Did you know there is a ‘secret’ way to pay off your mortgage early? No doubt you’ve heard ads on the radio willing to sell you this secret for only thousands of dollars.

Guess what? I like you, so I’ll tell you for free.

How to Pay Off Your Mortgage Early

Before you start paying extra on your mortgage, make sure you’ve 1) paid off all other consumer debt, 2) have at least a 3-6 month emergency fund, 3) begun investing in your retirement, and 4) saving for your children’s college

Yes, you do want to pay off your home early, this is a key to wealth building. You’ll lose your tax deduction, but it’s not worth staying in debt and paying interest to get a tax deduction.

If you have a paid for house, just think of what you can do with all that money! You can pay it off early with a simple little trick.

I’ll assume that you already have a fixed mortgage of 15 or 30 years that is around 25% of your take home pay.

Also, if you have an ARM and plan to stay in your home for another few years–Now is the time to refinance and get a lower %–even if you have to pay 1 or 2 points

Bi-weekly House Payments

This is the ‘secret’ that you hear many ads on the radio about. They’ll try to sell you software that magically helps you pay off your mortgage early. Bi-weekly mortgage payments.

It’s not magic, it’s math. If you pay bi-weekly, you’ll end up making an extra payment per year and thus paying off your mortgage early. You’ll also be knocking out interest, so more money goes towards the principal balance.

Could you end up paying a 30-year loan off years faster with this method? Sounds crazy right?

Let’s look at an example below. If you want to figure your own bi-weekly amortization schedule try bankrate.com.

Bi-weekly Payment 30 Year Mortgage Year Example

In our 30 year example at 5% you’d save $44,417.33 in interest and end up paying off your mortgage about 4 years early.

Mortgage comparison

Monthly payment:

$1,342.05

Biweekly payment:

$671.03

Total interest:

$233,139.40

Total interest:

$188,722.13

Avg interest each month:

$647.61

Avg interest each biweekly period:

$241.33

 

 Tips for Setting Up a Bi-weekly Payment Schedule

  • Make sure you don’t have a penalty for paying off your mortgage early. If you do, you’ll have to crunch some numbers and see what your break even point is.
  • Be certain the extra payment goes to principal and not to future interest. Your goal is to take a chunk out the principal with this method. The banks want you to keep paying.
  • Check with your specific bank or lending agency to see if they use a 3rd party to administer their bi-weekly payments. There is sometimes a set-up fee to get on a bi-weekly schedule.
  • Monitor your mortgage statements to make sure they are applying your payments correctly.

Have you set up or thought about setting up a bi-weekly schedule? 

Photo Credit  j l t (Creative Commons)

I hex Catan

Photo Credit Will Merydith (Creative Commons)

If you haven’t played the German board game, The Settlers of Catan, you are missing out.

German board games are all the rage among both geeks and hipsters alike. *Warning they are addictive and make you use your brain.

Even if you’ve never played The Settlers of Catan, I think you’ll learn to win with money by playing this crazy fun game.

What is The Settlers of Catan?

The basic premise of The Settlers of Catan is to be the first to achieve 10 points first. Sounds easy enough.

You’ll gather resources: Wool, Grain, Lumber, Ore, Brick and then use them to build cities & roads, buy cards, and of course trade.

Settlers is a bit like Risk meets Monopoly, but shorter. You’ll be able to play in an hour once you learn the rules. Trust me this a game you’ll want to play over and over again. Check the official rules if you’re super geeky.

 

Catan gameboard

Settlers of Catan Island (Photo Credit ginnerobot)

10 Reasons Why Finances Are Like The Settlers of Catan

1) The Game Changes- The island is never the same, so each game is unique. Also, the game changes due to the robber or due to the strategy of other players. With personal finance, you’ve got to be ready to change your budget when things come up or changes in your personal economy happen. Be flexible and don’t make epic budgeting mistakes.

2) Trading with the Bank is the last option- In Catan you’ll be able to made trades with the bank, but at a terrible exchange rate of 4:1. Look for other options with your money than trading with the bank. Avoid debt. Paying with cash is best. Remember the bank is the real winner.

3) Protect Your Money Making Hexes– In Catan, you’ll find that you’ll have several hexes that are money makers, so you’ll want to protect them from the robber. Have insurance in place for your finance to protect your income and belongs. Make sure you’ve got disability insurance, health insurance, life insurance, ID theft insurance, and homeowners insurance to keep money flowing when bad times happen.

4) Build a Long Road– Having the longest road will give you 2 victory points. Once attained, it’s tough to keep. Play your financial game for the longest road, not the quick short gain. Invest for the long term 5+ years at least and build a long road toward your financial and life goals.

5) Winners Barter With Friends- The people who usually win Settlers of Catan are excellent traders. Those who win with money, also play well with others and trade or barter information and even business opportunities. Find people in your life who know how to make and use money properly and soon you’ll be on the fast track to 10 victory points.

6) Fear the Robber-If the robber is camped out on your hex, you won’t collect cards. Keep an emergency fund of 3-6 months of necessities so you’ll be able to survive when the robber is camped out on your life’s hexes.

7) Diversify your Hexes (Income)– You’ll need multiple resources to win in Catan. It’s almost impossible to win with sheep alone. Diversify your income with side hustles, dividend income, rental property, or other means of passive income. If one stream dries up, you’ll have other income that continues to roll in.

8) Teaching Others Will Improve Your Skills- The best way to hone your game skills is to teach your friends or family. I’ve found that as I write and teach others about money, my money skills become sharpened. Find someone to teach and start. Your kids are a great place to begin, since you’ll have to break down complex ideas into their basic building blocks.

9) City Life Is Good– Upgrade from a settlement to a city will give you 2 points and double the resource cards. City life is good, with more opportunities and higher wages.  If you’re having trouble with your low income, perhaps its time for a move to the city, where more job opportunities lie. It’s hard to budget, when your income is too low.

10 Invest in Culture– When you buy cards, you might just get a culture card that is 1 Victory point. Invest not only in financial products, but in your education, family, learning, and cultural entertainment. Life isn’t all about money, so make sure to have fun and learn along the way.

#11 Bonus Having Fun Doesn’t Have to Cost a Fortune– A small investment into a family board game will yield compounding dividends of fun and family bonding. Likewise starting a business doesn’t have to cost a fortune and can lead you to follow your passions that solve others problems.

Play Settlers of Catan

If you’re interested in playing this game and supporting this site, feel free to purchase The Settlers of Catan or one of the Catan expansion sets.

Need to learn how to play? Check out this tutorial.

Have you played Settlers of Catan? What life or money lessons did it teach you? 

Have you ever had a financial advisor who told you to NOT invest?

I did and I’m thankful for that guy who saw me as a person who needed wisdom and not as another monthly commission check.

Thank You Street ArrowAn Honest Financial Advisor?

I was in grad school full time, working part time, and seriously dating my future wife.

Back then I was just learning about money and listening to Dave Ramsey while exercising or commuting.

I must have missed the whole baby step thing, because I had it in my mind that I needed to start investing. You see I found my old retirement account from my day of being a teacher and thought I needed to do some investing with it.

One day I wandered into an Edward Jones office in one of the richest areas of San Francisco with the paperwork and intent of becoming a serious investor. The main advisor happened to be in and agreed to meet with me there on the spot. He proceeded to give me an hour long investing lesson using a white board, explaining load and no load funds, compound interest and more.

He talked to me like a person without condensation or judgement. This is an essential quality in choosing a financial advisor. 

At the end of his lesson his advice was for me to NOT invest my retirement in other funds, but to use a small amount to pay off my grad school loan and be debt free with a new degree and a bit of retirement saved.

I was astonished. Did he actually turn down my business? Did he tell me to not invest and do what I came in here to do?

He showed me the door and I was left to my own thoughts.

Not Investing Was a Great Decision

In retrospect, not moving my retirement around was a great decision that day. I had no idea what I was doing. Nor did my life situation warrant beginning to invest at the time.

I did end up cashing it out later to pay off my small graduate school bill, help pay for our wedding, and started our new married life with a little emergency fund.

I am thankful for the honesty and integrity of that financial advisor who told me “No”.

He chose to forego a quick commission check (though I’m sure small to what he was used to) in exchange for helping a misguided graduate student stay out of the market right before the great recession and market crash.

Had I invested, the money would have been reduced to 1/2 its value at the time I needed it most.

Thank you to honest financial advisors who understand their fiduciary responsibility and have their client’s best interest at heart.

How has your experience been with financial advisors?

Lego CrossFit Gym. Credit

Lego CrossFit Gym. Credit JeffGamble

I’ve become intrigued with making a DIY home gym.

Why? Maybe it’s because I’m nearing my 35 birthday and a year of sitting and blogging has paid its toll to my physique.

Maybe its because I wrote an article last year called CrossFit Your Finances that began my fascination with CrossFit.

I’m cheap and unwilling  to pony up the cash to join a CrossFit gym or pay for expensive equipment.

Why couldn’t I just do it myself?

Gym Memberships Are Expensive and Sweaty

Unless you are my friend who locked in his $1 a month L.A. fitness membership for life when he was in 8th grade…gym memberships are expensive.

I rather like going to gyms, but then there is the other thing: people with their egos, lingering on equipment, sweating, and ogling each other.

Plus going to a gym takes time, preparation, and energy to travel each day.

If you are going to engage in any sort of grunting or throwing weights around–you’ll get kicked out a gym in 10 days or less. 

Since you’ve been kicked out of your gym or if you’re just too cheap to pay for one (like me) then it’s time to look at DIY home gym options.

The Advantages to an at Home Gym

If you have the space, then a home gym could be a real option.

Even if you are a cramped urbanite, there could be space in your parking garage/lot, nearby park, or friends house where you can have a small portable gym.

I believe there are many advantages to having a gym at home (besides money):

  • Location Location Location– Hey you can’t complain about traffic when your workout is only steps away. 
  • You Make the Rules- You can’t get kicked out of your own home gym. You make the rules, so if you want to yell and grunt you are the boss (as long as you don’t wake the wife and kids of course).
  • You’re Only Limited by Your Creativity- No money isn’t a huge factor in a home gym (ready below), and if you want to have a gym or system…you can build it.
  • If You Build it They Will Come- If you build a killer home gym, your friends will inviting themselves over and you’ll have no shortage of lifting partners + you can kick them out if they don’t follow your rules 🙂

DIY Home Gym Questions

Now that we have motivation established for creating a home gym, let’s look at a few important questions.

Where you good at legos as a kid? If you weren’t then maybe building a DIY home gym might not be an option and you’ll need to purchase most of your equipment.

What are your fitness goals? Fitness goals will drive the equipment and design of your at home gym.

Did you talk with your spouse, roommates, or landlord? Ensure you have the legal right and permission to build a home gym. If you plan on sharing the home gym–agreement on equipment and design is essential.

Do It Yourself Home Gym Resources

I’ve been scouring the interwebs for DIY home gym resources and how to make exercise equipment DIY style with a crossFit focus.

Hopefully, I’ll be making some of this equipment and expanding my space soon–a corner of an old warehouse–with some of the below DIY equipment.

End of Three Fitness- Jerred has created and tested all of this equipment at End of Three Fitness with several cool DIY exercise equipment designs:

  • Parellettos out of PVC pipe
  • Power Rack out of wood and pipe – I love this design!
  • CrossFit Rings out of PVC pipe and lots of glue and tape.
  • Plyo Boxes
  • Wall Ball
  • Squat and Benchpress
  • DIY Prowler Sled
  • DIY Kettlebells
  • Pull up bar out of your attic trap door–smart!

Kettle Bells

More DIY options for homemade Kettle bells Link 1 Link 2

Sandbags

Make your own sandbags to carry around and get strong from Nerdfitness (guide and workout).

More Resources for Home Gyms

I hope to have links to my home gym soon with a few pieces of homemade equipment.

Have you built a home gym before? Please share tips, advice, and resources below in the comments!

lego robber

Your financial security question answers are on Facebook = a hackers dream Photo Credit: Smile its lego via Compfight cc

Recently we opened a new financial account and had to dream up answers to the financial security questions. You know the series of questions that are asked if and when you can’t remember your password. I’m not the only one who’ve lost their most important passwords right?

Those questions are often random, yet many of the traditional answers to those questions can be found on Facebook or social media profiles, especially for those in the younger generations whose whole life is chronicled by the Inter-webs.

Concerned? You should be!

How Hackers Can Hack Your Financial Accounts Through Facebook

This shouldn’t come as a newsflash. Hackers are trying to steal your identity and money; it’s happening every single day online–offline too through your snail mail.

One easy way to find the answers to your financial security answers are through Facebook or other social media.

Think about a few of the popular online security questions I’ve seen recently:

  • Your mother’s maiden name: Time to talk to your mum about changing her name online, or maybe you’re uber paranoid enough to defriend your mom. Who would even consider that?
  • You High School? High school colors? High school mascot?: Easy to find on your Facebook timeline or maybe even by searching your Twitter archives.
  • Best friend? First best friend? These answers could be found on Facebook or maybe even that old Xanga blog you abandoned years ago.
  • Hospital of Birth? This shouldn’t be too hard to guess.
  • Favorite song? You still have that old My Space account active?
  • Favorite book? Good Reads profile or Amazon wish list or even your profile on Yelp. Speaking of Yelp, that’s a treasure trove of information about where you live, shop, frequent…etc. I bet a hacker could mine that information too!
  • Favorite Movie? Easy- Spaceballs! Another easy one to glean from Facebook.
  • First Boyfriend/Girlfriend? For those in the younger generation, there are probably hundreds of online exchanges between your first significant other online.

Are you freaked out yet? I am. Maybe I should do a yearly audit on my social profiles to scrub any information that hackers could use to claim my identity. I try to keep up with the latest Facebook privacy updates, but it’s tough to keep up. Good thing I believe in identity theft protection.

What are your thoughts about identity theft and the possibility that the answers to your financial security questions are on Facebook?