WEBVTT - 7 Ideas To Pay Off Your Mortgage AS FAST AS POSSIBLE! 0:00:00.040 --> 0:00:02.840 Good morning, everyone, and welcome back to another episode of 0:00:02.920 --> 0:00:06.560 Sugar Mumma's Fireplay. I am your host's financial planner, Canna Campbell, 0:00:06.559 --> 0:00:08.680 and today I want to waste no time at all 0:00:08.720 --> 0:00:11.240 because we're talking about your mortgage, and we're going to 0:00:11.280 --> 0:00:14.400 talk about seven different ideas for you to apply right 0:00:14.440 --> 0:00:16.840 now today for your mortgage so that you can save 0:00:17.079 --> 0:00:20.360 valuable time and money. And I'm not talking about small 0:00:20.360 --> 0:00:22.840 dollars here or silly amounts of time. I'm talking tens, 0:00:22.880 --> 0:00:25.759 if not maybe hundreds of thousands of dollars and shaving 0:00:26.000 --> 0:00:29.160 years off your home loan. This is something I'm really 0:00:29.240 --> 0:00:32.120 serious about you understanding how your mortgage works and the 0:00:32.240 --> 0:00:34.479 things that you can actually do that are really not 0:00:34.520 --> 0:00:37.680 that hard to save you so much time and money. 0:00:37.840 --> 0:00:40.239 And of course, the moment that mortgage is paid off, woohoo, 0:00:40.400 --> 0:00:42.200 there are so many other tools that we can start 0:00:42.240 --> 0:00:45.680 playing with to build wealth outside of your home. Of course, 0:00:45.880 --> 0:00:48.680 now to help us break down all these ideas, these 0:00:48.800 --> 0:00:52.599 very powerful ideas, these practical ideas, these simple ideas, I 0:00:52.640 --> 0:00:56.840 am joined by John Micklzzi from blue Land and Financial Services. 0:00:56.960 --> 0:00:59.280 As you know, we've previously had Adam McCabe in the 0:00:59.320 --> 0:01:02.000 studio plenty of and I decided to mix things up because 0:01:02.040 --> 0:01:05.800 Blue Lantern is actually who I recommend for mortgage brokers. 0:01:06.040 --> 0:01:08.520 I get zero benefit from doing this. I'm just happy 0:01:08.520 --> 0:01:11.160 to share contacts of people that I know and trust, 0:01:11.200 --> 0:01:13.679 but more importantly, people that I have worked with for 0:01:13.760 --> 0:01:17.039 tens of years and actually do my own personal mortgage 0:01:17.040 --> 0:01:19.639 broking and investment loans, as well as my family members 0:01:19.720 --> 0:01:22.119 and all of my friends. So if at any time 0:01:22.200 --> 0:01:23.720 you think you know what, I need to speak to 0:01:23.760 --> 0:01:25.959 these guys. They sound really good. They are, and of 0:01:25.959 --> 0:01:28.000 course I will link all the contact details in the 0:01:28.080 --> 0:01:30.480 podcast notes so you can quickly and easily connect with 0:01:30.560 --> 0:01:34.119 them whenever you feel ready. Now a quick reminder, of course, 0:01:34.240 --> 0:01:36.640 all of these podcasts are general in nature and for 0:01:36.760 --> 0:01:39.520 educational purposes only. All right, now that we've got that 0:01:39.560 --> 0:01:42.560 important compliance requirement out of the way, let's hit the 0:01:42.600 --> 0:01:55.520 ground running. John, good morning. Thank you for coming into 0:01:55.880 --> 0:01:58.640 the studio and to talk about this. And I'm so 0:01:58.640 --> 0:02:01.000 serious about Australian's realing what they can do with their 0:02:01.000 --> 0:02:02.800 home loans to actually get the monkey off their back. 0:02:02.880 --> 0:02:05.120 Do you agree that we need to be paying more 0:02:05.120 --> 0:02:06.120 attention to our homelands? 0:02:06.280 --> 0:02:08.840 Absolutely? And I could not agree with you more, Kenna. 0:02:08.960 --> 0:02:11.160 We have a great calculator on the sugar Mumba website. 0:02:11.240 --> 0:02:14.239 It's an extra repayment calculator at a combined lumpsung. You 0:02:14.360 --> 0:02:16.920 just simply plug in your details and see what an 0:02:16.960 --> 0:02:19.640 extra fifty dollars per month, plus say an extra thousand 0:02:19.680 --> 0:02:22.560 dollars bonus each year on your homelan doesn't see the 0:02:22.680 --> 0:02:25.720 term drop and see the amount of savings add up. 0:02:25.760 --> 0:02:28.120 And of course that's subject to interest rates remaining the 0:02:28.160 --> 0:02:30.760 same and of course making sure you don't draw that 0:02:30.800 --> 0:02:33.240 money back out again. But you have a choice, and 0:02:33.280 --> 0:02:35.320 you really can actually pay off the whole mortgage so 0:02:35.360 --> 0:02:37.920 much faster. You are not dictated by the bank or 0:02:37.960 --> 0:02:40.839 your lender. But look, let's get cracking because we've got 0:02:40.880 --> 0:02:42.840 seven ideas that we want to break down together as 0:02:42.880 --> 0:02:44.680 to how to pay off your home loan off as 0:02:44.760 --> 0:02:47.480 quickly as possible. Before we begin, I'm just sorry, I 0:02:47.520 --> 0:02:48.800 just don't want to hit the gray money. Can you 0:02:48.840 --> 0:02:51.040 just give everyone the quick introductionist to who you are, 0:02:51.040 --> 0:02:53.240 because obviously everyone's used to hearing Adam on the show. 0:02:53.240 --> 0:02:55.120 Can you explain to everyone what you do and how 0:02:55.160 --> 0:02:56.200 you fit in at Blue Lantern. 0:02:56.360 --> 0:02:59.959 Sure, So there's a few brokers at Lantern. I'm Johnny. 0:03:00.080 --> 0:03:02.320 Let's see on one of the team, and so we 0:03:02.440 --> 0:03:06.360 bread the workout evenly between the team, depending on a speciality, 0:03:06.560 --> 0:03:09.440 depending on who's available, depending on you know, where that 0:03:09.440 --> 0:03:11.840 client has come from. So there's always good coverage for 0:03:11.919 --> 0:03:14.359 anyone that wants to come and have a chat with us, 0:03:14.480 --> 0:03:16.560 do a mortgage health check, get ready for a purchase. 0:03:16.680 --> 0:03:19.600 So briefly, that's my work splits into two. So it's 0:03:19.639 --> 0:03:22.720 either helping people purchase the property, but then importantly staying 0:03:22.720 --> 0:03:24.839 with them after that, you know, working with them through 0:03:24.840 --> 0:03:26.920 the life of the loan to ensure that you know, 0:03:26.960 --> 0:03:29.600 they are trying to minimize interest costs and they are 0:03:29.720 --> 0:03:32.600 getting to total home ownership or at least comfortable levels 0:03:32.600 --> 0:03:33.840 of debt as soon as possible. 0:03:33.880 --> 0:03:37.120 That ongoing service is completely underestimated. And I say that 0:03:37.200 --> 0:03:40.400 because I know how much I rely on Blue Land 0:03:40.480 --> 0:03:42.440 and to review my home loan, to call the bank 0:03:42.440 --> 0:03:44.760 on my behalf and negotiate a better interest rate, you know, 0:03:44.800 --> 0:03:47.080 when it's time to refinance, because the bank won't match 0:03:47.160 --> 0:03:49.600 what they're paying new customers or what the competitive rate is. 0:03:49.800 --> 0:03:51.920 And that guidance as to how to actually structure the 0:03:51.960 --> 0:03:53.280 loans in the right way, because there are lots of 0:03:53.320 --> 0:03:55.600 ways to pay your home loft and lots of different 0:03:55.640 --> 0:03:57.760 ways that suit different people in different situations or different 0:03:57.760 --> 0:04:01.480 periods of their lives. So that ongoing service is actually free, 0:04:01.480 --> 0:04:01.800 isn't it. 0:04:01.880 --> 0:04:04.360 That's exactly right, And I'll go into more detail about 0:04:04.360 --> 0:04:04.760 this later. 0:04:05.240 --> 0:04:07.400 Because of our business model, not all brokes are the same. 0:04:07.440 --> 0:04:09.960 We are compelled, you know, to look after you and 0:04:10.000 --> 0:04:12.520 to give you options and to make sure that everything's 0:04:12.560 --> 0:04:14.880 working well for you. And this is no disrespect to 0:04:14.920 --> 0:04:17.880 banks because obviously we do source funding from banks. We've 0:04:17.880 --> 0:04:20.120 work with them, we work with them, but they are 0:04:20.160 --> 0:04:22.640 not compelled to do anything. They only have to explain 0:04:22.680 --> 0:04:23.679 their products and services. 0:04:23.680 --> 0:04:23.960 That's it. 0:04:24.040 --> 0:04:25.760 Look for anyone who is a mortgage right now, they've 0:04:25.920 --> 0:04:28.920 never had any ongoing relationship in helping power their bank. 0:04:28.960 --> 0:04:30.480 Can this be your sign to pick up the phone 0:04:30.480 --> 0:04:32.600 and find a good quality mortgage broker that's going to 0:04:32.640 --> 0:04:34.040 work with you. And you know, the way I would 0:04:34.040 --> 0:04:36.440 describe what you guys do is you're almost like a coach. 0:04:37.120 --> 0:04:39.640 And look, Adam has always done our home loans and 0:04:39.640 --> 0:04:42.000 investment loans, and I have him on speed dial, and 0:04:42.400 --> 0:04:46.080 it makes it makes the difference because you do make 0:04:46.200 --> 0:04:49.320 greater inroads and you make better progress and you tick 0:04:49.360 --> 0:04:52.880 those goals off. So all right, let's get started. Number one. 0:04:52.960 --> 0:04:54.400 The first thing to do, and when it comes to 0:04:54.480 --> 0:04:55.919 trying to pay for your home loan as quickly as 0:04:55.960 --> 0:04:58.240 possible is to do a budget. But can you explain 0:04:58.680 --> 0:05:00.280 why and how effective this is? 0:05:00.520 --> 0:05:04.120 Certainly, so to try and determine, okay, where could you 0:05:04.160 --> 0:05:06.440 make savings and where can you make inroads? You've got 0:05:06.480 --> 0:05:10.039 to understand what your current expenditure is and try to 0:05:10.080 --> 0:05:13.720 categorize it. To think about categories such as your mortgagey payments. 0:05:13.720 --> 0:05:20.280 Obviously that's the first start, but then things like utilities, rates, insurances, communications, expenditure, 0:05:20.400 --> 0:05:22.719 so those things that you might think, okay, well they're 0:05:22.720 --> 0:05:25.240 sort of fixed in nature. And then there's other categories 0:05:25.240 --> 0:05:30.440 such as groceries, eating out, recreation, entertainment, which are more discretionary, right. 0:05:30.279 --> 0:05:33.120 And't mentalize these expenses exactly, so you can sort of 0:05:33.360 --> 0:05:37.200 focus purely on looking at the utilities expenses, the gas, electricity, 0:05:37.320 --> 0:05:39.479 the water, see what you can't really do too much with. 0:05:39.920 --> 0:05:42.520 And then obviously look at the groceries, alcohol, you know, 0:05:42.560 --> 0:05:46.919 those other inns absolutely which are more volatile or fluctuate. 0:05:47.080 --> 0:05:47.279 Yeah. 0:05:47.320 --> 0:05:48.960 So I have people who say, oh, you know, my 0:05:49.000 --> 0:05:51.359 credit card bill is three thousand dollars a month, so 0:05:51.400 --> 0:05:54.080 that's my expenses. But that's just to have one number. 0:05:54.360 --> 0:05:57.120 It's hard to make inroads into it unless you break 0:05:57.160 --> 0:05:59.640 down that number and see, okay, where can I perhaps 0:05:59.680 --> 0:06:01.600 improve what can't be improved, So. 0:06:01.560 --> 0:06:04.520 You've got to do a deep dive. Yes, I completely agree. Now, 0:06:04.640 --> 0:06:06.440 you and I were chatting on the phone and we 0:06:06.440 --> 0:06:09.520 were talking about this thing called bank statements dot com 0:06:09.560 --> 0:06:11.400 and you've given me example, and I have to say 0:06:11.560 --> 0:06:14.239 it's quite fascinating because it basically is a software system 0:06:14.279 --> 0:06:15.960 that breaks down and does all that. It's almost like 0:06:15.960 --> 0:06:19.000 an AI of budgeting because it breaks down, it compartmentalizes 0:06:19.040 --> 0:06:20.640 everything for you so you don't need to do it yourself. 0:06:20.800 --> 0:06:22.719 So then you can then look at each individual category 0:06:22.760 --> 0:06:24.440 and see what needs to be cut down or cut out. 0:06:24.480 --> 0:06:27.640 Can you explain how you use this to help clients 0:06:27.720 --> 0:06:29.680 and also how does someone get their hands on this, 0:06:29.720 --> 0:06:31.000 because it's extremely helpful. 0:06:31.120 --> 0:06:33.520 So when I do a mortgage, health check, or a 0:06:33.560 --> 0:06:37.120 brief finance or even a purchase. Part of that process 0:06:37.400 --> 0:06:40.440 is understanding living expenses. And then when it comes to 0:06:40.480 --> 0:06:43.919 getting data from people, so for example, credit card statements, 0:06:44.040 --> 0:06:47.400 personal loan statements, home loan statements, we have this service 0:06:47.440 --> 0:06:51.520 whereby it's automated, it's secure, where the statements come directly 0:06:51.560 --> 0:06:54.960 to us. And then importantly with that comes an analysis 0:06:55.200 --> 0:06:59.159 of expenses. Okay, And that's important because someone might say, oh, yeah, 0:06:59.200 --> 0:07:02.640 we spend you know, three hundred dollars on recreation and entertainment. 0:07:02.720 --> 0:07:05.680 Then the data says, well, it's one thousand dollars, right, 0:07:05.720 --> 0:07:07.440 and there's no wrong or right answer. But then it's 0:07:07.440 --> 0:07:10.120 a conversation to say, do you want to limit your 0:07:10.360 --> 0:07:12.880 recreation attainment to three hundred or is it actually one 0:07:12.880 --> 0:07:14.120 thousand dollars a month? 0:07:14.200 --> 0:07:15.760 And you don't want that to change? 0:07:15.960 --> 0:07:19.480 Okay, So that's just a conversations awareness. 0:07:19.560 --> 0:07:20.640 It creates awareness. 0:07:20.760 --> 0:07:22.680 You hear stories in the media about, you know, the 0:07:22.680 --> 0:07:25.440 bank look through my expenses and they questioned why I 0:07:25.480 --> 0:07:26.800 was going to McDonald's every week. 0:07:27.600 --> 0:07:30.160 I don't care. You know, maybe invite me longto McDonald's. 0:07:30.160 --> 0:07:32.800 I don't know. But it's not a deep dive. 0:07:32.840 --> 0:07:36.240 I don't go into what you're spending on where it's 0:07:36.280 --> 0:07:39.000 more the headline numbers. If you want to, if you 0:07:39.040 --> 0:07:41.080 want the data to go in and perhaps look where 0:07:41.120 --> 0:07:42.640 you can improve, fine, I'll give it to you. But 0:07:42.720 --> 0:07:46.040 it's not a deep dive exercise for me into too 0:07:46.080 --> 0:07:49.560 far down. And there's no judgment in the process at all. 0:07:49.720 --> 0:07:51.720 Oh gosh. I mean you and I both know there's 0:07:51.760 --> 0:07:54.360 no judgment where it comes to people's personal finances. You know, 0:07:54.480 --> 0:07:56.720 everyone has their own personal value system, and for us, 0:07:56.760 --> 0:07:58.320 at really the end of the days, we're there to help. 0:07:58.480 --> 0:08:00.440 So if someone comes from saying we need help, we'll 0:08:00.440 --> 0:08:02.160 look at it with a view to help, not to 0:08:02.440 --> 0:08:04.160 of you to judge. And I mean, look, I've got 0:08:04.200 --> 0:08:05.560 an example in front of you right now that you've 0:08:05.560 --> 0:08:07.520 given me, and I have to say it's brilliant because 0:08:07.680 --> 0:08:09.960 immediately my eye went to certain expenses. I was like, 0:08:09.960 --> 0:08:11.560 oh wow, you know you could actually make an extra 0:08:11.640 --> 0:08:14.280 eighty dollars per month for repayment just by looking at 0:08:14.280 --> 0:08:16.760 this one particular expense. It really does break it down. 0:08:16.840 --> 0:08:18.800 So I mean, I'll put for everyone that's listening right now, 0:08:18.960 --> 0:08:22.240 obviously John's contact details, but I believe you're happy to 0:08:22.680 --> 0:08:24.240 give some people access. 0:08:23.880 --> 0:08:26.440 To this as part of a mortgage health check. 0:08:26.440 --> 0:08:27.920 As part of the mortgage health check. So, I mean, 0:08:27.920 --> 0:08:30.560 what a brilliant opportunity for everyone to get a great 0:08:30.600 --> 0:08:33.439 refresh of their budget through this amazing service and get 0:08:33.440 --> 0:08:36.480 some help from you. So all right, Realistically, people think, oh, 0:08:36.600 --> 0:08:38.880 a budget, it's like doing going to the dentist. You 0:08:38.920 --> 0:08:42.240 don't want to do it, you procrastinate. But the smallest savings, 0:08:42.360 --> 0:08:45.240 this particularly a regular basis on a mortgage, can actually 0:08:45.320 --> 0:08:47.840 save you thousands of dollars exactly. Can you give us 0:08:47.840 --> 0:08:51.480 a couple of realistic examples to how much you know, 0:08:51.600 --> 0:08:53.679 some you know, say one hundred and fifty dollars per 0:08:53.679 --> 0:08:56.040 month that you might find from your budget when applied 0:08:56.080 --> 0:08:58.520 to making an extra repayment on your homeland. How much 0:08:58.720 --> 0:09:01.080 really are we talking about? Because I feel like when 0:09:01.120 --> 0:09:02.760 people hear that how much, they'll say they'll want to 0:09:02.760 --> 0:09:04.800 go do their budget immediately. So can you give us 0:09:04.800 --> 0:09:08.160 an example, a realistic example as to how much someone 0:09:08.400 --> 0:09:10.880 can save from a time point of view and from 0:09:10.880 --> 0:09:13.240 an interest point of view by doing their budget and 0:09:13.280 --> 0:09:15.560 fighting say an extra hundred dollars or extra fifty dollars 0:09:15.640 --> 0:09:17.280 or an extra hundred and fifty dollars per month that 0:09:17.280 --> 0:09:18.520 they can apply to their homelan. 0:09:18.679 --> 0:09:18.959 Sure. 0:09:19.040 --> 0:09:20.880 I call it the power of small amounts of money, 0:09:20.920 --> 0:09:22.920 and it shouldn't be sneezed at. So I will do 0:09:22.920 --> 0:09:25.400 it on an annual basis. So that way, maybe that's 0:09:25.400 --> 0:09:27.839 even that's more achievable for someone. If someone puts a 0:09:27.880 --> 0:09:31.319 thousand dollars extra on their home loaner per year, yeah, 0:09:31.360 --> 0:09:35.160 per year, right, that thousand dollars saves five thousand dollars 0:09:35.200 --> 0:09:35.640 in interest. 0:09:35.720 --> 0:09:38.080 Wow, so that's not even one hundred dollars per month, 0:09:38.080 --> 0:09:40.199 that's right. What are we using as an average mortgage 0:09:40.200 --> 0:09:40.720 size here? 0:09:40.840 --> 0:09:43.920 So that's for a five hundred thousand dollars average mortgage size. 0:09:43.960 --> 0:09:46.839 Even up to eight point fifty, the saving is a 0:09:46.840 --> 0:09:50.240 little bit more. But just think in rough terms, one 0:09:50.240 --> 0:09:53.440 thousand dollars on five thousand dollars off in interest. 0:09:53.559 --> 0:09:54.440 That is amazing. 0:09:54.440 --> 0:09:56.400 And what's the average interest rate you're using that I'm 0:09:56.440 --> 0:09:57.679 using six point one five. 0:09:57.600 --> 0:09:59.959 Six point one five, okay, so that's a pretty competitive rate. 0:10:00.000 --> 0:10:04.120 That's computer greedy in these numbers. So essentially it's like 0:10:04.360 --> 0:10:08.440 that one thousand dollars savings gives you back an additional 0:10:08.480 --> 0:10:10.600 four thousand dollars in total, that's. 0:10:10.480 --> 0:10:14.520 Right, and the average time, so think about it takes 0:10:14.600 --> 0:10:16.040 two to three months off your loan. 0:10:16.360 --> 0:10:16.720 Wow. 0:10:16.840 --> 0:10:19.400 Okay, so then again you do that every year, and 0:10:19.440 --> 0:10:22.560 then you're starting to get into not months, but potentially 0:10:22.640 --> 0:10:23.800 years at the end of the mortgage. 0:10:23.800 --> 0:10:25.400 Well if you feel most people are on a thirty 0:10:25.480 --> 0:10:28.120 year mortgage. So if it's shaving two months off each 0:10:28.160 --> 0:10:30.840 time you do this, it adds up very very quickly. 0:10:30.920 --> 0:10:33.679 And also, as I said, like, that's what eight hundred 0:10:33.679 --> 0:10:36.560 and eighty dollars a month extra pay, not even twenty 0:10:36.640 --> 0:10:38.440 dollars a week, that's right. And if that is not 0:10:38.480 --> 0:10:41.040 a bigger motivation to go and do a budget or 0:10:41.120 --> 0:10:42.880 get a health check done by you and get an 0:10:42.920 --> 0:10:45.000 AI program to do your budget, I don't know what 0:10:45.160 --> 0:10:48.080 is all right? Next idea, let's talk about redraw facilities 0:10:48.080 --> 0:10:51.080 and offset accounts. Okay, how do they work? And how 0:10:51.240 --> 0:10:53.480 can I everyone listening right now use that to their 0:10:53.520 --> 0:10:56.000 advantage to save tens of thousand dollars for their homeland. 0:10:56.200 --> 0:10:58.760 Sure, so whether you use a redrawal facility or offset 0:10:58.800 --> 0:11:00.600 it has the same effect that simple. 0:11:00.679 --> 0:11:02.720 Okay, Can we explain the difference for everyone right now 0:11:02.880 --> 0:11:03.520 between the two. 0:11:03.640 --> 0:11:06.480 So that one thousand dollars we're talking about, you can 0:11:06.559 --> 0:11:08.880 pay that off your loan right and then if it 0:11:08.880 --> 0:11:11.960 has a redraw of facility, you can get that back 0:11:12.000 --> 0:11:12.640 if you need it. 0:11:13.080 --> 0:11:15.680 The discipline is not not getting touched. It's not to. 0:11:15.440 --> 0:11:17.839 Touch it, okay, but at least whilst it's in there, 0:11:18.040 --> 0:11:21.080 it's saving you money. So you will literally see if 0:11:21.120 --> 0:11:22.959 you put one thousand dollars in, if your mortgage is 0:11:23.000 --> 0:11:25.240 eight fifty, it will come down to eight forty nine, okay, 0:11:25.240 --> 0:11:26.920 So you will see the difference. 0:11:26.720 --> 0:11:28.320 And you'll low to be charged the interest on the 0:11:28.360 --> 0:11:29.960 eight four nine exactly exactly. 0:11:30.080 --> 0:11:31.240 Cotant part exactly. 0:11:31.320 --> 0:11:34.480 Now, if you put one thousand dollars in an offset account, 0:11:34.679 --> 0:11:36.280 same thing, same effect, So that. 0:11:36.480 --> 0:11:39.160 Since they're almost looking like savings in the offset account, 0:11:39.120 --> 0:11:41.720 that's right, like it literally looks like an online savings account, 0:11:41.720 --> 0:11:43.680 that's right link to all you accounts, but it's actually 0:11:43.920 --> 0:11:46.520 offsetting the interest. So instead of the bank charging you 0:11:46.600 --> 0:11:48.920 interest on eight hundred and fifty thousand, it's charging your 0:11:49.040 --> 0:11:52.480 interests on eight hundred and forty nine exactly, okay, exactly 0:11:52.720 --> 0:11:54.160 out of interest. Which do you prefer? 0:11:54.480 --> 0:11:59.880 I prefer offset accounts? Personal choice just like the flexibility 0:11:59.880 --> 0:12:03.000 of having the money there. And also there are investment 0:12:03.080 --> 0:12:06.400 properties in play, and therefore I don't want to put 0:12:06.520 --> 0:12:09.920 money on the loan because I need the funds, and 0:12:09.960 --> 0:12:12.400 I don't because once you put money on into investment loan, 0:12:12.559 --> 0:12:14.800 you can't redraw it back without affecting your accounting. 0:12:14.840 --> 0:12:17.280 Can you give us an example of, you know, for example, 0:12:17.320 --> 0:12:20.240 emergency money. I tell everybody you need to have emergency money, 0:12:20.280 --> 0:12:21.720 and you need to have the right emergency money. And 0:12:21.760 --> 0:12:23.640 I say to people, you know, if you can keep 0:12:23.679 --> 0:12:26.200 your emergency money in either your offset account or a 0:12:26.240 --> 0:12:30.079 redraw facility, how much does that save people in time 0:12:30.200 --> 0:12:32.880 and money? Using those same examples of say it, I 0:12:32.920 --> 0:12:34.880 think a six to fifty mortgage, or sorry, five hundred 0:12:34.920 --> 0:12:38.439 thousand dollar mortgage, an eight hundred thousand dollars mortgage. 0:12:38.120 --> 0:12:42.520 Okay, So let's use the figure of ten thousand dollars. Okay. 0:12:42.600 --> 0:12:44.760 So let's just say you have been able to save 0:12:44.800 --> 0:12:47.880 ten thousand dollars and that's your emergency funds, yes, okay, 0:12:48.480 --> 0:12:51.000 And let's say you put them in an offset account. 0:12:51.040 --> 0:12:54.559 Okay. So on an eight fifty loan. 0:12:54.800 --> 0:12:58.440 The savings are over the life of the loan, fifty 0:12:58.480 --> 0:13:01.839 one thousand dollars will be paid nine months. 0:13:01.559 --> 0:13:04.200 Earlier, assuming you don't take my emergency money out. Yes, 0:13:04.280 --> 0:13:08.040 that is huge, fifty one thousand dollars. So just in 0:13:08.080 --> 0:13:11.640 our first two tips alone, you know we've saved what 0:13:12.360 --> 0:13:15.640 five thousand dollars by making an extra one thousand dollars 0:13:15.679 --> 0:13:19.480 zero in payments each year yep, and then an extra 0:13:19.720 --> 0:13:23.440 fifty one thousand dollars by using a redraw facility or 0:13:23.480 --> 0:13:26.040 an offset account. Anyone that's listening to this episode right 0:13:26.040 --> 0:13:29.120 now that has emergency money sitting in an online savings 0:13:29.160 --> 0:13:33.400 account that's not connected to your home loan, please consider 0:13:33.480 --> 0:13:38.199 getting some advice, obviously from John or from you know, 0:13:38.480 --> 0:13:41.160 your own mortgage broker, about the best way to structure 0:13:41.240 --> 0:13:44.280 is look into a redraw facility or an offset account. 0:13:44.280 --> 0:13:46.840 And most of these facilities are free. They're part of 0:13:47.000 --> 0:13:48.240 your loan package anyway. 0:13:48.360 --> 0:13:51.080 Some banks charge a package fee. Some banks don't charge 0:13:51.080 --> 0:13:52.480 a package fee at all, but they still give you 0:13:52.520 --> 0:13:55.560 an offset account. Then you can get really creative. Some people, 0:13:55.720 --> 0:13:57.679 rightly or wrongly, they may not have the discipline. They 0:13:57.679 --> 0:14:00.920 may have a certain way of banking, and for those clients, 0:14:01.080 --> 0:14:04.360 if everything else matches up, for them, I suggest a 0:14:04.440 --> 0:14:06.679 lender that has multiple offset accounts, so they can have 0:14:06.800 --> 0:14:09.040 one account for the emergency funds where they don't have 0:14:09.120 --> 0:14:10.400 to touch where it's they don't have to do the 0:14:10.480 --> 0:14:12.600 everyday banking, and then they have other accounts that they 0:14:12.679 --> 0:14:15.840 use for every day banking. And on that basis, that's 0:14:16.360 --> 0:14:19.640 excellent because every dollar in every account every day is 0:14:19.680 --> 0:14:20.640 offsetting against the loan. 0:14:20.760 --> 0:14:22.720 This is a little insight. My preference is actually a 0:14:22.760 --> 0:14:25.760 redraw facility, So our emergency money systs in a redraw facility. 0:14:25.800 --> 0:14:28.160 I actually just checked it this morning and it's slowly 0:14:28.200 --> 0:14:31.000 getting back up there again. But we do have multiple 0:14:31.080 --> 0:14:34.840 offset accounts for our other smaller goals, like we're saving 0:14:34.880 --> 0:14:37.280 up to renovate our kitchen, we are saving up to 0:14:37.280 --> 0:14:41.320 take the kids skiing overseas in June, So we have 0:14:41.400 --> 0:14:44.120 those little smaller accounts bubbling away that are at least 0:14:44.160 --> 0:14:46.680 offsetting the interest on other loans as well. So it 0:14:47.400 --> 0:14:51.360 really is that combination is equally as powerful, but incredibly 0:14:51.360 --> 0:14:53.360 effective and in saving you all the time. And I 0:14:53.440 --> 0:14:56.120 love as a great source of motivation is that when 0:14:56.480 --> 0:14:58.520 we pay our mortgage, I think around the twenty six 0:14:58.600 --> 0:15:00.800 of every month and a couple ofdays later, I'll log 0:15:00.800 --> 0:15:03.080 into my intet banking and look at the interest repayment 0:15:03.440 --> 0:15:06.280 dropping and seeing that we're making a bigger, better progress 0:15:06.320 --> 0:15:07.240 with that deduction. 0:15:07.480 --> 0:15:09.360 Everyone has their own motivation. I think it's important to 0:15:09.360 --> 0:15:12.400 find your own motivation. Everyone has their own personal preferences. Yeah, 0:15:12.440 --> 0:15:16.000 I've used redrawer in the past for different reasons. As again, 0:15:16.080 --> 0:15:18.840 it's just my that's my personal preference, and it's about 0:15:18.840 --> 0:15:20.560 finding what works works for you. 0:15:20.760 --> 0:15:23.360 All right, let's keep these savings bubbling long for our listeners. 0:15:23.360 --> 0:15:26.800 So number three making ad hoc repayments. So you know 0:15:27.040 --> 0:15:28.680 a lot, I know everyone's on a really tape budget. 0:15:28.680 --> 0:15:29.920 They're like, where are we going to come up with 0:15:29.960 --> 0:15:32.560 some extra ad hoc money? Well, you know, taking on 0:15:32.640 --> 0:15:35.840 extra work. Perhaps you might get a tax refund. You know, 0:15:35.960 --> 0:15:38.240 you might do a side hustle, you might declutter your home. 0:15:38.280 --> 0:15:40.960 You know, gosh, my kids stayed to outgrow. They're all 0:15:40.960 --> 0:15:42.600 going through gross spurts. And I've got so many things 0:15:42.640 --> 0:15:45.239 that I could just list onto gum Tree or Facebook marketplace. 0:15:45.560 --> 0:15:48.360 You know, even just an extra like one thousand dollars 0:15:48.400 --> 0:15:50.960 can have an incredible effect. So we just quickly talk 0:15:51.000 --> 0:15:52.600 about the power of ad hoc repayments. 0:15:52.680 --> 0:15:55.720 Yeah, so ad hoc repayments I think, if they can 0:15:55.760 --> 0:15:58.560 be achieved, you know, are excellent because that's where you 0:15:58.800 --> 0:16:00.800 really start eating into your mortgage. 0:16:01.000 --> 0:16:02.840 Right. The savings tips, yeah, they can be done. 0:16:02.960 --> 0:16:05.920 But the extra the ad hoc then again, you know 0:16:06.000 --> 0:16:07.920 we're getting back to that. If you can find a 0:16:07.960 --> 0:16:10.760 thousand dollars savings, and even if you find that extra 0:16:10.840 --> 0:16:14.840 thousand dollars in income or cash or or whatever, again, 0:16:15.120 --> 0:16:17.760 every one thousand dollars is a five thousand dollars saving. 0:16:17.920 --> 0:16:20.280 Wow. Did you know that the average Australian gets back 0:16:20.280 --> 0:16:22.560 about two and a half thousand dollars per annum as 0:16:22.600 --> 0:16:23.240 a tax return. 0:16:23.400 --> 0:16:24.440 No, I was not aware of that. 0:16:24.800 --> 0:16:28.160 So if we were to insteader of put one thousand 0:16:28.200 --> 0:16:30.240 dollars onto the homelan, we put two and a half 0:16:30.240 --> 0:16:32.480 thousand dollars, or even to say, let's say we take 0:16:32.520 --> 0:16:34.640 put two thousand on the home loan and keep five 0:16:34.720 --> 0:16:36.600 hundred for ourselves to keep a bit of you know, 0:16:36.720 --> 0:16:39.520 I guess financial flow in our lives. I mean those 0:16:39.560 --> 0:16:43.120 savings multiply. It's not just doubling it. It actually goes for 0:16:43.240 --> 0:16:46.600 pounds because it's reverse compounding, so that savings is probably 0:16:46.600 --> 0:16:49.080 more like closer to eleven thousand dollars, and you know 0:16:49.080 --> 0:16:52.000 you're saving what probably four or five months off the 0:16:52.040 --> 0:16:52.360 home loan. 0:16:52.400 --> 0:16:55.200 Again, that's exactly right, So just think every thousand dollars, 0:16:55.280 --> 0:16:57.880 think five thousand, and think you know a few months 0:16:57.880 --> 0:16:58.880 off the home loan, home loan. 0:17:00.040 --> 0:17:01.200 One who's listening right now? Can I just do a 0:17:01.280 --> 0:17:03.960 quick shout out to two very powerful calculators. The one 0:17:04.000 --> 0:17:06.080 is obviously on the Sugar Mama website. It is my 0:17:06.160 --> 0:17:08.000 lump Summon extra payment or a calculat where you can 0:17:08.000 --> 0:17:10.920 actually combine the two of increasing your mortgage payments after 0:17:10.920 --> 0:17:13.400 doing a budget and making those extra ad hoc repayments, 0:17:13.400 --> 0:17:15.639 you can see how the combination of the two how 0:17:15.720 --> 0:17:17.560 much time and money they save you. And then of 0:17:17.560 --> 0:17:21.040