Did you know that your mortgage can be used to dramatically increase your retirement savings? There are many ways to use your mortgage as a financial tool, but one of these ways that is most overlooked is that of using your mortgage to help you increase your efforts of preparing for retirement. The most aggressive of these methods has its root in a business fundamental that is taught in graduate and undergraduate advanced business programs throughout the nation. This fundamental is called the Time Value of Money. This fundamental has many variations and has been used in many different financial applications. For the purpose of mortgages and financial planning we will paraphrase this fundamental. The Time Value of Money states that a dollar today is worth more than it is at any time in the future.

This can be seen through signs of inflation. A dollar in 1930 had incredibly more purchasing power than a dollar has in present times. You could have purchased more with that dollar in 1930 than you can with the same dollar in present times. So if you had $100 today and invested it at 10 percent a year then after one year you would have $110. Compound this same investment over five years and you will have $161.05 that is a gain of over 60 percent. If you had not had that hundred dollars at the beginning of the five years but instead was promised it by someone at the end of the five years then at the end of the five years all you would have is $100. So the future value of that initial $100 could have been over 60 percent higher than over the course of the five year investment.

Your mortgage should be looked at in these same respects. The bank who holds your mortgage is promising to give you a piece of tangible property, your house, in 30 years or whatever the term of your loan in exchange for payment in dollars to be received in installments. These payments or installments that you make every month without fail could be invested in a number of different ways with a qualified financial planner. At the end of the term of your loan if you had given the payments to the bank then you would have a house that may or may not have appreciated in value, but the interest paid on the house will never equal the value the property may have accumulated in the term of the mortgage loan. But these same payments invested over the same time period could have purchased the property at its future value with money to spare. (Enough to retire on!)

Now I know that most people cant get around the fact that a mortgage payment is something that they cant avoid. This is inevitable its just a fact of life. But how can we reduce our mortgage payment enough that we are not in danger of being foreclosed upon so as to free up capital to invest in more lucrative areas. The fact is there are many mortgage programs out there that cater to this very idea. These programs are given the term Cash Flow Arms, and if used correctly these can become avenues to the process of wealth building. Its called redirecting capitol large corporations do it everyday. If it has been successful for corporations all over the nation dont you think that its important enough to consider for inclusion in your own financial strategy?