Understanding the Back-End Functionality
of the Program, and
Why it’s not Humanly Feasible
To Do the Same Thing
(or anything close to it) on Your Own:
The number of permutations of payment combinations that you could apply towards paying off your debt is a function of factorial math. Dusting off the algebra from high school, factorial math (x!) is taking the number of variables (x), in our case number of “debts”, and multiplying it by each successive whole number down to the number 1. So if you have six debts, the total number of combinations is 6x5x4x3x2x1, or 720 permutations. In other words, let’s assume you have $100 discretionary income remaining to pay towards your debts after your required minimum monthly payments. You could apply the $100 to any ONE of the six debts. You could apply it to any TWO of the debts: debt A & B, A & C, A & D, A & E, A & F, B & C, B & D, B & E, B & F, C & D…. etc. and so forth, all the way up to dividing the $100 among all six of the debts…
But that’s just part of the answer. The other part is to determine what the ratio of principal to interest is in each of those combinations for paying down debts… both before AND after the payment is made. Computing the existing ratios before applying discretionary income towards an extra principal payment shows the relative cost of interest for each debt combination, to be compared between debts, allowing the determination of which is the most “expensive” snapshot-in-time debt permutation. Computing what the ratios would be after applying discretionary income towards an extra principal payment reflects the effect (the impact) of applying the discretionary income for each particular permutation. When you have compound interest debts with an amortization schedule (like student loans, car loans, a mortgage, etc) your ratio changes every month with every payment, so the factorial computations need to be run again for each payment combination of your debts to determine 1) not only the effect the payment will have on the resulting ratio, but 2) if the $100 of discretionary income is divided among more than one debt, what the optimal portion would be to apply to each of the debts to have the biggest impact on the before & after ratios of interest to the total payment towards each debt.
It gets a bit more complicated when there’s a simple interest debt with a minimum payment that is variable based on the principal balance… such as with credit cards. With credit cards, as your balance decreases, so does your monthly minimum required payment (down to some floor, usually $25 or $35). This means that the ratio of interest to your total minimum required payment remains constant for those types of debts, ensuring the bank maintains a consistent profit margin on your minimum payment.
So the software takes into account the types of debts, individual terms, ratios, and grace periods of your debts, as well as the impact on your overall debt balance based on the ratios resulting from those terms. And because the combination of individual ratios changes from debt to debt (aside from simple interest debts like credit cards and lines of credit) for each minimum payment, the entire series of factorial permutations needs to be calculated for EACH SUCCESSIVE MONTH all the way through the date when the debts will be paid off.
It’s important to realize that the program is not just looking at your current month’s payments. It starts with your “snapshot in time” current financial picture, then calculates what the resulting picture looks like from this month’s optimal payments, then using those balances and payment terms, it computes the optimal ratios for the following month and computes those payments, followed by the next month, and the next and the next, until it reaches a debt balance of zero. If your picture changes at all, for any reason (pay raise, unexpected bill, expenses higher or lower than budgeted, etc), the program updates your “snapshot in time”, then recalculates everything all over again to give you absolute mathematical truth on your payoff date, interest remaining, scheduled strategic payments, interest accrual, interest cancellation, and so on. It does it real-time, 24/7, on-the-fly.
There is no way to do all of that by hand, or even with a spreadsheet. Spreadsheets, though helpful in crunching numbers via pre-programmed formulas, do not have the algorithm-based decision capability of the software we use. An algorithm is a piece of “if/then” decision-making code that integrates logic to accomplish a process. It prioritizes options to arrive at the best choice given a given set of parameters and conditions. Our program uses thousands of algorithms in its decision tree to arrive at the best outcome for the fastest results with the biggest savings. It handles all of the variables in context with the complete picture, simultaneously.
At various points throughout the payoff process, the optimal debt (or debts) to pay the $100 (in our illustrative example) towards will change. The software can project the payments months down the road as it does its calculations, and it knows when a particular debt is the optimal option one month, but a different debt (or debts) becomes the optimal option the following month. And at some point, one of the six debts will be paid-in-full, changing the factorial product from 720 options to 5x4x3x2x1, or 120 permutations, meaning that the $100 discretionary income can take a bigger bite out of principal for the remaining debts based on the ratios that exist at that point in time.
As you can see, it’s a whole TON of math to be done, and completely not a plausible option to compute by hand. Let’s suppose we’re in a situation where the software takes a 28 year debt portfolio and calculate a time savings down to 8.2 years. You would have to compute 8.2 years x 12 months of payments x 720 permutations x 2 for the before & after pictures of each ratio. In other words, you’d be running at least 141,696 individual calculations to come up with the same (or comparable) action plan that the software produces. And as soon as “LIFE” happens… the unexpected bill or the unexpected income, all of that work would need to be thrown out, and you’d have to start over with the newly revised income or expenses, because every single future payment combination in the action plan is dependent upon your RIGHT NOW snapshot-in-time financial picture.
That’s the beauty of the program… it recalculates it all on-the-fly as changes happen, sort of like how if you miss a turn or take a detour while driving with a GPS, the GPS auto-adjusts the route to get you back on track to your destination the fastest way possible.
The software also takes into account the ways different types of debt behave… The algorithms determine payments in the action plan based on weighing one debt against the others and prioritizing them based on the terms of the debts, while SIMULTANEOUSLY taking into consideration how much interest you can float (using the bank’s money at zero percent) and how much interest you can accrue (using your savings account resources to create a portion of principal to add to your discretionary payments). Further, it knows your monthly budget, so if you have $100 of discretionary income each month and your electric bill comes in under-budget by $20, it knows it now has $120 of discretionary income to apply to the action plan and recalculates everything accordingly. It works the same way that the banking system uses algorithms to maximize their profits by holding onto every penny until the last minute before transferring funds, so it maximizes the time-value of money.
There is no “free app”, YouTube video, book, course, or otherwise to substitute for our program. Nothing remotely comes close. Even if you are a genius, there aren’t enough hours in a day to compute it by hand. Think about it this way: If it took you just two minutes to compute the before-and-after ratios for each of the 720 combinations (assuming six debts), that would be 1440 minutes. Divided by 60 minutes per hour, that’s 24 solid hours of no eating, no sleeping, no bathroom breaks… Just math. Hopefully the picture is becoming clear.
You can see that it does much more than tell you to pay extra towards principal each month, as many people mistakenly think when they first look at the program. Many people just assume that the software simply figures out which debt is the most costly and tells you to pay extra towards the principal for that debt. If it were as simple as that, then yes, you could figure that out by hand. But as you’ve seen above, that’s not what the software does. It’s much more involved. And when you have a 30 year mortgage (360 months of payments for monthly or 780 payments for bi-weekly), plus car payments, plus credit cards, plus student loans… the seemingly small impact of each algorithmic payment decision has a HUGE cumulative and compounding impact over time.
And… you remain in control. If you decide to ignore a suggestion, you can tell the software to skip or adjust the payment on your action plan, and the software will recompute the action plan based on your inputs. It doesn’t force you to live an austere lifestyle. Instead, due to the interest float and accrual strategies, it supports your current lifestyle by working with your current spending trends and habits.
- The only requirements that the software has, in order to work, is that 1) you have to overall spend less than your income each month… and as little as $1 less will allow it to work, and 2) you have to have both a checking and savings account. But if you want to get out of debt, it’s a given that you absolutely MUST spend less than your income… There’s no other way to make progress otherwise… with ANY program. It’s simply math, not magic. The software simply creates your action plan based on your existing situation. If you are using the program and spend more than you earn, it will tell you the exact date that you will run out of money after depleting all of your financial resources… So it has 20/20 vision, looking forward at your financial future.
- If you have money you want to set aside, you don’t have to use it. Let’s say you have a savings of $50,000, you can tell the software what you want to do with it. You can tell it to set a portion (or all) of it aside as an emergency fund. You can tell it you’re taking a vacation to Tahiti with $10,000 of it, and that you want to keep an emergency fund of $20,000. The program does not require you to deplete your resources or change your lifestyle. It won’t make you eat “beans and rice” or spaghetti every day on the brink of starvation. You can still have your morning latte. Relax! Whatever you tell it you’re willing to do, the software will look at whatever it has remaining (that it’s allowed to use), and it will apply it to your action plan in the most effective combination to get you debt-free the fastest way possible.
And as complex as it is with calculating all of the math, it is so simple to use. It only takes about 10-15 minutes of time per month to keep it updated. And it very clearly tells you exactly what to pay, when to pay it, how much, and to/from which account. All you have to do is follow instructions. There’s no thinking, no stress, no emotional involvement, and no doubt. Just do it, and the program gets you out of debt in the shortest possible time!
Hopefully this explanation sheds some light on what makes our program so powerful.