of searching, finding flaws in this one or that one, you finally come across what seems to be the perfect compromise for the two of you.

Then comes the part where most of us forget to read the rule book.  The signing of the mortgage loan.

Side note – if you like games try Cashflow from Rich Dad.  It’s an eye-opener.

We sit down with the mortgage lender and real estate agency and go thru what seems to be a mountain of paperwork. They remind you that if you would like to have your very own lawyer present, it will help. Sign here, initial there.  It’s all pretty standard they say.  As you’re getting writer’s cramp from all of the signing, they show you the amortization schedule and you coolly nod thinking, I got this.  Reality is, you only see the monthly payment and nothing else.

Because, let’s be honest here, at this point in the game, you will sign anything to get this mind numbing process over.  You’ve got the furniture picked out, the moving truck scheduled and you’re ready to take possession of your new home, you’re not focusing on what you’re signing.  You just “know” that it comes with the territory of buying a new home.

So, you’re in your home, the dream has begun. That first mortgage payment comes and BAM!, you’ve got it.  Six months in to that payment and it hits you that you will be making the same payment for the next 29.5 years. YIKES!   Then you realize all that money you saved for the down-payment, initial costs, new furniture and décor is drying up, fast. Now you realize it is time to start saving again so you can continue to make the payments you promised to when you signed on the dotted line, initialed everywhere and signed again in triplicate!  What did you get yourself into?

Five years in and you see all these great offers for a lower interest rate and monthly payment so you decide to refinance and start the clock all over again.  Yep, you’re back to 30 years. Did you know the closing costs you paid out would have made a good dent in your principal and reduced the interest payments on your first mortgage? Nobody tells you this. Why? Rules of the game. Mortgage lenders are a business.  The goal of a business is to make money by offering lower rates and payments at the cost of your nest egg (if you even have one) and your time. Rinse and repeat.

I’m sure you’ve heard of an amortization schedule. This is the part of the game that really sucks. Take a moment and plug your numbers into our calculator and see how much you’ve paid in interest verses principal. This is surely when you’ll want to flip the game board. Time for you to make a move at winning this game. How?  It’s about learning the tips and tricks the banks use to make money and start using them to reduce your debt and increase your bottom line. With the Smart Debt, all-in-one financial GPS you have a tool that helps you eliminate loan debt, budget your money, and build your wealth.  Smart Debt walks you through the 4-step qualification process. We don’t hide the rules of the game. It doesn’t cost you anything to see if you qualify.  Are you ready to control the game?