United Financial Freedom
Interest Rate vs. Interest Volume
All Interest is NOT Created Equal Ideally, you do want the lowest interest rate you can get. A lower rate helps make your principal monthly payments more manageable. But what “they” don’t teach you is that the amount of interest you pay each month can make up a massive chunk of your total mortgage payment. We call this your interest volume. Whereas your interest rate is fixed, interest volume changes over time. The more money you owe the bank, the more your interest volume will be. Even with a rate as low as 2.99%, depending on how much you owe, up to 60% of your monthly payments could be dedicated to interest.
Debt Costs Far More Than Money
When you’re in debt, you can’t live life on your terms. Following the bank’s mortgage plan, you’re locked in for fifteen, twenty, even thirty years. That’s time you’ll never get back. Time you could be spending on vacation with your loved ones. Time on your favorite hobby. Time building the life of your dreams. Debt is like a dark cloud of financial pressure and stress that follows you wherever you go. This is especially true when you live paycheck to paycheck, which, as of 2020, 74% of Americans do. And with every major purchase –– a new car, a medical procedure, college tuition –– the cloud only grows larger. Unfortunately, most of us only know one way to solve this problem: make more money.