Experienced Investors will ask the following questions when evaluating a Potential Investment:

• How Liquid Is It?

(Can I get my money back when I need it?)

• How Safe Is It?

(Is it guaranteed or insured?)

• What Rate of Return Can I Expect?

Home Equity fails all three tests of a Prudent Investment.

Equity has a Zero Rate of Return.

Since the Equity in the Home has no relation to the Home’s value, it is in no way responsible for the Home’s appreciation. Therefore, Home Equity simply sits idle in the walls of your Home. It does not earn any Rate of Return.

If we allow Home Equity to remain idle in the walls of our Home, we give up the opportunity to convert idle “Make Believe Dollars” in the walls of your Home into Dollars that will GROW AND COMPOUND in separate Asset Accumulation Accounts. “Make Believe Dollars” are idle Dollars that lose value while Equity invested into Asset Accumulation Accounts creates greater Wealth.

Assume you have a Home worth $100,000 which you own free and clear. If the Home appreciates 5%, you own an asset worth $105,000 at the end of the year.

Now, assume you had separated the $100,000 of Home Equity and placed it in separate safe and conservative Asset Accumulation Accounts earning 8%. Your Asset Accumulation Accounts would be worth $108,000 at the end of the year.

You still own your Home, which appreciated 5%. Also, since the Home Loan Interest is 100% Tax-deductible in most cases, the net cost of the money is only 3.6%.

This produces a 4.4% positive return between the cost of the money and the earning on that money.

Home Values Fluctuate Due To Market Conditions, Not Due To The Home Loan Balance.

By diversifying you get more Safety, Security and Liquidity, create an Investment Vehicle that will materialize your financial goals without restricting your current Cash Flow.

You know the concepts that we teach focus on the need to Optimize Assets. When Homeowners stop sitting on their Assets and reposition idle “Make Believe Dollars” in the walls of your Home into real Dollars in Liquid and Safe Asset Accumulation Accounts a Mortgage Payment is created. The payment is considered the Employment Cost.

Wouldn’t it behoove you to Refinance, maybe every three years or so?