How I Have Used a Heloc and Velocity Banking
Vložit
- čas přidán 7. 10. 2021
- ✅ Join the Education Center educationcenter.schoolofperso...
#schoolofpersonalfinance #personalfinance #richmccormack
In this video I share with you my personal experience using a Home Equity Line of Credit - HELOC and a version of Velocity Banking to build my net worth.
I also describe the basic differences between an amortized fixed rate loan and a revolving line of credit.
Subscribe Here: / @schoolofpersonalfinance
Share this video with a friend:
• How I Have Used a Helo...
Check out School of Personal Finance blog:
www.schoolofpersonalfinance.c...
★ CONNECT WITH RICH ON SOCIAL★
▸Twitter: / richmccormack
▸Instagram: / richmccormack04
▸Facebook: / richmccormack
▸Linked In: / richard-mccormack
To Becoming Great with Money,
Rich McCormack, CFP®
www.schoolofpersonalfinance.com
School of Personal Finance is an Investment Advisor registered with the State(s) of New York. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions. Please contact us at 914-299-3843 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions. Additionally, we recommend you compare any account reports from SPF with the account statements from your Custodian. Please notify us if you do not receive statements from your Custodian on at least a quarterly basis. Our current disclosure brochure, Form ADV Part 2, is available for your review upon request, and on our website, www.schoolofpersonalfinance.com. This disclosure brochure, or a summary of material changes made, is also provided to our clients on an annual basis.
What do you think? Anybody using a Heloc the same way?
I am. Got approved for a line of 115k HELOC. Using 50k down to purchase this rental duplex where I’m gonna live and let the person downstairs pay the mortgage on it. My HELOC is locked at 1.99% for 12 months so I’m gonna dump a lot of money to the principal as much as I can for a year.
@@oshitomaha nice!
@@oshitomaha assuming your tenant actually pays.. And with how things are going you might get called by your bank to pay up prematurely.
@@zenitfan4life that’s why I’m vetting tenants as much as possible. Credit no less than 720, and income must be 2.5X more than rent. I’m in Pennsylvania which is a landlord friendly state. I’ll fuckin evict the mfs if I got to. Better pay up.
@@oshitomaha nice, good stuff. Wishing you best of luck.
I did the same thing as you did with the HELOC. I purchased 9 properties with the HELOC. Some I had to buy 100% with the HELOC, others just the 25% down. It let me buy 11 properties now, 36 doors, over the last 19 years. It's been extra work because I kept adding, but it's given me the ability to retire and not be worried about having enough. Even though I always have been a saver, you also don't want to retire to poverty.
Good shit James!!
I’m trying to get onto the housing ladder at 40. I wish at 55 I will be testifying to genuine success with or without HELOC or Cash-out Refi
Thanks so much I was able to find her page and I already leave her a message.
And you ca lose it all in one month by using stupid things like credit cards and yes heloc is just a credit card that has your house as collateral
@jamesabdelkarim and if you are trying to get out of debt it’s the dumbest thing you could do ! You will always save money just paying extra on your debt Always save money and pay off faster by not using this stupid crap
Glad to find the clarification confirming that it does “work”… I quoted work because while it truly does, from experience, dissolve debt in ~4x speed. Although eventually, it occurred to me that in a perpetually inflationary landscape that it makes more sense to restructure and retain debt as a hedge against inflation. The same velocity function can be utilized instead to grow cashflowing assets rather than eliminating debt. Especially now with high inflation, the self-amortizing debt is a tax-advantaged asset - improvement of purchasing power over time which is a phantom income not subject to taxation. Control the environment rather than the rates - keep an open mind and research non-corrupted approaches to Infinite Banking - need to allow time for capitalization/startup cost, and it’s been enormously life-changing!
Well....I guess I'm glad you were able to identify that Velocity banking DOES work. We can all evolve. I only wish you had identified that elephant in the room that you advised people against it and are now talking about it's value.
Very interesting Thanks for sharing!
I think it’s ironic how he makes Videos about velocity banking don’t work. Now he’s making a video about velocity banking and how it works. Seems like he didn’t know what he was talking about, to begin with, to make comment on it.
More like he wasn’t clear about in what situations he would use vb and he’s trying to now
More like I watched a ton of videos on velocity banking all using that same stupid example that I walked through in that first video. I explained how it doesn’t work using high interest rate “debt tools” and shuffling all these account when at the end of the day just making the extra principal payments had the same result.
In this video I explained how I used a HELOC in my own life not even knowing that this was considered velocity banking. I thought it was common sense.
@@SchoolofPersonalFinance if you believe VBC is common sense, then you may be in for a rude awakening.
VBC is simply a beginning.
HELOC, CCs, 401Ks, etc. as “secondary” emergency controls are fine; however, they’re less than ideal & won’t pass the test in a down economy.
There are better tools & methods.
You’re still finding your way : there is so much to learn. However, you’re in a better place than most Americans. A lot of people will benefit from following along with your journey.
@@applechili2848 I don’t know anything about you but I get the feeling you are going to start selling me on infinite banking…
@@SchoolofPersonalFinance no. Some things aren’t meant for certain people at certain times.
I’m a fan of meeting people where they are.
And you seem to have it all figured out & working for you. At the end of the day, that’s what’s most important.
Many people may benefit from your perspective & progress. Meaning: there are quite a lot of people that think like you & can therefore benefit in getting out of debt & becoming debt free, to investors, to good debt managers.
There are levels & it’s good to see folks progress through certain levels & aspects of the financial system.
I am so glad that you made another video on this topic. Your previous video on Velocity Banking didn't say all of this but spoke on how it didn't work. I was using Velocity Banking at the time and I thought your comments were misleading. If you would, I would pull down that previous video and leave this one up. Thanks for coming clean. (And, yes, Dave would call you and me "crazy" 😂)
Thanks for your comment James. I made that first video after watching about 10 different CZcamsrs use that exact same scenario to sell their “coaching” services and it pissed me off lol.
@@SchoolofPersonalFinance Ah. Don't go with your emotions. You are very smart. I was one who commented on the lop sided and biased "velocity banking does not work and why" video. Now I know why. LOL. love this one.
@@SchoolofPersonalFinance Okay. That's fine and healthy. Just maybe address this openly. It's okay to change opinions or hold a very nuanced view, but it helps to address that if there is a seeming contradiction.
You should be mad ! I’m mad because I have had to help people that got scammed by Christy Vann and they are all upset they all ended yo deeper into debt instead of less debt !
We have 4 that are trying to find a lawyer to prosecute that Christy Vann !
Velocity banking is a scam it does not save money it does not pay off debt faster it’s only getting you deeper into debt !
But most of them lie and say amortization is a way of calculating interest instead of the truth that it’s a term used to describe the repayment structure @@SchoolofPersonalFinance
Brilliant!
Thanks!
Do you know what makes the largest difference between your house value increasing, and your mortgage payments. Having no mortgage!
Great video. While there is nothing funny about being in debt you made me laugh with how candid you were explaining how risky things are “could be out on the street” facts. Thanks for the information
Previous video said velocity banking doesn’t work, and now it works?
yes just watched that other one. maybe an evil twin?
My mortgage rate is lower than those of high yield savings accounts. It’s better for me to put my money in savings than pay down mortgage.
So if I'm renting and are looking to buy. I have money saved up for down payment but might be 3 to 4k short with closing costs etc. Does it make sense to get a line of credit (not home line equity line of credit) as a back up instead of borrowing out of my 401k and brokerage acct?
I think it makes sense…but you want to make sure you have enough liquidity. I would then focus on paying that line of credit off as soon as possible once you close.
Obviously I don’t know your situation so not personal advice here but the stronger your financial position is walking into a home purchase the happier you are going to be. You don’t want to feel financial stress right off the bat when buying a house.
Interest in the access to the software and the courses!
Nice! 👍 shoot me an email rich@schoolofpersonalfinance.com
How much was your heloc capacity? Thanks for sharing
low monthly payment of 39.99. ? ($480 a yr) sounds a little high, a low monthly payment would be more like $5.99. just saying .
Thanks for your comment Doug. People sell courses for thousands. I figured $39 a month with no commitment would allow people to go in and bang through everything in a few months and cancel if they are not getting value from it anymore…but maybe your right. Do you think if I did $97 per course or something like that it would be better?
@@SchoolofPersonalFinance sure make some money on people , just don't say low cost
Of course it works! It’s simple math . Just like she states!
Interested in the online portal
Hopefully you see this? Just for clarification. You bought the car with the helco, used all you income from paychecks to go towards the heloc, lived off a cc for the rest of you bills, then paid the cc with the heloc each month? The rinse and repeat?
What if I get a HELOC and just use my salary to pay off debts? Use HELOC for expenses (gas, groceries, etc...)? Then when debts are paid, just pay off HELOC?
Getting a 200k heloc this week...plan on putting everything on it and throwing our entire income at it.
Question: could you put an existing mortgage payment on the heloc also?
I loved my Hyundai Elantra back in 2004
Me too! Lol
Commenting for the algorithm
Thanks!
Hi, what bank is the best to apply for a heloc?
First savings bank
what do you mean dump your income into the heloc. if you take 10k out in heloc and you make 4k a month with 3k expenses you pay 4k on helpc down to 6, then with expenses bring balance back up to 9k and repeat next month?
Yes exactly.
Personal finance 102. Good stuff, man.
Cash is King!! you always need hidden cash. Not in a bank,credit union,etc. when the power goes out or computer systems crash you have no way of making any purchases. It has happened already is the past few years and will continue to happen.
Did you use the HELOC to pay for the background theme?
Check out some other videos. That’s my real background.
👍
Life is about taking risk
No doubt.
Getting rich is about mitigating risk.
I want to buy 10k of ibonds which is paying 9.62% and borrow from HELOC at 3.250%
You have to take into account the tax on the 9%, just a heads up. Also, that's if you are getting or have a 3.25% heloc. Also, the heloc has month payments, but does the bonds have monthly dividend or whatever? Because if not, you gonna be covering the heloc out of pocket til the bond pays off...
Have to have a home first bro then I can do anything
This is true…
It works because even wealthy people use other people’s money to finance assets-the difference being:
1. They already usually have the money to pay for the loans, but they borrow the money from other sources (as cheaply as possible) and INVEST their own money for the highest possible return.
2. In addition to investing, wealthy people will generate ideas in order to become wealth producers (i.e. businesses, real estate, bitcoin etc.) rather than wealth consumers.
Wealthy people also constantly study and network with others to find new ways to build wealth, and they also hire the best people they can find to manage wealth and avoid taxes.
Is this strategy risky? Yes-but is doable? Very much so.
Well said
Not talking bad but I have to say you didn't make a good financial decision to push all your money to the 401k.. they are junk plans these days and are the reason 90% Americans do not retire with enough money due to banking on the 401k
Now that you understand VBC, soon you can get into paying yourself, opportunity costs, savings, wealth protection, etc.
Glad to see that you’re doing well with the tools & knowledge that you have.
Unfortunately, this is only beginning.
You’re a disciplined investor; however, you will kick yourself when you realize how much money you could really be saving & earning.
It’s both fun & painful to watch your progression, but at least you’re learning & positively progressing.
Keep moving forward!
I have no clue what your talking about. You trying to sell me on infinite banking?
@@SchoolofPersonalFinance the quickest way to know something is a scam is if someone tries to sell you something.
I don’t have anything for sale.
Maybe you can school your audience on infinite banking?
I’m getting ready to watch your video on term & whole life insurance.
Baby steps…
@@applechili2848 sounds good! I would be happy to discuss how you are using infinite banking to grow your wealth.
I don’t claim to have it all figured out and am always looking to expand my knowledge.
Many different ways to financial freedom. Hit me up rich@schoolofpersonalfinance.com
didn't you make a video that velocity banking doesn't work?
It can work. The method most often suggested by other content creators is bad and expensive and doesn't work.
He did, and he is right. And he is still right now.
Using a debt at a high interest rate to pay a low interest rate debt does not work. This is the video he made last time.
Using a debt at a low interest rate to pay a high interest rate debt does work.
Using a debt at a low interest rate to buy an investment at a high interest rate does work as long as the investment does not crash. This is essentially the video we are commenting on.
Changed your mind I see lol 😂
Bitcoin is the feature investing in it now is the wisest thing to do now especially the current rise
Plan your investments with a good profitable expert and I can assure you in a few days or weeks your account will be more than you dream.
.
That won't bother you if you trade with a professional like Mr Benjamin
I heard that his strategies are really good
Yeah
My first Investment with Mr Benjamin earned me profits of over $24,320 US dollars and ever since then he has Been delivering
He's obviously the best I invested 2000USD with him and in 9 days I made a profit of 9101USD
Using a line of credit is the dumbest thing ever !
Your paying more interest than with a mortgage ! Not some times but every damn time ‘
You end up like the lady I helped last week that got another 10,000 in felt using this ignorant method
I had a HELOC at 2.75% that I used to buy homes that had positive cash flow every month and they appreciated 80% in value. I only put 20% down. Made 4x on my initial investment. You can call that dumb if you like.
Yeah…now that the rates are 8.5% and home prices are through the roof it doesn’t make sense anymore. I actually posted a short about that just a few days ago.
@@SchoolofPersonalFinance I invested my money into mutual funds ! Now I can buy any house I want an pay cash and I had no risk of ever losing it !
Just remember we saw thousands of people losing everything they had when the housing market crashed!
So I’m fine with my simple 12% gains each year while I do nothing ! See I’m lazy ! I want to put my money into something that lets it grown while I do nothing