If this helped you, or you found it easy to follow along, please do me a favor and let me know here in the comments. Your feedback is important to me and helps me understand if I'm representing this info in a way that makes it easier to understand... or not.
VB has helped us gain cash flow. We just paid off two LOC. Been doing VB since last summer. It sometimes does seem like I’m just moving money around, but we’re gaining traction. We’ve failed at Dave Ramsey’s approach twice over the years since there seemed to be no wiggle room for living life. I’m sure it’s all a mental game, but VB has felt like so freeing by comparison.
@@selfdirectedDONNELL Taking a long sweet satisfying deep breath…and then getting right back to paying off more debt. Improved cash flow seems to restore the satisfaction with our efforts, optimism about the future, and determination to get free from debt. We haven’t yet imagined what it’ll be like in a couple of years when all the debt is gone…a few more deep satisfying breaths then maybe some downsizing.
Proud of you for putting your head down and focusing on a goal. We do things a bit different over here. We focus on building tax free income, reducing taxable income, and getting multiple uses out of the same dollar. I hope you’ll give us a chance to show you what you’re missing if only focused on the traditional linear approach (debt reduction first and then _____). It seems “easier” to focus on one thing until you see what we do. Then you can’t unsee it.
I think the three things that bring mental peace once, one is doing velocity banking is: 1) The ability to use one dollar twice, gives one a feeling of having more money or getting a raise 2) The parking of income in the LOC, pushing down the average daily balance, which lowers interest owed keeps one motivated 3) Lastly, because the LOC is no longer seen as bill, but a checking account, brings peace. People than grasp that the LOC has multiple functions. Checking account, emergency fund, savings account. Makes finances easier to handle. Just my opinion.
Many feel like that. My first question is how much cashflow do you have? If not much maybe VB isn’t the correct action, maybe snowball would be better.
The first step to successful investment is figuring your goals and risk tolerance either on your own or with the help of a financial professional but it's very advisable you make use of professional
This is very good information, thanks mucho. You guys also do an amazing job with your graphics. keep up the good work. u r helping to make us all wiser. blessings.
My problem with this method is it doesn't actually go down cause I'm using it as my bank so it goes back up with use, i do like how it meets the pymt since I'm parking money there. Also the interest is almost the same as the pymt. So on 10k its 200 pymt, all interest.
My only question is that all I hear on these channels is referring to an interest rate. The credit card I have has a 7 percent interest, my 2 car loans are 1.9 and 5.25 percent. To me moving my debt to a HELOC with a 12% rate does not seem to make a lot of sense.
12% seems extremely high. You’re right about leveraging “cheaper money”, but it’s not always a matter of looking at the interest rates. What we do here is the long math. Something you can easily do for your own situation: Take each car loan to term, how much interest did you pay? Now find a HELOC calculator (we like calculator.net This general calculation will work unless you’re in TX. Start with the amount to pay off your vehicles only (since that’s what we are talking about right now). Using your new available cashflow, how long will it take for you to pay off the HELOC? Whats the interest you would have paid? The amount of your available cashflow is what will make the difference here. Don’t forget to add in the monthly payment amts you were using to pay the car loans. 5.25 seems smaller than 12 until you see the amount over time. I’d also shop around because 12% is outrageous compared to the avg 8% we are seeing right now.
And you are right. It does not make any financial sense. You'll just end up paying more fees and interest. Now if you do want to reduce the interest you currently pay, just pay extra on that CC (i.e above minimal payment assuming of course you can afford it) until it is paid off. Next you can tackle the 5.25% car loan. The 1.9% car loan is best left alone as you easily can find safe investement options at 4+% (so if you have an extra 10 000$, paying down the car loan will only save you $190 of interest a year whilst putting that same $10 000 into a deposit will generate $400+ of interest income per year)
@@selfdirectedDONNELL "5.25 seems smaller than 12 until you see the amount over time. " No.. It is ALWAYS "smaller" , i.e cheaper. The HELOC route advocates paying extra on the debt... Using that same extra directly on the debt without the HELOC will always be cheaper when the debt is 5.25% and the HELOC is at 12%
If you’re doing debt snowball and using the cashflow to reduce the debt, then yes, you’re right most of the time. However, often people compare interest rates on a debt tool used for chunking and a LOC or loan making min payments. They are not the same math.
@@selfdirectedDONNELL Everytime I would listen to somebody about Velocity Banking they would never explain how you put whatever expenses on your credit card and pay more on the interest but your balance will go up as well so I was confused I just kept on wondering well you do still have to pay what your expenses are right? That you charged but you answered that other wise your just going in circles! So I get it now! Or do I still have it backwards?🤷♀️🤣
Whether you pay from your debt tool or not doesn’t matter, other than points or perks. The only thing that matters in regards to crushing the debt is to leave the cashflow on the tool and not in your bank acct. When you strip it all away, that is the actual benefit. Many like to make this complicated, but even if you paid all your bills from your checking and then dumped the rest into the debt tool, you’ll likely have the same result. The difference is if you aren’t budgeting and minding your cashflow, the more “cashflow” that sits on the debt tool, the less interest accumulated.
Hi great video, I noticed that my bank for my new HELOC, is going into my savings account and when I found out they said that they can't do anything at this point, and so I would be hard for my to use. it as a debt tool, what advise can you give me, thanks
Ok, this is important. Let’s say you put that savings to work (which I think you understand that part)… where would it be located that you couldn’t access it? Or are you saying if you create room on your balance, there a fear in maxing it out again? (Really appreciate you sharing this because you are not alone in feeling that way if my assumption is correct)
Man you have to simplify this you made a salad out of something too simple. I barely could listen to this video. Just compare yourself too much words too much jumping around compared to Zanntastic lady.
Absolutely love this feedback. I agree too many words. We cover this a lot, some in short detail and some in longer. Also many different topics are covered. My gift is the detail and my course is also the detail. I’m a tastic fan as well.
