..:: Tested Theories ::..

Theorium Name: Leveraged Home

Goal: Pay off debts or home, by leveraging your equity

Items Needed: Home, Equity, HELOC, low-interest credit card, job, understanding of finances

Conceptual: This is to use the equity in a house to pay principal down quickly, effectively saving money of time or MoT. First, you pay your whole check toward a bill. From there you live off the Credit Card, remembering budget practices. Once your Credit card bill is due, you pay it off by your HELOC. The next couple of cycles you put the paycheck toward the HELOC, while still living off your credit card. In two or three cycles the credit card and HELOC are zeroed out, start over again.

For most people MoT is what catches up with them, the amount of money spent wasted on interest rates and time. This process is to lower and eventually eliminate it.

The test performed is as below.
Car amount:  6,000 roughly 6-7% interest 3 years left
Water Filtration: 12,000 roughly 14% interest, 5 years (I would say avoid at all cost clearwater loans)
Windows: 10,000 roughly, 14% interest, 1 year same as cash
Roof: 11,000 roughly, no interest paid out.
Total debt: 39,000 debt target over 2 years

I started this 2 years ago, and have cleared close to 40,000 in debt. Clearing the way for the process to go to the house, which still has 70k left on it. The process works, however, there is one flaw. As you get used to living on Credit Card one tends to forget budget, so that is key to remember things. The above does not tell the whole story either, I still have electric, house bill, truck bill, for 1 year HELOC Insurance (not worth it), and auto insurance. So there was money going out just in daily life stuff as well. This essentially shows I can clear roughly 20k in debt destroying power a year, pending issues.

Roughly 5 years to pay off the house, saving an immense amount in just MoT power. At this time due to the roof, I have suspended the aspect of this structure and returned to the traditional methods in order to build up savings.

In the last 2 years, I have probably spent about $200 in interest rates to leverage the whole paycheck to clear various bills and save in MoT. So I would say this method is well worth it in the long run. I do plan on going back to it once I have 6 months back into my savings.

One other thing this did was increase my FICO exponentially.