Comments on: The Automatic Millionaire: Automatic is in the Details http://www.penny-saved.com/2006/07/13/the-automatic-millionaire-automatic-is-in-the-details/ Personal Finance and Wealth by the Penny Mon, 06 Oct 2008 20:20:17 +0000 http://wordpress.org/?v=2.6.2 By: Kevin http://www.penny-saved.com/2006/07/13/the-automatic-millionaire-automatic-is-in-the-details/#comment-160 Kevin Tue, 18 Jul 2006 22:37:07 +0000 http://www.penny-saved.com/2006/07/13/the-automatic-millionaire-automatic-is-in-the-details/#comment-160 I have serious reservations about David's "pay off your mortgage earlier with bi-weekly" payment scheme. First, is that it is all too common for the bank to want to charge several hundred dollars to set this payment scheme up. That's outrageous! Here's a free method: Add an extra 1/12 of extra payment to your monthly payment. Most likely your little coupon book the bank gave you has a line on it for Extra Principal. This too results in the equivalent of 1 extra mortgage payment per year. And best of all, it's simpler and FREE! My second problem is that many of us bought or refinanced when mortgages were extremely low. My mortgage is a 4.25% 30-year fixed mortgage. I can buy 5-year term CDs today at 5.75% and stick them in my Roth IRA. I get the same tax free growth, but at a much higher rate! Why should I turn down an extra 1.5% guaranteed rate of interest? I have serious reservations about David’s “pay off your mortgage earlier with bi-weekly” payment scheme.

First, is that it is all too common for the bank to want to charge several hundred dollars to set this payment scheme up. That’s outrageous!

Here’s a free method: Add an extra 1/12 of extra payment to your monthly payment. Most likely your little coupon book the bank gave you has a line on it for Extra Principal. This too results in the equivalent of 1 extra mortgage payment per year. And best of all, it’s simpler and FREE!

My second problem is that many of us bought or refinanced when mortgages were extremely low. My mortgage is a 4.25% 30-year fixed mortgage. I can buy 5-year term CDs today at 5.75% and stick them in my Roth IRA. I get the same tax free growth, but at a much higher rate! Why should I turn down an extra 1.5% guaranteed rate of interest?

]]> By: G http://www.penny-saved.com/2006/07/13/the-automatic-millionaire-automatic-is-in-the-details/#comment-159 G Thu, 13 Jul 2006 21:25:55 +0000 http://www.penny-saved.com/2006/07/13/the-automatic-millionaire-automatic-is-in-the-details/#comment-159 I've heard of a similar way to pay off your mortgage in half the time. Pay the same amount that you pay for your mortgage to principal each month. It should cut the time it takes to pay off your mortgage in half. I’ve heard of a similar way to pay off your mortgage in half the time. Pay the same amount that you pay for your mortgage to principal each month. It should cut the time it takes to pay off your mortgage in half.

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