META-PLAN DESCRIPTION
1 META-PLAN will immediately qualify millions more families to purchase homes prompting a building boom.
2 META-PLAN will enable families in $300,000 homes to accumulate over $400 million in a 60-year period.
3 META-PLAN will effectively transfer wealth from the wealthy to the middle and lower income segments.
4 META-PLAN will reduce monthly mortgage payments by 25%, relieving economic pressure on families.
5 META-PLAN will finance a family residence and the family portfolio with just their 25% reduced mortgage.
6 META-PLAN will provide a constant stream of investment into 90% of the North American stock market.
7 META-PLAN will help to stabilize stock market prices and stimulate the entire North American economy.
8 META-PLAN will benefit employers, employees, shareholders, suppliers, manufacturers and contractors.
9 META-PLAN will provide both the Canadian and American governments with many tax revenue streams
10 META-PLAN will greatly decrease risk exposure of META-PLAN mortgage holding financial institutions.
Note: All the cash flows for the 60-year period are shown in the one-page spreadsheet at:
http://www.billmcmillan.com/META-PLAN.html
The goal of meta-plan is not to pay off the mortgage, but to direct as much capital as possible into investment in the family's tax free and tax deferred portfolio investments. Expanding the mortgage annually will provide about 5% new capital to be invested in the homeowner’s portfolio every year. Since the mortgage is never intended to be paid off, the 60 year amortization period is of no significance, except to reduce the monthly payment by 25%, compared to a 25 year amortzation, and thus the income qualification for potential homeowners to carry the mortgage.
Authorized participating financial institutions would automatically remortgage at the end of each year, expanding the mortgage amount by the national real estate inflation rate, and at the same time extending the amortization period to its original length of 60 years. Part of the expanding portfolio value would be used to augment the monthly mortgage payments, so that the payments would remain fixed over the course of the 60 year plan. During that 60 year period, each individual family portfolio would inject hundreds of millions of dollars into the North American economy .
All available equity is deposited in the homeowner’s diversified stock market portfolio, which will grow many times faster than the value of the home, and will be essentially immune to the ups and downs of the real estate market. The average real estate inflation, and stock market growth figures used in the above chart are lower than the published long term averages (including all the ups and downs) for the past few decades in both the real estate and stock markets. If one million entry level home mortgages ($150,000) were registered in META-PLAN, they would direct over $200 million each into the economy over a 60 year period. That represents over $200 trillion! An extraordinary stimulus!
The META-PLAN portfolio would be tied to the mortgage for the family's primary residence only, and would be locked-in and non-transferable. Thus it would be government protected against sharks or predators. All available capital would be automatically invested in the North American S&P companies (SP1500 ISI and S&P/TSX) based on capitalization (so brokerage fees are almost totally elliminated). The plans would be managed by the financial institutions and accessible to the homeowner only by collapsing the plan. Any plan could be collapsed and settled by the client or by a court order at any time. Upon termination of a plan, the mortgage and all taxes would be paid, and the balance turned over to the planholder. The homeowner would then be free to buy another home with a new META-PLAN.
Implementing this plan would immediately qualify millions of lower income families to legitimately undertake home ownership, and the plan would be run by approved financial institutions at minimum cost to government, since all costs associated with registration, administration and operation, together with commissions, royalties, transaction fees and financial services costs associated with the plans, would be covered from within META-PLAN.
The META-PLAN structure would automatically maximize contributions channeled to Canadian and American registered TFSA, RRSP, Roth IRA and Roth 401k accounts, sending all funds into the planholder’s portfolio. META-PLAN would thus use the planholder’s primary residence to create enormous savings for the family at no additional cost above the low monthly mortgage payment. For families with an average home ($300,000), it would result in over $5000 additional annual disposable income over a conventional 25 year mortgage. This would boost demand for many commodities across the nation, and increase the planholder’s standard of living, enabling families to better care for basic health, social and quality of life needs.
John F. Kennedy stated, "A rising tide lifts all boats". This is a case in point. A wide implementation of META-PLAN would have far-reaching benefits in many segments of the economy. Its constant stream of investment would expand production. increase innovation and promote competition in the markets, empowering many corporations and promoting strong growth, which would benefit employees, shareholders, suppliers, manufacturers and contractors. The Canadian and American governments would both garner major tax benefits from all these sources. And having both the home and the portfolio as collateral for the mortgage would be a major advantage for participating financial institutions. META-PLAN represents a WIN-WIN-WIN proposition. But the biggest winners would be the homeowners – META-PLAN enables families to afford “tomorrow”.
to satisfy the mortgage holding financial institution.
This could be done with a conventional META-PLAN 25 year mortgage,
with an agreement to renew and extend the mortgage every year.
Such a META-PLAN would not reduce the monthly payment,
but would increase the size of the portfolio by another
$100 million over the course of the 60 years.
The details for a personally managed plan of this type,
can be verified with the spreadsheet by simply
changing the amortization period from 60 to 25 years.
The spreadsheet requires the Excel Analysis Toolpak to be activated.
(Tools, Add-ins, Analysis Toolpak)
DOWNLOAD META-PLAN.xls