Robbing Peter to pay Paul

Dave and I met a gentleman a few weeks ago at a fair we held a booth at. He was representing a super fantastic Debt Reduction Program, helping you to pay down your debt much quicker, thereby eliminating a lot of interest that you otherwise would have paid.

I said - but how can you pay down your (mortgage) faster without either refinancing (not an option for us) or paying more principle (also, quite a long shot for us). He said this program does not require either, however of course it was a -- "I can't just tell you now, but lets do a free evaluation of your financial situation." The program he's representing is United First Financial's Money Merge Account program.

I have to admit, he intrigued me. We have a whopper of a mortgage on the ranch so it goes to figure we have a lot of opportunity to save interest paid. He swore up and down that no extra dollars had to come out of my pocketbook to make this work. So we agreed to the analysis.

He started off with a set of videos explaining the program. It's based on using all available funds now to pay down higher interest loans, when you won't otherwise need the funds until next month or next week. So - float a loan to yourself for 30 days on an interest free credit card - pay your mortgage, and then next month use the funds you saved to pay back that short term loan. It was convincing enough of a scheme that we went forward.

Unfortunately, we have a very complicated financial setup - what with the businesses and our personal finances and Ginger's personal finances all intimately intertwined. So part of the challenge was just trying to figure out what pieces to include in the analysis and which to exclude. Since Ginger wasn't in on the deal, we of course left hers out of it. And I wanted to leave our personals out too - but that proved impossible to some extent, largely of which is because we subsidize the business with funds every month still.

He came back to us a week or so later with some truly fantastic claims. The program had calculated that using their system, we could payoff ALL OUR DEBTS, (Ranch mortgage, our Condo mortgage, 2 significant private loans and a small private loan) in a mere 11.2 more years, instead of the 25 years we have left on the mortgage. Saving -- are you ready for this?? $447,281 in interest. Yeowza - sounds great! All for no more dollars out of my pocket each month.

Of course there was the quietly interjected "as long as the analysis data we have is correct"... At which point I had to stop and say - there is no way we adequately modeled our financial situation in the 45 minutes we did that. For instance, we lumped my entire private salary into the pot -- and in no way am I donating all of that to pay the business expenses. And that's just the tip of the ice berg.

I insisted that I would also have to get my hands on the system and play with it in order to understand what it does. Actually I had commented earlier that it felt like it would double my accounting work -- for how could the system predict how much $ I had that was available to use for debt payment if it didn't know exactly all my income and outgoing each month? So I asked: Can I import data into your system from my bookkeeping system? "Sure you can, let me show you." And he proceeded to demo how one goes into the system a few times a month and updating lump sum values for the system to base it's calculations upon. Okay... good to know it doesn't need all the detail, but can I import that data instead of hand entering them? He admitted he had no idea what I was asking.

So we left it that we would need to do a lot more work on the model before I was willing to believe any numbers that his program calculated to me, and he went off to check to see how I could get some hands on time with the system.

In the meanwhile -- I've done some research. Interesting to note that by far the most hits when you google Money Merge Accounts - you get links talking about United First Federal and whether they are a scam or not. Generally the reports seem to lean towards they aren't actually a scam, but rather that what their system does is not rocket science at all and something anyone could do themselves.

Ohh, really? That sounds like a challenge to me. :-D

So I decided to poke around. PLEASE NOTE - I HAVE NO FINANCIAL EXPERTISE, EVERYTHING I SAY BELOW IS MY OWN CONJECTURE.

I got a spiffy new and cool Home Mortgage Calculator Template from Excel (yes, they've been around forever, but this one is all spiffy pretty and such.) And for grins I decided to figure out what would be required to pay off just the ranch mortgage in 11.2 more years -- the time in which "the program" promised I could actually pay off ALL my debt. Well, wouldn't you know it -- you can do it, for a mere $2800 in extra payments every month.

*scratches head* If I had $2800 extra every month, wouldn't I have noticed that? And regardless of how many fancy games you play borrowing funds from here and there -- I really don't see it possible to come up with that sort of gains, with no more $ coming out of my pocket.

So then I played with other scenarios of what I might actually be able to afford in terms of extra payments. Fascinating results: (to a data analysis geek like me)

Extra Payment	Total Extra $	Interest Saved	Saved to Extra Pay Ratio
$3,500 Lump	$3,500	$15,042	430%
$200 a month	$56,600	$87,329	154%
$2400 every Aug	$57,600	$91,329	159%
$10,000 Lump	$10,000	$42,037	420%

So it is clear that to get the greatest bang for the buck, you want to pay more extra payments early in the mortgage. In order to do that, I wondered, DOES it make sense to borrow from my HELOC temporarily?

Using the $10,000 example above, I looked at drawing down $10K from my HELOC - which currently is at 5.62% (My mortgage is 6.5%) Assuming I could pay back the HELOC at $1000/month for 10 months, I would spend a total of $266 in interest -- while saving an eventual $42,037 in interest. WOW.

Of course this also assumes the interest on my HELOC doesn't change drastically during that time -- but even if it doubled to 10% interest on the first day of my loan, it is still just $484 worth of interest. And if I could only swing $500 a month payback? Worst case was still less than $1000 interest. To save $40 Grand.

But, as long as I was assuming I could have that extra $1000 a month to pay back the HELOC, wouldn't it be easier to just pay the extra $1000 to my mortgage?

Extra Payment	Total Extra $	Interest Saved	Saved to Extra Pay Ratio
$1000 for 10 months	$10,000	$40,828	408%

Doing that yields a slightly less interest savings of $40,828 -- but has the advantage of not requiring ANY additional interest, AND no Loan Statement hanging over our heads forcing us to pay the extra amount if we have a tight month.

So in the end, I really can't be convinced that it makes sense to borrow money to payback other borrowed money (especially in our case where the interest rates are so nearly equal). Ultimately you can only pay down loans faster by paying more money to them - and the added hassle of additional loans to track isn't enough of an advantage to make it worth it in my opinion. And I DEFINITELY don't need to pay someone else $3,500 to tell me how interest works.

However -- I do have to say I'm thankful to the Gentleman above for making me look into these numbers. It really does seem to be too good to ignore.

Lords n Ladies n ... hogs

Last week was Glory War - our barony's biggest annual event. A camping event up in Wyoming, it is our version of the War we went to in Arizona last February. Of course 1/10th the size.

We didn't attend Glory last year - I participated in Coursers and Quivers in August, and we hadn't branched out to anything else much before that. (OK, this makes me laugh -- I hadn't even attended a populace meeting until August. My, what a difference a year makes!) But I quickly learned of what we missed out upon. As it is held over July 4th, however, it makes it a bit difficult for us to attend. But it is such a pivotal happening, we declared we would go this year, if at all possible.

The event was officially July 1-5, but we arranged to get released from the kennel midday Friday through Saturday. Drove up to the site in a quick 90 minutes, and had camp set up shortly after. Since it was to be a short trip, it was our intent to take the bare minimum of equipment possible. I think we succeeded there.

The site is gorgeous - rolling rocky hills - the terrain makes it necessary and natural to split into different clusters of camping areas. It nicely disguises just how many people are on site, and also fosters a sort of neighborhood feeling as the same folks tend to camp in the same spots year to year. The dining hall is set up centrally, and housed something like 12 large tables at once. The royal tent was set up at one end, and access to the kitchen tent on the other. Once again our resident household which loves to cook, handled running the kitchen which provided breakfast for all event attendees, and dinner for those who purchased it. The food was spectacular, featuring a whole roast hog on Friday night. As we attended a brewing competition that evening as well, the drink was just as notable.

It was during the bardic Friday night, that we got our first taste of the rain storms that had plagued the camp daily all week long. Already dark, it was coming down in droves when we remembered - huh. We left the tent windows wide open, didn't we? I took a mad dash down to the tent, which thankfully wasn't too far away. It was my first chance to test my wool cloak in wet conditions, and I have to say I was very pleased. It definitely got damp, but given the way the sky had opened up, it was remarkably dry. I folded it inside out that night to use as my pillow, and never felt the dampness soak through.

Saturday we broke camp early planning to get everything in the car so that we could easily make our escape that night after dinner. Turned out some other newcomers had arrived and were interested in our spot anyways, so we helped each other break down / set up.

One aspect of the trip was that we wanted to see how David fared sitting in the car, after his back surgery (which as of today is officially 6 weeks ago!) He stood the car trip just fine, but the sleeping on the ground was pretty rough. He was moving mighty slow the first half of that day.

And then.... The rain came again. OMG - it must have rained for an hour... and then quit and sprinkled a bit, and then full on rained again. Most of the afternoon. Our friends have a 10x10 booth tent they'd set their table up under, but had forgotten to bring their side-walls. Since we have the same tent, we brought our walls up, and boy were we all glad for that. Never the less, we had a lot of folks milling around under that little tent, waiting for the rain to let up!

In all honesty, I was getting a real kick out of the rain. I didn't have anything to do and we were quite comfortable sitting around shooting the breeze. Just the chance to sit still for a change is a welcome respite. And I was amazed at how few puddles were collecting - the soil just drained everything away. So as soon as the sun would come out it was beautiful and mostly dry immediately.

We'd been warned that Court that evening would be long and involve a lot of business as it was a full on royal court with not just the King and Queen of our kingdom, but also our Baron and Baroness as well as those from the 3 other nearby baronies. Court is where most awards and thank yous and other announcements are made. Folks are called up by the Herald where upon they approach the royalty who called them up, kneel, receive some words of wisdom (or something -- you typically can't hear this part), and then the Herald reads aloud the official proclamation and everyone cheers. In the past year, we've sat through dozens if not hundreds of such repetition.

This time our names got called. *gulp*

By the King and Queen.

I'm terribly self conscious and generally hate being the center of attention... talk about stage fright. I don't really recall much about being up there aside from feeling like we bumbled a lot - didn't kneel right, stood too soon, etc. I remember distinctly the King whispering to me -- "Have fun with it", which made me laugh and wonder if I looked just as terrified as I felt. I'm also horribly sentimental, so of course I was unable to stem the tears. The queen hugged me. I think the King did too?

The upshot was that we each were given an Award of Arms (A0A). This is the entry level award, for people's contributions to the society. Nominations are made anonymously, and the Crown decide whether to award as well as when and where to deliver them.

I was so relieved that we actually made it to Glory instead of backing out like we'd thought we might. HANG ON -- NOW I remember someone coming upon us when we were packing our campsite asking - aren't you going to stay for court? Ah, if only I were quick to catch on...

The most obvious effect of getting an AoA is that it means we are now to be addressed as Lord and Lady (capital 'L's) instead of the generic m'lord and m'lady. Unfortunately the scroll, which is hand made for every such award, was not yet available. I am eager to get it -- so that I can read it and know what was said while I was in my panicked fog. :-D

After dinner Dave told me he had brought the hitch and ball for our Subaru, and that Helene did indeed need someone to tow the hog roaster back home. So we hooked it up. It was with a somewhat apologetic look that she told me that they had not yet had a chance to take care of the ... leftovers inside. But not to worry she said, she'd come by Monday to take care of it. Don't be silly, we said. And that's how we came to bagging our first hog.

~~~~~~

Seeing as how we recently had to renew our membership the first time, and our Champions event is rapidly approaching again in August, I'm conscious of transitioning from newby members who are continually attending an event for the first time, to anticipating what this year's event will be like and how will it compare to last year's. In other words, it's a whole new ball game for someone like me who just feels more comfortable being able to anticipate what to expect.

And yet - there are still so many things I want to try. Brewing is undoubtedly high on my list, as is joining choir and giving the bardic arts a whirl. People ask what do I do in the SCA that isn't Equestrian based - and I have to say there is still so much I want to do to bring my equestrian persona up to speed that I have not yet devoted my attentions elsewhere. But that is precisely what makes the SCA so exciting to me - the vast number of choices of fun things to do.