Mortgage Killer Accelerator

Strategy 74 of 107 · new for the five-year plan

Sell all or part of a business

Depends on markets or variable ratesFrom an asset you already ownFive-year size: can carry most of it

What it is

Get a valuation, and talk with partners or key employees about buying a share.

Steps

  1. Get a valuation, and talk with partners or key employees about buying a share.
  2. The sale price is split among the business's assets for tax; some parts are taxed as ordinary income.
  3. Send the after-tax proceeds to principal.

Repeat: Once, or in stages.

Measure: After-tax proceeds.

Try it in the calculator Enter its amount in "One-time amount to principal". Add a payoff goal of 5 years to see what is still needed.

Risks

  • Giving up control and future profits.
  • Seller notes can go unpaid.
  • Use a CPA and a business attorney.

Who it fits

Business owners, Higher net worth, with assets

Needs

Owns a business or is self-employed

How predictable

Depends on markets or variable rates

A worked example (hypothetical, not guaranteed)

Picture a hypothetical household (business owners). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.

They follow the steps: get a valuation, and talk with partners or key employees about buying a share.

Suppose it brings a one-time $100,000 on principal. The loan would be paid off in 13 years 1 month instead of 30 years, saving about $285,309 in interest. To finish in five years, they would still need about $2,017 a month more from other strategies. That is why the five-year sequences stack several at once.

The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.

Sequences that use it

Sources and more information

Where to get help

Related strategies

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