Dynamic Banking | Velocity Banking | Why Not Just Use A Checking Account?

In today's episode, we go over Dynamic Banking/Velocity Banking. A viewer asked "Why Not Just Use A Checking Account?" A good question that gets to the heart of maximizing your cash flow to eliminate debt and grow your wealth.
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View the transcript of this video here:

[OregonCashFlowPro]

Questions? Ask me anything! Thanks for watching!

[ericjones]

I've been using velocity banking for a while now and it works out perfectly. I use my credit cards to gain reward points. I have a credit score of 819. It's a variety of ways to use velocity banking that I have figured out. I would never leave my money sitting in a bank. Inflation itself will rip it apart. I pay all my bills with my credit card and pay them off through velocity banking. I will always have my money moving and never sitting.

[wmmarquez]

Good information. Do you have at least an emergency of fund of 3-6 months in your savings acct as everybody says?

[sofiasalamanca]

When you have a policy if $20k, how much you have to pay? I am confused about the monthly premiums..

[richp]

Another major point in scenario 2 is as you chunk at debt and you pay off each bill your cash flow increases. More cash flow the faster and better things work....
It plain works because if you just use your checking account you never want to put 100% of you income at your debt. Why because you need back up money each month just In case. With dynamic banking your back up money sits in the LOC. It a fantastic way of banking and wish I learned this sooner.
Good video 😎

[NGF-Life]

Great video, is velocity banking same as dynamic banking?

[matthewharrigan]

Why not use a margin loan for the LOC and dynamic banking? Stocks grow at around 10% over long periods, way more than 4-6%. M1 has a 2% interest rate, also way better. Would have to limit the amount withdrawn to 10-25% of account balance to minimize risk of a margin call, so initially a little slower, but then takes off

[michaelcraig]

a very thoughtful and patient explanation of the dynamic banking concept. thanks James.

[mychaelsmith]

I'm just putting this here in case someone falls for this trap. Mathematically, if the interest rate of the line of credit is bigger than or equal to the interest rate of the debt you're trying to pay off, there is no scenario where "velocity banking" will come out ahead of just paying extra on your mortgage with post-expenses income. This is the case, even in the optimal scenario, where a person's expenses are all due at the end of the month to minimize the average daily balance of the line of credit. This is due to the fact that mortgage interest is compounded daily. The only time this will work is if the rate on the line of credit is strictly less than the debt or the rate of return you get by using the credit on an investment.

[savealot]

As you explain it, it looks like it would be best to have all your due dates to be at the end of the month for credit cards etc,

[kontomylitis]

Heloc is not cheap. There's a one time coat associated with heloc, how did your calculation factor that into it