The Debt Sentence: How the Banks Have Got You For Life
Banks are—not to put too fine a point on it—creeps. You think you’re getting a terrific deal, but you’re actually being fleeced.
You know the ads they run where they try really hard to sound like they care? “We’re here for you.” “Always by your side.” “With you all the way.” Well, of course they are, because without you they can’t make all those fat profits off your ignorance.
They know that you don’t know how they do what they do and they take advantage of that. They’ve got you by the you-know-whats, and they know it and you know it but nobody seems motivated to do anything to set themselves free.
Which may mean you get stuck with them for life.
I met a lovely couple recently, early forties, to show them some loan options. They liked the huge amount of money our (non-Big Bank) offer was going to save them, but get this: they were concerned about making the change because they felt bad about Tracy who had helped them at the local Big Bank Branch! This, despite demonstrable savings of more than $4000 each year. Madness.
Your banker, likeable though they may be, doesn’t care about you. They care about their family, their friends, their hair, their leather bucket seats, but most of all they care about their commissions and trailing commissions.
It’s baffling that the majority of people will spend a full day trudging the city streets looking for a great deal on a jumper or jeans or jacket or whatever, and don’t care who we buy from providing the item is on sale. These same people spend literally weeks shopping for a car, but will not commit half that time to finding a lower interest rate for their mortgage—potentially saving them tens of thousands over the lifetime of their home or investment property loan.
If you have a mortgage on your home—and you probably do—your job is to pay it off as fast as you can.
One of the simplest ways of doing this is to get yourself on the lowest possible interest rate and get yourself budgeted to the point where you are paying the maximum amount possible as frequently as possible. But here’s the thing; your bank is not offering you the lowest rate available.
There are more than thirty (yes, 30, three zero) lenders out there all licking their lips for your business. Thing is they don’t have marketing budgets that eclipse the GDP of Greece, so fewer people know about them. Also, many of these (sometimes very, very good) lenders only offer their products through a network of industry professionals such as mortgage brokers, financial planners and accountants.
We call this ‘wholesale’ lending.
These lenders might be what the industry terms ‘non-bank lenders’ (even though they borrow their money from other banks) and they do exactly the same thing—lend money—but at lower, more competitive rates. Usually these lenders don’t have the infrastructure to maintain nor shareholders to pamper, so the rates they offer are sharper, potentially saving you a huge amount of money.
How do you get on the fast track to becoming mortgage-free? You need an adviser who can introduce you to lenders who offer the lowest rates, then you need that adviser to help you understand how to maximise your cash flow to minimise the interest calculated on your loan every single day.
Banks and many mortgage brokers are quick to point out that it’s all about low interest rates–which in some situations it can be. What I reckon most people really need is the lowest available rate AND the best advice, to ensure you’re maximising the effectiveness of every dollar you earn. It’s more about cash flow management – and it’s critical.
Please don’t get suckered into extending your loan term because the repayments are lower. Doing this you’ll pay more interest, and the banks win again. Suck it up, confront that debt and pay off the absolute most you can afford. Deny the bank the chance to separate you from your hard-earned cash and keep you their mortgage slave for life.
At a guess, much of this makes a lot of sense to you. But with life inevitably in the way, how on earth will you ever get around to finding the lowest rate, then learn the tricks you need to maximise your dollar? It won’t happen.
But with Clover Partners, it can.
We show you how the smartest people get ahead, then do all the work for you. No gimmicks, no tricks, no catch. We’d love to help, so drop us a line however and whenever you can.Want more insight? Give us a call on 1300 823 995 or touch base below