Velocity Banking Explained for Dummies

Let's review the basics of Velocity Banking explained for Dummies.

If you are interested in mentorship and joining our group, please click the Google Form link below.

[MrLocomechanic]

I’ve been doing velocity banking for a while now and it works great!

[RedDragonProtection]

Yes, I've been building my soread sheet for a week now, and you showed me in 15 minutes.

[Trihope]

First, I really like the way you simplified it. Great job. Nice video.

I ran the math on your example. You said it would take 7 months to pay off the debt. If you calculate interest and how long it will take before he can stop turning his expenses into debt, it would actually take 10 months.

If you do a debt snowball, putting the extra $2000 toward the debt, it will be paid off in 8 months.

[raiden]

13:24 folks this summarizes that the only useful feature of velocity banking is that the LOC gives you an emergency fund while paying all your extra income towards debts. You can do the same thing with direct payments from your checking account with cash savings or have a CC on hand for emegenct. No need to move your money through a LOC on a regular basis.

[edcastillo]

You described crash test dummies correctly, but it’s not the same as the “dummies” book series on which you are basing your title. The latter “dummies” book series was intended to explain seemingly complex ideas into easily digestible information for, well, dummies. Not that they were actually dumb, but it was a great marketing ploy to make something relatable to those who didn’t understand something.

[greeneyes]

Do you stop auto pay on stuff to do this method?

[colinkakahi]

Is that a typical American average wage you are using for a Paycheck. Is that amount of Tax S5000 net or before tax? Because I have never had a wage of $5000 after tax and if I did and if most people did it would make life a hell of a lot easier.

[mrhvrbj]

Does it matter if your debt is a line of credit ?

[michelepreisner]

OK, so if you have multiple credit cards but can't pay a credit card with a credit card and No Line of credit. What do you do then?!

[benosgmail]

This is the explanation I've been looking for. it all makes sense now. but I have a question, I just started but my credit card is a $500 cc so, how would you VB with a situation like this? same scenario but with 500 credit limit instead of $25000.

[mj]

We can’t really put all
Of our income into the credit card, cuz like you said we can’t pay a cc with another cc, so do we just leave the full amounts in the checking account to be able to cover thise minimu payments of the credit cards due for that month? Amd throw everything else into the credit card that we are going to be using to charge our montly expenses?

Also another question when do we pay our credit card to prevent accruing interest? Or does it not matter as long as we pay it before the due date?
Thanks in advance, hopefully you answer my questions. 😊

[chrisper]

Why not park the $2000 in savings into the HELOC also; to further reduce the interest cost? You forgot to include the interest expense; but, I’m sure it’s the best strategy to also put the savings into the HELOC balance. This is how you make your money work for you, with discipline. Discipline, discipline; discipline.

[ryansun]

From my understanding, Velocity banking works on those loans that prohibit you from making principal only payment leisurely, is it correct? So we use a LOC which allows amortized payment or principle only payment to replace the interest only loans. In this case, though the LOC interest rate may higher like that in the video example 15% vs 6%, overtime, the interest payment is lower because the principal is moving down with time goes.

[velocity_banking_soldier]

Hello, I filled out the google form for mentorship. When will I be contacted?

[Peaceonearthrn]

Can you post that spread sheet? ❤😊 ty.

[markwhite]

If I use a credit card and use my whole paycheck that covers the minimum payment but I still have a large balance, say $14, 000, am I going to get charged interest? I've seen on here other who say no.

[markf.]

Borrowing money to use as a slush fund or emergency fund is dangerous for many people. Better to first establish an emergency fund and then do a debt snowball after that.

[richardraymond]

Watching this now. If after I've questions are you available for email or any form of contact?

[colinkakahi]

it looks good if you earn a good income. Why don't you always show us how to pay off debt with a low income rather than a high income. Easier to pay off debt with a high income but not with a low income. Common sense. If anyone could pay off debt with a low income. they are going to be able to see change and have more confidence.

[BradDiBenedetto]

Finally someone explained this well enough for me to confirm it is a fundamentally stupid idea. Thank you