It’s simple!  If you know what’s important…  We start our official Beta release of WMT with a little bit of anatomy.  No, not human, but WMT anatomy.  Another term we should get used to is architecture.  Just like a physical building, this WMT site has an architecture, and the cool thing is that all of the building materials are free.  Come to think of it, most of the tools we use to build a site like WMT are free also.  So what’s the big cost?

Originally Posted Thursday, February 5, 2009 at 9:20pm on facebook.com/BoomersEdge

Why do you think the Aussies were partying it up at the Aussie Open Tennis Tourney only a week ago now….when they are no more immune to this worldwide economic recession than us American’s??? My guess is that it has something to do with the fact that 1/3 going on half of all Australian homeowners “cycle” their mortgages.

The interest rate on my HELOC (Home Equity Line Of Credit) just hit 3.25%…. I’m amazed at how low it has become. It presents one of the best opportunities ever for people with some equity left in their homes (and I am not one of those unfortunately).  Homeowners can get an unbelievably high ROI (Return On Investment) on their incomes, even if you have very little or no FCF (Free Cash Flow) or “discretionary income” left at month’s end after paying all the bills.

If you have 20% equity in your home (at these deflated prices, maybe only 5 to 10% is needed), and decent credit, you should take a hint from the Aussies and “Mortgage Cycle”. All you have to do is get a HELOC if you don’t already have one, and deposit your paychecks (if both you and spouse work) directly into your HELOC. Pay your bills on a credit card or out of a minimum bank balance, and then pay back that amount equal to your monthly expenses, including first mortgage payment with a monthly withdrawel from your HELOC. Pay down your first mortgage in 5K, 10K or 15K chunks every six months or so from your HELOC at the same time. The amt. and time period are the only variables you will need to adjust over time., and you will be eliminating huge chunks of mortgage interest on your first mortgage on a monthly basis. The resulting “reverse compunding effect” on your first mortgage paydown will represent a huge ROI compared to any other use of your free AND EARMARKED income!

It is really that simple. If you have positive cash flow, or even break even cash flow, you will probably be earning more on your salary alone by doing this, than you will return on your 401K, Roth or pre-tax IRA over perhaps the next decade. The process is called mortgage cycling. It uses what I call “reverse compounding” on your mortgage principal interest and balance. If you can replace your first mortgage with just a HELOC at 3.25%, your ROCF (Return On Cash Flow) will be phenomenal!!!

Ironically, I am looking at a book on my bookcase shelf by (the MSFT) Bill Gates titled “Business At The Speed Of Thought” which he wrote maybe 15 to 20 years ago. He was right on about what is actually happening today relative to the capability for instantaneous information flow. Yet he had to step down. His MSFT is mature and in big trouble of being able to grow at all, but has a stockpile of cash, and is taking it over to Yahoo in boatloads, to invest in a dying 10% mkt. share search business.