Learn how our systems can work for your specific situation.
HELOC with IBC: The HELOC gives you short term flexibility and rapid debt reduction while the IBC policy gives you long term growth and liquidity. The HELOC handles cash flow and interest reduction while the policy builds wealth and creates a reservoir of opportunity capital. When used together you gain speed in the short term and strength in the long term.
Example: Short term cash flow of 6,000 per month reduces HELOC interest daily. Long term cash value inside the IBC policy compounds year after year. Debt shrinks faster while assets grow simultaneously.
Traditional Mortgage: A traditional mortgage offers neither speed nor flexibility. It has no built in way to reduce interest efficiently and no built in way to create liquidity. It limits options and slows down progress even when you make every payment on time.
Example: Payments reduce debt slowly. Savings grow minimally. Interest accrues continuously. No daily
interest reduction and no built in liquidity or acceleration exists.
HELOC System into IBC: When you first begin your HELOC you want to capture and preserve as much of those funds as you can via a dump and annual funded policy. As soon as the deposit to the policy is reflecting available cash value, you want to take the maximum loan and run those funds back into the HELOC. You have now started utilizing the dollars in two places at once. Forever compounding and growing in the policy, providing a death benefit for legacy, and now offsetting the HELOC interest and principal balance in the HELOC.
Example: An 18,000 annual policy premium is funded through the HELOC. Because there is a HELOC with additional funds we want to preserve, that policy is backed up with an 82,000 dump in. Once cash value becomes available, a 85,000 policy loan is taken and sent back into the HELOC. The HELOC balance drops by 85,000 while the policy cash value continues compounding. The same dollars now grow in the policy and reduce interest on the HELOC simultaneously where they are liquid and available for further use.
Traditional Mortgage: A traditional mortgage has no flexibility. You cannot move money from your mortgage into an asset that grows. The only way to build savings is to earn extra money and put it into a checking or savings account where it grows slowly and taxes apply. There is no built in wealth building effect and the dollars are only being utilized one time.
Example: Mortgage payments only reduce debt. No funds can be redirected into a growing asset. Any savings must come from extra income and grow slowly in taxable accounts.
HELOC System: When you want to take advantage of an opportunity you pull from the HELOC or borrow from your policy. This gives you immediate access to money without disrupting your system. The HELOC interest is simple and flexible and a policy loan never stops your cash value from growing. You can invest in something meaningful while your system keeps working.
Example: A 30,000 opportunity is funded by drawing from the HELOC. Interest is charged only on the outstanding balance. No refinancing or liquidation of assets is required and the system continues uninterrupted.
Traditional Mortgage: Your mortgage gives you no flexible access to funds. If you want to invest or seize an opportunity you must save slowly over months or years or refinance your home which is costly and slow. Opportunities can be missed because the money is not available when needed.
Example:To fund the same 30,000 opportunity, the homeowner saves 500 per month. It takes five years to accumulate the funds, during which the opportunity is missed.
HELOC System: The profit from your opportunity or investment goes straight back into the HELOC. This pushes the balance even lower and frees up more available credit for the next opportunity. It also lowers the interest charged which makes future repayment easier. Every win accelerates the whole system. When you begin to exclusively spend your interest earned only, you achieve Pillar 4, only spend interest never principal.
Example: The opportunity produces 10,000 of profit. That 10,000 is deposited directly into the HELOC, immediately lowering the balance and daily interest. Available credit increases, making the next opportunity easier to fund. Each win compounds momentum.
Traditional Mortgage: Any profit you earn sits in checking or savings and does not affect your mortgage. The mortgage balance does not change until your next payment and the profit does not reduce interest or speed up your timeline. Your wins do not create momentum.
Example: The 10,000 profit sits in checking or savings. The mortgage balance does not change until the next scheduled payment, and interest continues accruing at the same pace. The profit creates no acceleration.
A HELOC uses simple interest calculated on the average daily balance, typically averaged over a 30 day billing cycle. Interest is only charged on the balance that actually exists each day, not on the original loan amount. Every dollar that flows into the HELOC immediately lowers the balance and reduces the interest being calculated for that cycle. This makes cash flow timing just as important as the amount paid, and allows ordinary income to actively reduce interest without requiring extra payments.
Example: Assume a HELOC balance of 175,000 at 7 percent simple daily interest. If the required monthly payment is interest only, the monthly interest is about 1,021 calculated as 175,000 × 0.07 ÷ 12. When a 6,000 paycheck flows into the HELOC, the balance immediately drops to 169,000 and interest for that month is calculated on the lower balance. If the homeowner chooses to apply an additional 1,000 toward principal, the balance drops further to 168,000, permanently reducing future interest.
How Mortgage Interest Works: A traditional mortgage uses amortized interest, which means interest is calculated on a fixed payment schedule rather than on the changing daily balance. Even though payments are made monthly, interest is front loaded and calculated as if the full balance is outstanding for long periods of time. The timing of income and extra cash flow does not reduce interest until a scheduled payment is applied, and most early payments primarily serve the lender before meaningful principal reduction begins.
Example: On a 175,000 mortgage at 3 percent, the monthly payment is fixed at about 737. Most of the early payment goes to interest and the balance only drops slightly each month. Even though the interest rate appears low, amortization causes more than 90,000 in interest to be paid over 30 years, which is roughly 51 percent of the original loan amount, meaning the homeowner pays back well over one and a half times what was originally borrowed. Extra payments require deliberate action and do not reduce interest until the next payment cycle. The lender controls the schedule and timing, not the homeowner.
HELOC System: You pay your credit cards from the HELOC as part of your monthly flow. The HELOC balance rises a little but your next paycheck drops it again. This lets you use the credit card for rewards or float while still using the HELOC to control interest costs. Everything works together and nothing interrupts your progress. YOU are in control.
Example: At month’s end, 3,000 is paid from the HELOC to clear the credit cards, raising the balance temporarily. The next 6,000 paycheck immediately drops the balance again. The interest impact is short lived because you are in control.
Traditional Mortgage: You pay credit cards from checking. The mortgage is never touched by this activity which means your payments and balances operate in completely separate worlds. Nothing you do with spending reduces mortgage interest.
Example: Credit cards are paid from checking. The mortgage balance is unaffected, and interest continues accruing at the same rate with no acceleration or benefit.
HELOC System: Your entire paycheck and income from all sources goes directly into the HELOC. This immediately pushes the balance down which reduces the daily interest charged. Your income is working the moment it enters the account. Instead of sitting in checking earning nothing your money is reducing interest and opening up more available credit. This single change gives middle class families a natural and ongoing advantage without needing to earn more or change their lifestyle.
Example: A 6,000 paycheck is deposited directly into the HELOC, immediately reducing the balance from 175,000 to 169,000. Daily interest drops the same day from about 33.56 per day to about 32.41 per day. Interest is now calculated on the lower balance every day until expenses are paid as the interest is based off the average 30 day balance.
Traditional Mortgage: Your paycheck lands in checking and sits there doing nothing. Meanwhile your mortgage balance stays the same until your one monthly payment leaves your account. All month long you pay maximum interest because nothing is lowering your mortgage balance between payments. Not to mention your mortgage often has escrow which is an annual/bi-annual payment for taxes and insurance that benefits the lender throughout the year until your bill is due.
Example: The 6,000 paycheck sits in checking. The mortgage balance remains at 175,000 for the entire month. Interest accrues daily on the full balance until the single monthly payment is applied.
HELOC System: You use the credit cards to pay your bills through the month. Since your paycheck lowered the balance when it came into your HELOC and your spending raises it only as needed the average daily balance stays lower. This reduces interest costs without requiring extra money. You still live your normal life but in a more efficient financial flow. No more escrow means you now benefit from that portion of your payments previously benefitting the lender.
Example: Monthly expenses of 3,000 are paid gradually on credit cards. The HELOC balance stays lower early in the month due to the paycheck deposit. Even as spending raises the balance, the average daily balance remains far below 175,000, reducing total interest for the month.
Traditional Mortgage: You spend money from checking and only touch the mortgage once a month. You get no benefit from your income between payment cycles which means you pay more interest and build equity very slowly.
Example: Expenses are paid from checking. The mortgage balance remains unchanged all month, so interest accrues on the full 175,000 regardless of income timing or spending behavior.
Click on the arrow pointing at this coin to learn more about paying your credit cards with your HELOC!