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This explanation makes absolutely no sense. It is not taking into account the fact that he has to pay interest on the $500 he drew from the HELOC

Great Video...But You Kind Of Made It Way More Confusing Then What It Has To Be😂. Basically All You Do Is Have Your Direct Deposit Go Onto Your Credit Card Instead Of Your Checking Account. Then You Pay Your Monthly Bills With That Card. Then You Repeat The Process Until A Card Is Paid Off Then Move To The Next Card.👍🏾

I love learning so much on financial topics.

It's great, but you forgot to calculate the 5$ cash advance the bank charge on each account you pay plus the daily interest. Is there another way to avoid these charges?

So use debt to pay off debt. Smart. 🙄

I have no idea why this video, doesn’t have way more likes 👍🏽

Can’t get a 12k credit card approval 😢

As of today, 30 yr mortgages are about 6.50% vs 9.37% for a HELOC, or 44% higher. There is no scenario where borrowing at a higher rate to pay down a lower rate loan makes sense. if you can refinance your first mortgage at a lower rate than your current loan, at little to no cost, then doing so would make sense. Other than that, pay down the loan as rapidly as you can. no need for any of this funky sleight of hand. It's telling that none of these videos include the payments and interest on the HELOC in their analysis.

If it sounds like a scam, and looks like a scam, smells like a scam, it probably is a scam. If it seems too good to be true, it probably is. Free advice is worth what you pay for. For credit cards, there are 0% balance transfer cards out there. You just have to pay the balance transfer fee which is usually around 3%. Then pay it off before the real interest rate kicks in. Mortgages do require the borrower to pay the majority of interest early in the life of the loan. That's why it's important to choose a home investment they will last for many years, and keep it long enough to build equity and enjoy the benefit of inflation, while keeping the same mortgage payment. Each year that own my home, my mortgage payment lowers, because rents and home values increase around me. Also, I rent a home out, so my tenants pay my mortgage.

This was a great video! Very well explained. My question has to do with paying the cards off. Are you just moving money around from one card to the other?

What's the difference whether I pay off my loan out of my checking or line of credit? I'll still have to pay off my loc out of my checking.

Meanwhile your current home starts to fall apart lol.

It’s probably good information but you are whispering

Thank you for the warning at the end!! I really would like to try this but my big fear is that I will just overspend, max out my credit card, and then not be able to pay any of my bills

I missing something. Why not just pay the 500 put of pocket, rather than from the HELOC? Im missing the part where the interest/debt gets paid on the HELOC?

I used this strategy to pay off my rv a year early.

One more thing, if the 46 dollars in cash back rewards are then thrown thrown at the credit card then then those 46 dollars lowers the ADB further more.

With abundant loc and investment loan available, SM using equity accumulated from mortgage payment is kinda outdated though.

Better off using cash flow to pay down debt.

So what would one do if you can not get a line of credit. Im sure this happens to more than a few people

Is infinite banking just a fancy term for life Insurance?

Assets minus Liabilities = Equity (AKA Capital) The premium and the loans are liabilities the Asset is the the insurance. This is where the funny business starts. What is left at the death of a person may still qualify for tax on the estate. Depending on the value of the home and other things not in the insurance policy. So sure the death benefit is tax free to the next person, but the estate will still be taxed. The beneficiary make get that income but they would then have to pay some of that to collect the property that was not covered. If they are doing infinite banking then they buy more insurance and take out the loan against it to buy the property. Then they are paying loans back on the same system. It is a loan treadmill. The whole thing is a sick joke. Income swallowed by premiums and loan repayments at interest forever teaching your family debt bondage to pumping up insurance company bottom lines and paying more for everything.

Up the sound level. It's hard to hear compared to other CZcams videos.

Thanks for your videos. I love watching them and they're so informative.

This persons concept of velocity banking is off a bit. Velocity banking uses all of your income to pay down debt and manage cash flow. He needs to review velocity banking again to understand.

Thank you!

I did Velocity Banking and knocked out $65K in 13 months before entering into a First Lien HELOC. But initially I didn't pay my mortgage and then pay my Line of Credit. I dumped all of my income (and my wife's) first into the Line of Credit this satisfying its payment, and then paid my bills from my Line of Credit which paid down the Line of Credit every month by the amount of my cash flow. Am I missing something ? It works like a charm. Oh I forgot to mention that I charged all of my expenses on my credit card and paid the credit card off every month to avoid any interest at all. The result was a ton of cash rewards. The bank was paying ME to use their card. Lol 🤣. And needless to say, my credit score skyrocketed.

Wouldn't Joe be in danger of losing his home anyway if he loses his job ?

well done

Awesome

What if, although you maybe can’t pay your rent directly with the CC. you can still withdraw the cash amount from the card. At that point you are paying all of your bills via cc

Honesty use this method: Owed/monthly payment That will give you a number The one that is closer to 1 is the one you pay first, that one will be your biggest cash bleed and free you up the most. 1st would be cc 1 2nd cc2 3rd cc3 as its the Using the formula up above. The interest rate is not important using this method.

He has to pay off the heloc every month. Why wouldn’t he just pay the extra $500 if he has it?

Yes i like velocity banking since it essentially get you not to park your money in a savings acct and yet paying higher rates on other loans. 1) It forces you to take that extra cash and pay off higher rates loans 2) you still have access to cash via revolving credit card or Home equity line of credit in case of emergency 3) BUT you don’t save that much interest on your HELOC by parking your salary in there since the rate on HELOC is high than mortgage usually and you don’t keep balance on HELOC to zero all month 4) you could achieve same result by making extra payments to your loans but it is more cumbersome plus everyone (including the banks tell that you must have savings). No you need access to cash like the large multinational corporation with their revolving credits (which are paid down by year end). 5) This type of approach is for folks that are not too familiar with finance (thus you need to keep watching the video for views and of course they sell you a service)6) HELOC are best since CREDIT CARD have limitations as to what you can pay (no mortgage etc…) 7. keep in mind that of the interest on your HELOC is higher than the mortgage than it only makes sense to pay a certain amount of mortgage at a time with your HELOC due the fact the interest is different but you only pay interest on helov thus increase your cash flor

Velocity banking is for people in debt. People with mortgages alone should get a first lien line of credit.

"promosm"

First, I thought higher interest rate on HELOC doesn't make sense instead of mortgage. Later, I did calculations. Paying off the HELOC in 10 years save lots of interest over 25 years mortgage even at a higher rate! The things I like about having a smaller HELOC vs mortgage: flexible payment, we can pay interest only or put all cash flow into it and immediately increase monthly cash flow. With a mortgage, we pay extra lumpsum prepayment but monthly payment remains the same until we pay off the mortgage. The key is to have a large cash flow and put all cashflow into the HELOC unless there's emergency.

Fantastic. I was able to pay off $1.2 million in less than 2 weeks.

You’re just advancing your income using credit. How does it make sense you’d be making more in payments while your income is the same? You are just leveraging debt. I was just going to say this but then I heard him say to consult our own financial advisor. Why would I to do that, does anyone even do that after watching a CZcams financial CZcams video? Watch from where you get your information, leveraging debt seems dangerous to me and alot of people come to you for financial advice whether you say so or not.

How do you get the mortgage paid off if every time you make a payment you go and borrow the same amount? Do you cash out all the investments at some point to pay it off?

This has got to be the dumbest strategy I have ever heard of. So you get a HELOC, use it to pay the principle of the mortgage, but they completely disregard the payment to the HELOC and the associated interest rate, which today is at 9%. So what you might save on one side of the coin you will pay on the other. You cannot borrow your way out of debt. You would be better off just paying an extra $500/month without the HELOC.

I have a degree in finance and years of experience in specifically mortgages. This method has zero financial advantages besides forcing undisciplined people into paying off their mortgage. The outcome is the same whether you use your leftover money and jam it into your mortgage debt every time or use a HELOC to prepay mortgage debt and deposit your pay into your HELOC. It’s literally the same and even worse to use the HELOC as it’s higher interest. The one advantage is you might be less inclined to spend money as you are always indebted to the HELOC so feel like you are broke all the time. But again, it’s literally the same as using leftover money to prepay your mortgage

Dont put $500 extra on a HELOC and tell people hey look i paid my debt faster. Of course because you're putting more money.

interest is irrelevant if you just pay off the debt quickly...dave ramsey says that too

VB has worked for me and I am teaching others to use it.

Will this work on a credit card with a zero balance

I’m so confused! Why not just pay the extra $500 with the mortgage payment and just budget $500 less for your expenses? I’m so lost

Inventing in the stock market or other investments instead of paying off the mortgage creates unrest in you mind. I believe paying of the mortgage is the best mental piece of mind.

If you get paid once a month, this is how it may go. If you’re paid weekly or bi-weekly, you pay all income when it’s received towards the LOC, reducing its daily average balance and the amount you pay interest on. If you make extra payments towards the loan, you can’t use that money for expenses anymore if anything comes up like a car repair. On an LOC, it’s essentially a built in emergency fund that you don’t need to build up for months. Typically you wouldn’t put the whole LOC amount towards the debt (you need room for monthly expenses and cushion), so say 70% or however much you could afford to pay if between 9-12 months with your excess cash flow. That way you aren’t getting trapped with higher interest for longer. Having the LOC for emergencies is the biggest upside as opposed to making additional payments. In a scenario where you are making the extra payment each month, you have no emergency fund to fall back on (assuming we’re starting from day one without savings. If we have an emergency fund, it probably took at least 6-12 months to build up, which causes you to pay more interest on your loan) you would have to resort to taking out another loan or hope you understand how credit works and use that. If you have the LOC and understand that it can help OR hurt you, you can use it for the emergency and then keep velocity banking it down. This is why I wouldn’t use the whole LOV amount towards the loan. Good overview though at least without going into all of the variables. All else being equal, it his situation is comparing the best case scenario for extra payments to the worst case scenario for velocity banking

This was a really interesting case study! Thanks for making another great video. Lots to consider