# How We Do It

## Our passion is for the success stories of our clients!

I believe you should tell the truth then prove it. Don’t let the math or charts scare you. This is simple stuff. Here is how a mortgage is broken down into easy to understand simple math.

 Mortgage Amount: \$50,000 Interest Rate: 6.00% Payment: \$300

In this example, if the house sold for \$60,000 with \$10,000 down and a loan of \$50,000 at 6% for 30 years, the payment is \$300.

Of that amount, \$250 is applied to interest. Since the bank gets to keep this money, it is profit and \$50 is applied to reduce the principal (cost). If you divide the principal into the interest you will see that you paid 500% interest. If the loans goes for 30 years the bank makes 116%. In other words, for every \$1.00 in principal paid, another \$1.16 is paid in interest.

Timeline Profit Cost Balance Profit (Pct)
1st Month \$250.00 \$50.oo \$49,950.00 500%
5 Years \$14,514.00 \$3,473.00 \$46,527.00 418%
30 Years \$57,919.00 \$50,000.00 0 116%

Line 1 is the first month’s payment of which \$250 went to interest and \$50 went to principal. Remember, we agreed on how to calculate interest (divide principal into the interest) \$50 divided into \$250 = 500%. That is a mighty fine return on investment.

Look at each line and you will see that the longer the borrower keeps the mortgage note, the worse the bank’s return gets. But don’t worry: even if the mortgage note goes for the whole 30 years the bank still makes 116% (30 Years Profit).

I know it sounds too good to be true but that doesn’t change the facts. This isn’t some new type of insurance or new type of mutual fund; this is something that’s been around for hundreds of years. Even though you think people have been investing in the stock market for a long time it wasn’t until the 70s when the general public started investing in the stock market. More people have made more money in banking than has ever been made in investing in somebody else’s company.

Banks have figured out how to make a lot of money: they simply lend it out and take collateral at a good loan-to-value, make you pay them back with a simple interest fixed rate and, if you don’t pay them back, they take your collateral.

It doesn’t matter to the bank what the stock market does, it doesn’t matter to a bank what the price of oil is, and it doesn’t matter to the bank what the interest rate is.

The only thing that matters to the bank is if you don’t make the payment on time they can take your collateral.

In an annuity or insurance policy, you most likely don’t understand all of the rules, fees, and charges. In a mutual fund, past performance is no indication of future performance and you could lose your principal. How can you plan your financial future if you do not know how much your money is making?

## J.W.

Call J.W. at 512-308-3869 to discuss how mortgage notes will help you build a solid financial portfolio.

#### Watch the video below:

How To Use Mortgage Notes in The Coming Perfect Financial Storm.