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you’re talking about two separate things. this was two separate things he was mentioning. this was mike adams he was helping someone in a unique situation. by using plastique.
A while ago, a friend told me about Chase Prime for Amazon. We buy a boatload of stuff from Amazon. Using the Prime Credit Card and paying it off before the grace period, I got debt-free. After a year's worth of spending, they gave me the points, adding up to $1000/year. I was doing VB before I knew it was called that. If I'm gonna buy all these things, might as well get points for it. Free money. BUT NEVER NEVER NEVER miss that grace period. Pay that thing off 100% of the time each month. PERIOD.
My aunt paid her 30 year mortgage off in 10 years, just by making extra payments toward the principal. She didn't have to do any of this hoopla or put any extra thought into it.
If I use a credit card for velocity banking, and pay it off before the end of the month; could I not use it to pay my mortgage with a credit card check?
I saw a video on this yesterday. In a nutshell its usijg your HELOC, Credit Card, or whatever other line of credit as your emergency fund. Its a game if musical chairs that comes with a risk. Let's say you own $100K on your house and you have $100K in the bank. You could pay off your mortgage but you don't have any money for emergencies. Now lets introduce a $100K line of credit. You can now use the $100K in your bank account to pay off your house and if an emergency occurs you can pull from the line of credit. That's really what you are doing on a smaller scale. Its a decent strategy, but you need to be aware of the risks. If something happens and you can't pay back the HELOC or credit card, you essentially converted your mortgage that accrrued monthly at a lower interest rate to a HELOC that accrues daily at a higher rate, or a credit card with a very high interest rate.
VB is a painstaking way to make a very small margin if you have extra money at the end of the month that you want to throw at the mortgage compared to the regular way of just making additional lump sum payments. Most of the touted benefits that come from the monthly vs daily compounding effect can easily be had by just paying all your monthly expenses on credit card and not paying it until your statement due date. The other way is just investing the money in anything that has a higher rate of return than your mortgage rate until the balance in the investment account is enough to wipe out the mortgage completely at which point you just redeem your investments and pay it off (or don't and just let the investment account keep growing while continuing to make your minimum monthly mortgage payment).
Using HELOCs or LOCs can be an effective strategy for those who are disciplined and want to pay down interest rate debt. It’s not for those looking to pay minimum payments and live beyond their means. That lifestyle is a never ending treadmill and no LOC will fix it.
This vid is bullshit. See the: Truth In Lending Act Your house was PAID IN DULL the day of the Closing. The banker TRICKED you into a NON-DISCLOSED 3rd Party INVESTMENT CONTRACT The year off part of Statement is the COUPON/CHECK/CREDIT due you
Thank you for this information. I wasn't quite sure how to go about this. I still have a question about what exactly is the difference between Plan Flat Dollar Amount, Plan Percentage, catch-up percentage, and catch-up percentage?
Ive been saying this to everyone once i understood what was going on!! So bragging about a 3% intrest rate means nothing...because eventually it becomes a 100% interest...
Just want to know, if velocity banking works for someone that has just started to get back on track with their financial leverage. My monthly income is social security, along with means of supplemental finances with my part-time job.
I paid off my $300k house in 3.5 years!! I used a HELCO in first position, and It worked like magic. You have to be a disciplined and stick to your plan.
The point of velocity banking is to reduce your interest which came out to be $92 b/c you put your whole paycheck into the line of credit. In your debt snowball way, your interest would be higher, so no, you do not end up in the same place. Do the math bro!
I think the only thing you're missing here is the fact that if you "re-assess" all of your debts and then somehow put them into the one debt your monthly payments will go down thus giving you more opportunity to move them faster.
I agree that the numbers match for both options. Option# 1: VB allows a person struggling with finances to have the $1,619.00 cash flow available in the LOC to use for emergency usage or other purchases. Option#2: Principle payments involves applying the cash flow $1,619.00 directly to the car's principle. It will bring the car payment down, but that cash flow is gone out of pocket forever not to be available if you are in need of the funds for what ever reason. One would have to consider if their goal is just to pay the car off with no concern of available funds OR if their goal is to pay the car down and have some cash flow as the car is being paid down. They both said it, its just math, but the goals must fir each person's situation should be clear to decide what method works for their situation. Peace to all in their financial journey 😊.
I agree that the numbers match for both options. Option# 1: VB allows a person struggling with finances to have the $1,619.00 cash flow available in the LOC to use for emergency usage or other purchases. Option#2: Principle payments involves applying the cash flow $1,619.00 directly to the car's principle. It will bring the car payment down, but that cash flow is gone out of pocket forever not to be available if you are in need of the funds for what ever reason. One would have to consider if their goal is just to pay the car off with no concern of available funds OR if their goal is to pay the car down and have some cash flow as the car is being paid down. They both said it, its just math, but the goals must fir each person's situation should be clear to decide what method works for their situation. Peace to all in their financial journey 😊.
No. They do not "match" VB costs more in interest There is zero cash flow with VB as ALL available money is thrown at the debt As for using a loan as a "reserve of cash", you can still do that when you pay extra directly to the car loan. You can have a LOC on the side that you do not use All in all using VB in this case is not cost effective, overly complex and adds risk
Im new at this, @4:25, so wouldn't you be in a 30 year contract? so what your saying $12000 yr X 30 = $360,000 and thats just intrest!!!! if thats correct?
So at 18:23 we are just not making anymore payments after the $12k??? That’s a faulty example. For validity, you would need to plug in the payments for all the months, not just the 12k payment.
Great story lots of good information. I want to start investing in real estate myself but I don’t have a lot of time two do lot of the legwork real estate investing takes. Turnkey companies work best for me. Can you suggest any reputable turnkey companies that I might be able to start talking to?
Velocity banking makes sense if you have a PLOC or HELOC with a decently low rate AND you are making more than you are spending. I agree the CC example makes no sense. In that case I'd take the extra $1400/month ( along with the original $600) and pay down the CC then once its paid put the $1400/month on the mortgage and personally I would take the $600 that they were paying on the CC and invest it in a tax deductible retirement savings account and take the tax savings from that each year and put that on the mortgage as well. You wouldn't pay the mortgage off quite as fast but you would also be building investments and having compound interest working for you instead of against you. The tax savings (say 30% of the $7200 you invest) is basically $2100 of 'free' money each year coming off your mortgage principle
lol I disagree, I never signed up for anything, but I am actively testing this over on my channel with 16k in debt, so we’ll see how it goes” actually” performs. So far, seeing results 🤷🏽♂️ Financial advisors outside of specialized tax situations have been rendered damn near irrelevant in regards to the returns they yield….🤷🏽♂️ The age of middle men is rapidly coming to an end
I recommend the following simple steps: 1. Live within your means. This doesn't mean that you can not borrow for big ticket items such as a house, new car, or even a dream holiday. It means ensuring that your income is sufficient to cover these costs and your normal living costs each month. 2. Use credit wisely. If you can afford to pay for something, why not use a credit card initially to purchase it and then pay off your credit card in full if this means no interest is payable. That way, you can earn interest on that money until you have to pay your credit card bill. If I need to pay for something really expensive with my credit card, I try to do this at the very beginning of my credit card period, meaning you can earn interest on the money needed to make the payment for upto 2 months. 3. Always pay down higher costing debt first. A zero mortgage balance feels great, but would you rather be paying 21% interest on a £10,000 credit card debt or 5% interest on a £10,000 mortgage. If you follow the above rules life will be happier.
It doesn't talk about savings and saving your money. Also this helps the banks better than the consumer because the banks get their mortgage paid quickly and get money from the line of credit which is paid quickly too. No defaults.
The only reason you would use velocity banking is to shorten the life of your mortgage. It's not to lower your monthly payments. It's to save you from paying hundreds of thousands of dollars in interest and shorten your 30 year mortgage down to 6 or 7 years.
