Velocity Banking
What is Velocity Banking?
Velocity Banking is a financial strategy that helps you pay off debt faster, build wealth, and achieve financial independence. It uses various tools like home equity lines of credit (HELOCs), cash value life insurance, personal lines of credit, and credit cards to make the most of your money.
By leveraging the principles of efficient cash flow management and using various financial tools, you can take control of your finances and secure your future.
Why Choose Velocity Banking?
To get out of debt faster, we need to make extra payments. However, because emergencies can happen anytime, many people keep extra money aside instead of using it to pay down debt, which means they end up paying more interest.
Velocity Banking uses revolving credit (like HELOCs, personal lines of credit, credit cards, or cash value life insurance) to pay off debts such as mortgages, auto loans, student loans, and personal loans faster. With revolving credit, once you pay off what you borrowed, your credit limit goes back up, so you still have access to money if you need it.
Key Benefits of Velocity Banking
Accelerated Debt Repayment
Pay off high-interest debts faster, saving on interest and reducing your debt burden.
Cash Flow Optimization
Efficiently manage and use your income to maximize financial gains and minimize interest costs.
Lifelong Coverage & Growth
Using cash value life insurance offers a dual benefit of insurance protection and cash value growth.
How Velocity Banking Works
1. Set Up Your Revolving Credit Account:
Obtain a revolving line of credit such as a Home Equity Line of Credit (HELOC), personal line of credit, credit card or cash value life insurance. Ensure this account has a limit high enough to cover a significant portion of your debts.
2. Calculate Your Monthly Cash Flow
Determine your monthly income and expenses to understand your cash flow. Positive cash flow (income minus expenses) is essential for velocity banking to work effectively.
3. Make Lump-Sum Payments
Use the revolving credit account to make a lump-sum payment towards a large debt, like a mortgage or auto loan. This reduces the principal balance, which in turn reduces the interest charged on that debt.
4. Deposit All Income into the Revolving Credit Account
Deposit your entire paycheck or income into the revolving credit account. This reduces the average daily balance, thereby lowering the interest you pay on the revolving credit.
5. Pay Monthly Expenses from the Revolving Credit Account
Use the revolving credit account to pay for all your monthly expenses. This includes bills, groceries, and any other regular payments.
6. Repeat the Process
With your positive cash flow, continue to make lump-sum payments towards your large debts using the revolving credit account. Over time, the goal is to pay off these debts faster while still maintaining access to funds for emergencies.
Get Started with Velocity Banking
Ready to accelerate your financial goals? Contact us to learn how Velocity Banking can work for you.
