Is Velocity Banking Strategy a SCAM? Expert proves it doesn't work.

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9 ай бұрын

Velocity Banking Strategy is often a scam. It's supposedly a way to pay off your debt faster - maybe your mortgage - by doing debt consolidation and debt snowball using a revolving credit line like a Home Equity Line of Credit (HELOC) or a credit card. However, in many cases, the Velocity Banking strategy doesn't work. This video is velocity banking explained: I explain and demonstrate why using velocity banking could take longer to pay off your debt and cost you more in interest expenses. Velocity banking almost certainly will not work to pay down debt faster when you are using a higher interest rate revolving loan to pay down a lower interest rate term loan. It might work if you can use a lower interest rate revolving loan to pay down higher interest rate term loan. However, it is less common for someone who is burdened by a high rate term loan to be able to get a lower rate revolving loan.... which is why I make the general statement that Velocity Banking Doesn't Work. This is an important topic in personal finance. Watch the video to see the actual math for several scenarios. People interested in the debt snowball method and the debt avalanche method will find this useful, too. Check out some of the videos from Vanntastic finance, Velocity Channel, Suze Ormon and Dave Ramsey for other opinions on the topic. Some agree with me, some don't. I showed my math in full detail.
Your host in this video has been the CFO of several software companies and offers a lifetime of business experience to his audience. Will has an undergraduate degree in Economics, an MBA in finance from Cornell University, earned the CFA charter (Chartered Financial Analyst), and has worked as an equity research analyst at top Wall Street firms in addition to his experience running entrepreneurial companies.
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@dianesullivan5338 Ай бұрын

We have a financial crisis, caused by greedy, reckless financial institutions. Congress passes legislation requiring those institutions to be less greedy and reckless. The institutions then lobby to have those restrictions removed, usually in the name of “remaining competitive”. This leads to another financial crisis. It’s completely predictable, and we have been doing this dance since the Great Depression almost 100 years ago.

@HildaBennet Ай бұрын

the rules should be applicable to all banks - big or small. First; very few meaningful laws are passed and then this cycle of doing-undoing seems to support deregulation risking the economy and the faith in banks.

@FinnBraylon Ай бұрын

A lot of folks don't understand the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.

@JosephineKenney Ай бұрын

Well, I've been researching advisors lately because the market news I've been seeing hasn't been that positive. Who is the individual who helped you, and is he or she still around?

@FinnBraylon Ай бұрын

I work with Sonya Lee Mitchell as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.

@JosephineKenney Ай бұрын

I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.

@masopha30201 5 ай бұрын

Velocity Banking actually is not just using a higher debt weapon to pay down your debts. The part that you forget to mention which is the greatest piece of Velocity Banking is that you create more cash flow than your original cash flow and this is where the magic is at. The second benefit would be that you would have money available to you if something comes up because if you put all your cash flow into a mortgage you will not be able to use that money again. Thank you for showing how Velocity Banking works

@user-wy2ud4xx5q 2 ай бұрын

Well, if you make extra payments towards your debt principal amount while keeping the line of credit open 9n the side with zero balance for a rainy day, you cut down your debt faster while having the comfort of available line 9f credit in emergencies. If you didn't had to use line of credit for emergency and debt is paid off faster, you win. But If you had emergency you have zero balance line of credit to fall back on so extra payments towards the loan cannot be reused argument doesn't apply. Keeping it simple while cutting the debt faster should be the goal. Why arrive at destination via scenic route when highways exist for simpler yet similar outcome.

@masopha30201 2 ай бұрын

@@user-wy2ud4xx5q lol that is exactly what Velocity Banking is. You are the one creating a problem for yourself when your raining day comes. Now you have another payment and now you have to worry about what the amount will be going on that extra principal payment. See the problem that most people fall prey to is segregated income. But with Velocity Banking you will never fall prey to this trap! So you right keep life simple by having all your income moving in one direction.

@justincoffman4508 12 күн бұрын

@@user-wy2ud4xx5qif you use the line of credit as an emergency, you would create a payment due for that line! In the example above, you would be at a negative cashflow! VB gives you cashflow throughout the entire process.

@nwbw217 Күн бұрын

There is no interest the credit card is paid off during the grace period each month!

@dannyg8741 3 ай бұрын

I'm always willing to listen to both sides of the house on any subject, credentials don't mean shit anymore, your exactly correct math don't lie! I think your case would have been better made if you did a react video to one of the VB influencer's videos, breaking down their example and why it would not work. Your case here was kind of weak and difficult to follow along. This is just my observation and reading through most of the comments.

@JackAndTheBeanstalkr 27 күн бұрын

says the guy with no credentials...

@dannyg8741 27 күн бұрын

Yup .!.@JackAndTheBeanstalkr

@justincoffman4508 12 күн бұрын

@@JackAndTheBeanstalkrappeal to authority fallacy much?

@JackAndTheBeanstalkr 11 күн бұрын

@@justincoffman4508 better than the appeal to stupidity

@EshhhaBenjamite 2 сағат бұрын

A fair statement. I agree with you.

@remi3990 Ай бұрын

He is also not mentioning the cash flow from eliminating the debts. So the $644, $100 and $284 a month they had in payments to these 3 debts actually gets moved to their cashflow. That money, moving to a revolving account, can be used again if an emergency arises, instead of just being thrown at the debt and that’s it, you can’t use it anymore.

@lilymarcelle6521 2 ай бұрын

Velocity banking does work, it is dependent on the extra money you have available per month. It worked for me and it should work for majority of the people.

@ApartmentKing66 14 күн бұрын

Thank you. I'm sick of naysayers. Your credit score also goes up, something that doesn't happen when a credit union account is used.

@cristinafierro5815 3 ай бұрын

VB worked for me. Maybe you should say that it may not work for every scenario.

@YouAREyoubeYou 2 ай бұрын

Exactly

@therealtred4971 3 ай бұрын

I used this to pay down my debt super fast. It is in no way a scam; however, for people who have a spending problem and cannot control their spending and live on a budget, this could be bad.

@HerSoulVacation Ай бұрын

It's all about the difference between "amortized interest and simple interest" which I don't think you explained here.

@ABCD-si7px 2 ай бұрын

But Heloc’s DON’T have a higher interest rate the a mortgage! Read your disclosures and amortization charts! You are paying a massive amount of interest and will often pay twice what you borrowed.

@russellhaskett6830 Ай бұрын

Depends on the market. HELOCs are adjustable rate. My mortgage rate is 4%, and my HELOC is at 8.5. I ran a simulation to where the HELOC needs to be less than twice the rate of my mortgage to work to my benefit.

@ABCD-si7px Ай бұрын

@@russellhaskett6830 Read your mortgage disclosure again. You are very wrong about your rate.

@xrayguy1981 Ай бұрын

⁠@@russellhaskett6830faulty thinking. Heloc uses simple interest. Mortgage is amortized. If you look at your mortgage’s amortization schedule then you will see that you’re paying 2x times the purchase price over the life of the 30 yr mortgage. Your mortgage’s APR isn’t your actual interest rate. By following VB, you pay your income into the heloc, lowering your avg daily balance, and lowering your interest/payment due. Cashflow (and spending discipline) is the key to VB success.

@BrianBenjieRN 22 күн бұрын

@@russellhaskett6830you should look at the difference between amortized interest and simple interest.

@HollyMusic72 Ай бұрын

Wrong you don't take out money with cash advance. You put money into a credit card before one of your bills are due like electric bill propane bill etc. Once that money clears that you have put into your credit card then you pay your electric bill propane bill etc. It satisfies your monthly payment and freeze up that payment to put towards another that you're trying to pay down.

@kikirodriguez8293 22 күн бұрын

My issue with the first scenario is that I haven’t seen (personally) anybody saying to use high interest credit cards for velocity banking. I see people doing balance transfers to zero credit CC’s for anywhere from 12-18 months. I get these offers in the mail constantly: 4% balance transfer and then zero interest for 15 months, just got an offer yesterday in the mail. I could see that working for any high interest balances.

@24_Delta 2 ай бұрын

I ran my numbers in a couple of spreadsheet as well. I could see that with velocity banking (HELOC) I'd be able to pay down my remaining mortgage balance early, but not earlier than by making extra payments. My takeaway was that using the HELOC only provided the flexibility of having access to extra cash for an unbudgeted expense - at the cost of less money going toward the mortgage. The same is the case with making extra payments, but an unexpected expense would either have to be covered by credit, tapping into an emergency fund or reducing future additional principal payments until said expense is covered. Either way, velocity banking turned out to be a moderately higher interest version of what I can already do without a HELOC.

@AlexStyers 6 ай бұрын

The Velocity Banking process w/ a HELOC can actually work, provided that the HELOC has a lower rate than the mortgage. You're assuming in this video that the HELOC has no limit, and that the interest rate is higher than the mortgage itself. Something also to take into consideration is that the HELOC compounds daily, while the mortgage compounds monthly. Additionally, when you withdraw from the HELOC, you generally have a minimum amount you can take out (in my case, that is $5000 with the particular CU that I use). Also depends on the type of HELOC you get. (Mine's a 5/10 at a fixed rate 2 points lower than my mortgage(s)). So, in this case, Velocity banking mathematically works if you are dumping a mortgage onto the HELOC in chunks, or as a whole. Thanks for sharing this video though! Very helpful to see different sides. **Everyone's situation is different.

@bobjohnson1097 4 ай бұрын

No shit. If you get a lower rate....it's a lower rate. The VB didn't "work", you just got a lower interest loan to pay a higher interest loan.

@ABCD-si7px 2 ай бұрын

Plus the mortgage rate is not the actual interest rate. Read your disclosure. Look at an amortization chart.

@ericf.7081 26 күн бұрын

VB...The examples I've watched actually have a 10% heloc and a mortgage of 6.5%. And looks like it works

@holypunk12 5 күн бұрын

But why cant use your pay check to pay the loans direct...why need credit lines to pat it then swap pay check to credit line ? Whats the purpose of this ?!!

@mj38ua Ай бұрын

No one ive seen in velocity banking is talking about using a 21% interes credit card. Theyre talking about using a heloc and peloc at 9% interest. Additionally if you can payoff your loans in 13 months with no cashflow velocity banking isnt for you.

@husainkhan5772 8 ай бұрын

In your example where you consolidated all the balances into a credit card, you still subtracted only $1028 monthly. What happened to the extra money leftover from not making the monthly payments from the truck, credit cards that are now paid off? Did you assume it was spent elsewhere?

@shawnhandley548 6 ай бұрын

This guy on the video should be embarrassed

@heatherm2428 6 ай бұрын

There is no additional money in his example. The three payments prior to consolidation total $1,028 a month. 644+100+284=1,028

@heatherm2428 6 ай бұрын

@@shawnhandley548 Oh my goodness gracious. This guys shouldn't be embarrassed. Maybe rewatch the video and add up the three payments prior to the consolidation.

@Madkilljoy 6 ай бұрын

@@heatherm2428the 1028 is supposed to be available cash flow …. They shouldn’t be separated out

@Madkilljoy 6 ай бұрын

@heatherm2428 Also … with velocity banking when you make payments, you make that money available to you … you’re making extra payments but not breaking the bank … not sure how he or you are so confused

@svetlana2111100 8 ай бұрын

It depends on whether you're saving or borrowing. Compound interest is better for you if you're saving money in an account or being repaid for a loan. However, if you're borrowing money, you'll pay less over time with simple interest

@TheWilliamLeeShow 8 ай бұрын

That is correct. Thanks!

@ChavezDIY 4 ай бұрын

I accept your apology for bursting my bubble in thinking that velocity would work, Haha! You're right, mathematically it doesn't work out. After seeing all the positive comments towards velocity banking in other people's videos, it seems the benefit of velocity banking is the "positive emotions" derived from thinking that you're actually beating the system. I guess that's better than feeling miserable, right. Thanks for your video!

@TheWilliamLeeShow 3 ай бұрын

I think you nailed it! The benefit of VB is positive emotion from thinking you're doing something that works. Sure, it "works" in the sense that they're paying down debt, but it doesn't work in the sense that it's an inferior strategy to simply paying off a loan directly!

@xephael3485 24 күн бұрын

Your first mistake is believing bots and idiots making comments

@JoshJorg44 6 ай бұрын

The one scenario I think it can work is if you have a maxed put credit card like I did. I can lower my daily balance by paying it down with a good portion of my paycheck each week. That will save interest. Then pay my bills with the card and earn 5% cash back which will offset more interest. And make sure to pay more down than I use it every month and try yo pay my bills towards the end of the month. I should be able to offset interest two ways this way and pay it down with left over cash each month.

@lancercool1992 6 ай бұрын

what credit card are you using that pays 5% cash back on everything?

@Peaceonearthrn 6 ай бұрын

I'd love to know as well. Discover only pays on rotating items

@JoshJorg44 6 ай бұрын

@@lancercool1992 I was mistaken. I have heard of it, but I don't have it.

@about2088 4 ай бұрын

I have one via PenFed

@terry4574 3 ай бұрын

Pretty positive there is a Citi card with universal 4% CB

@globright9127 2 ай бұрын

Hes right. Did the math to see if it would benefit us to pay our 30-year mortgage off early, however, we realize that by putting all of our cashflow into the balance helps us pay off our home in only 8 years without taking out a line of credit like with velocity banking suggest! With velocity banking, we could pay it off in 14 years (16 years early) but you still pay interest and just paying extra every month saves us more money and the balance will be paid off even sooner! Everyones situation is different. Velocity banking may not work for everyone and there could be better alternatives to paying off debt.

@ABCD-si7px 2 ай бұрын

That doesn’t make sense. Could you explain it in mathematical terms by chance? How would you double the debt payoff time by paying off the same amount but using a heloc then paying that off ?

@corrycorry6734 4 ай бұрын

It’s excellent for if you have no “cash flow” and you can use one of your credit cards as the velocity instrument. That immediate cash flow gets you back in the black with a little a breathing room. Once you get that one paid off, you can use one of the more conservative methods to pay down your debt.

@WMDistraction 2 ай бұрын

But how does this help? Even the highest rate mortgages pale in comparison to average credit card interest. You’re doubling your interest for what end?

@matthewboone8406 6 ай бұрын

Youre missing a few details. Cash flow positivity is key, you dont get a 2nd lien HELOC, you get a 1st. Principle and time are your biggest enemies. The interest rate on a heloc only determines your payment that day.

@The_vincepryor 4 ай бұрын

I did not watch this because using a cc to rearrange you debt IS faulty. However a secured line of credit IS the way to go. 3% percent interest (only) works for me. Before i had $1500 of minimum cc payments. Using the line credit to pay the 30k of cc debt freed up $1500. Meaning that rearrangement added $600 to my bottom line monthly. Instead of being in YEARS of debt i am only in a few months of debt. The Key is creating a BUDGET and sticking with it. It will be hard for about 6 months. That beats years of struggle.

@itsatrap7215 6 ай бұрын

I'm not trying to be for or against either argument but you didn't take into account some money. You just reallocated the money used for the loans and not their total money allocated to loans + rest of their income. So it isn't an apples to apples comparison to see if you would of saved money if you ignore their other money.

@JordanService 20 күн бұрын

"Just deposit your extra money into the mortgage" -- is exactly why you don't get the VB idea. It's not about saving money but having more cash-flow at a marginal cost. I could see it being very useful for people. Not having cash-flow can be horrible and expensive... For example, the gas is out because you miss a 35 dollar payment, the Gas Co. can't come and turn it on for a week.... and then they charge you 100 reconnect fee. No cash-flow cost money and destroys your quality of life. With the VB method, a few months in you can have more breathing room. And maybe get there faster? (I haven't tried it though, but that seems to be the draw.)

@chuckmaddison2924 6 ай бұрын

It reminds me of an Amway rally I went to years ago. They all got up to show " Their plan" they were all the same, but with their personal story. I went because a relation was interested. The reps were their own best customer for product. It was about getting others into the system.

@joehenry9546 6 ай бұрын

Right off the bat. No one promoting velocity banking is suggesting getting a cash back loan from a credit card. Or at least not anyone reputable.

@DouglasForth 5 ай бұрын

Correct. Because none are reputable.

@altyrrell3088 5 ай бұрын

Thank you for this video. It makes more sense than the other videos recommended to me.

@backyardgrill-a7640 2 ай бұрын

It works and your title means 👎. I got out of debt using my cc and velocity banking.

@jaypesos6788 2 ай бұрын

What about including 0% interest first thirty day credit cards. Also cash back and rewards benefits?

@michaelday6987 4 ай бұрын

LOL. I've seen this video before. I mentioned on it that there is no way a CC minimum payment of $1500 is $100. There are some other channels where they stress that using debt tools that have a lower interest, but it is crazy how many people support this stuff. I wouldn't call it a scam since it does get people to focus on their finances, which is better than doing nothing.

@raingalloro3620 8 ай бұрын

Thank you for sharing this. I’ve been trying to find the cons to this. If you have time could you do one that shows it using this method with multiple credit cards can help someone. They are saying it will help your cash flow because you would be paying the bills anyway which would minus out your payment giving you more cash flow. They say you should concentrate on one card and sleep the other cards by putting enough bills on the card to equal the payment you would have paid until you can get the main card paid off. Hard to explain so hopefully you understand what I wrote lol

@itsatrap7215 6 ай бұрын

His example isn't even using the velocity method of paying down debt faster to save interest. He just took the money from the loans and consolidated it. Whereas, the velocity method is taking the money from the loans, plus the rest of your income to pay down the consolidated debt so your average principal is lower and you pay less interest. He kind of goofed on showing how it doesn't work because he didn't even use their example to prove it doesn't work.

@creativesolutions902 6 ай бұрын

Yes, it appears there’s a lot missing from his example here… What is not mentioned in velocity banking videos, is if there is a timing technique in the payment date/closing date… Or is it just make the payments on time by the due date, with the entire amount of available cash that you have? in examples with snowball/avalanche payment methods, the closing date is important… Does this matter with velocity banking?

@masopha30201 4 ай бұрын

@@creativesolutions902 it does matter if it times up but if it doesn’t time up as well then your utilization will always look high until you are able to pay off the debts

@Roboli-nr1mv 15 күн бұрын

You're wrong about many points. One important one is that interest is amortized on the mortgage and simple on the heloc which is a major discrepancy on your part

@user-jb4fr8of6n 2 ай бұрын

Sooooo, in another words, YOU ARE STILL IN THE MATRIX.

@mikep4869 3 ай бұрын

I think Dave Ramsey illustrates the 'Debt Snowball' method, which is no more than paydown your debts best you can. Consolidating may work in some circumstances, but there is no substitute to getting out of debt and then using debt responsibly. I always say, "You ruin a good story by getting the other side." Thanks for the 'other side'.

@c.i.1963 Ай бұрын

Your first scenario is not even velocity banking. 🙄 You can’t pay loans or credit cards (unless it’s a balance transfer) with a credit card. They specifically tell you to leave the amount of loan and credit card payments in your bank account to cover those payments. Calculate your monthly expenses, excluding mortgage and loans (e.g., groceries, gas, utilities, healthcare, hygiene items, etc). Then make a payment in the amount of your monthly expenses and cash flow to the credit card you’re looking to pay off first. This payment will cover the minimum payment and reduce the balance and ultimately the amount of interest being paid.

@darryl1617 9 ай бұрын

So substituting a loan with a lower interest rate with credit at a higher interest rate cost more. Plus they charge you a heap of fees for using the card. Makes sense. I can’t understand how anyone thinks it is a good idea.

@TheWilliamLeeShow 9 ай бұрын

I agree, but a ton of people fall for it.

@raiden031 7 ай бұрын

People think it works if they dont understand how interest accrues.

@TheDaman1111 7 ай бұрын

@raiden031 It does work. I use my credit card to do it and combine with cash flow with my CC rewards to further pay down my balance also

@raiden031 7 ай бұрын

@@TheDaman1111 if you are carrying a balance longer than a month and hence accruing any interest charges on that CC as part of your strategy, then you are without a doubt paying more interest than you otherwise would.

@TheDaman1111 7 ай бұрын

@@raiden031 Temporarily... but if you are disciplined and pay it down quickly, then you save in the long run... you definitely pay less interest when you chunking it at the mortgage and knocking down huge chunks at a time. Then you have built in cashflow as you are taking care of the minimum payment by depositing your income

@nickimillennium 4 ай бұрын

They justify velocity banking off of the idea that the money you pay will be revolving. But, if you already have a PLOC or HELOC then you have access to that credit line if you need it. You can borrow on it at any time.

@YouAREyoubeYou 2 ай бұрын

Hence the very point of VB. This guy is incorrect

@Guavagirl Ай бұрын

VB worked for me too. Read about it years ago and didn’t start it until last year. Had 3 years and 3 months left on car loan. Paid off in 3 Months! Yes it can work for some people.

@AnonymousPerson488 3 ай бұрын

There's a ton wrong with this video. The premise of VB is that you do have a pretty big margin in your personal budget to apply to your debt. No one advocates that you put a balance on a heloc and leave it outstanding with no payments for 30 years. Ridiculous.

@WMDistraction 2 ай бұрын

He also never said this in the video. He’s advocating just taking that margin and applying it to your mortgage directly. What this video made me realize is that velocity banking assumes the minimum payment is the only option until you magically take out a HELOC.

@AnonymousPerson488 Ай бұрын

@@WMDistraction But a person can't comfortably make massive payments to the mortgage for fear of not being able to get it back out. The heloc solves that problem.

@E_Gfree Ай бұрын

@@AnonymousPerson488how? You still have to pay the mortgage monthly. So you would need a significant amount of extra money outside of that to pay back the heloc or any personal loan in addition to your mortgage. Why wouldn’t you just put that significant amount into the mortgage without taking out a heloc instead?

@AnonymousPerson488 Ай бұрын

@E_Gfree 2 reasons, 1 is that the heloc allows you to make a bigger lump sum than you have at a given time so it works kind of like an advance in your paycheck. Second, because the heloc allows you to take money back out of the house if you have a bad month. Without the heloc you're locking your payments on the house up indefinitely.

@BrianBenjieRN 22 күн бұрын

@@E_Gfreesimply put its about paying down whatever the debt is and still having access to the money after it was used. The whole point of velocity banking is being liquid and recycling the same dollar

@ineedtheamberlamps1450 Ай бұрын

I'm trying to figure out how the balance ever goes down in the credit card scenario if you're just putting all your expenses on the card, and making roughly the equivalent amount payment 🤔

@danielbrettschneider770 6 ай бұрын

You sir, are providing a valuable public service. You may be too polite!

@birdenlightening5855 7 ай бұрын

I wrote a software to simulate my numbers using velocity banking . 60k debt 10 years (20k int) paid off early in 4 years saving about 10k of int

@TheWilliamLeeShow 7 ай бұрын

Great, glad to hear you checked the math. Now do the same thing but just assume you put the same amount of extra money straight into the loans instead of doing it with a Velocity Banking strategy. If - using Velocity Banking - you're using another loan with a lower interest rate than the loan you're trying to pay off, then VB might work for you. But if the loan has the same interest rate or a higher rate, then it probably will not work for you and you'd be better off just paying your extra cash directly into the loan.

@SalinasBMW 6 ай бұрын

@@TheWilliamLeeShowwhat about the min payment your not paying on the with the second loan? That payment or lack of payment gives your extra spending power each month.

@DouglasForth 5 ай бұрын

Smoke and mirrors, again. All borrowed money has to be repaid. All interest has to be paid. At best you're time-shifting payments. @@SalinasBMW

@bobjohnson1097 4 ай бұрын

How do people not understand that the only way to pay off any debt faster is to get a lower interest rate or pay more toward principle.

@YouAREyoubeYou 2 ай бұрын

Sir you are missing the fact that vb free up cash flow which is one of the primary points of vb. Since a simple interest cc payment is satisfied through paying your check onto the credit card-it frees up that minimum payment and then lowers the average daily balance.

@pufstoy3 8 ай бұрын

How much interest was saved between your different scenarios?

@wackykids 6 ай бұрын

Exactly- he let that out, and it’s supposed to be a huge amount- the very reason someone would pick velocity banking. Why wouldn’t he discuss this? What is Cornell teaching their students?

@zilvarro5766 5 ай бұрын

If you are wondering about the proclaimed huge savings in the VB videos: Those are kind of real, BUT they come from using the monthly extra cashflow (income - expenses) to cut down the mortgage instead of keeping it on a savings account, the LOC has nothing to do with that.

@tamorazana 5 ай бұрын

@@wackykids not much I can tell you. It is located in Ithaca, NY the deepest blue far left area in NYS this guy is 110% Bidonomics thru and thru. This video does NOT hurt me cuz I see how fast ive already climbed out of debt using VB, its the damage hes causing so many who could use VB to rid themselves of debt

@SolarSeeker45 3 ай бұрын

It's not that it doesn't work it's just that it works on psychology rather than math. You see velocity banking is designed to change the emotional impact of carrying a balance by making all scales equal. With ordinary finance your paycheck feels like a windfall and so it's very easy to spend spend spend and not have enough left over and you're force to charge charge charge to make up the difference in bad spending habits. If you start from the assumption of someone who has horrible financial habits when they switch to velocity banking it works amazing because now there's no windfall but only massive debt staring them in the face so they feel the emotional impact of being scant broke and deeply in debt so now they're highly motivated to pay off that debt.

@E_Gfree Ай бұрын

What I don’t get about velocity banking is the mortgage issue. If you are putting your entire paycheck into the heloc or loan, where are you getting the money for the actual mortgage you still have to pay monthly? The examples I’ve watched put your entire pay into the heloc.

@TebTengri 8 ай бұрын

Listening to the videos it almost sounded like a cult. Are there some instances that the concept would work? If your HELOC was equal to or 1% lower as it's simple vs compound interest? What about getting a new 0% APR 18 month intro card and as long as you paid that off before the interest hit you'd save a bit, especially if you had a method of paying things that got 1-2x points per dollar on the card?

@Matt-nx4w 7 ай бұрын

Simple vs. compound interest is another obfuscation thrown in by the VBers, along with saying the interest on a mortgage is "front loaded." Mortgage interest each month is based on the monthly balance. It is simple interest. It is only front loaded in the sense that you have a higher balance earlier in the mortgage. The 0% card could work, but think about it....would the banks offer 0% if most people had the discipline to pay it off?

@matthewboone8406 6 ай бұрын

@@Matt-nx4wthat would make sense if I made extra principle payments and my monthly payment went down but it doesn't. Mortgages don't recast every month. L.O.C.s recast daily. When talking about borrowing money, time and principle are the biggest enemies. There is no time machine so the best thing to do is attack the principle. When you change the nature of the loan from amortized to simple and you have a much smaller monthly "interest only" payment, a much larger chunk is paying off principle.

@zilvarro5766 5 ай бұрын

It could work if the interest is lower. Or with a slightly higher interest rate in case your contract does not allow for monthly extra payments but maybe just once every year / every few years. In conclusion, the only things that really help are: 1) lower interest rates 2) more monthly savings 3) being able to apply extra money to your debt ASAP (while keeping an emergency fund) In the VB videos for the LOC scenarios they use the massive gains from 2) and 3) for the mortgage to hide the fact that the LOC does not help you at all (it slightly improves how fast your money can be applied to your overall debt but that is offset by its higher interest rate).

@matthewboone8406 5 ай бұрын

@@zilvarro5766 I'm kinda confused how it's offset when the payoff on my home in particular would be 7 years and change with a VB strategy while my current mortgage is obviously 30. Nothing changed, just where my money went.

@TheWilliamLeeShow 9 ай бұрын

Let me know if you agree or disagree. If you disagree, why?

@leejohnson9646 7 ай бұрын

Sorry buddy velocity most definitely works once I understood it I applied it and got myself outta debt so expert don’t lead people away from financial freedom

@TheWilliamLeeShow 7 ай бұрын

If you do the math, which I did, and it shows that it does not work if applied a certain way, then to say otherwise is just wishful thinking. To be clear: I define "works" as meaning that a method does a better job than the alternative. VB clearly did NOT work the way this other KZfaqr presented it, yet they presented it to say "look at how great VB is."

@leejohnson9646 7 ай бұрын

well again it worked for me rapidly of course i focused on it the concept is money flow and it works just another debt tool and sir brought my credit score up significantly don't know whose example you broke down but I'm here to say if you're in debt this is a good way to get out fast @@TheWilliamLeeShow

@Matt-nx4w 7 ай бұрын

Yes, except it doesn't. If you had the money to pay down your debt, you could have done it just as fast and probably cheaper just paying it directly. If you disagree, can you point to the error in the spreadsheets?

@leejohnson9646 7 ай бұрын

@@Matt-nx4w if I had just payed the bill now that’s money out of my bank now it’s gone can’t use it again however if my pay goes directly on a debt tool it pays that down and pays the bill and I still have cash flow I’m not saying this is the only way to do something or best way or there’s no other way just saying it worked for me and for myself any good advice to bring wealth and control over my money is welcome I’m not downing no strategy

@ericjones8970 6 ай бұрын

Your math was on a truck loan that is almost paid off when the interest is a fraction of that in the front end. Re-do it as a new loan at 7000 that’s rolled into a card under the same scenario and see it all makes sense.

@JoseBatista-sh7io Ай бұрын

I just started velocity banking And I’m still studying every which way to learn more. My first month I was able to pay off two credit card balances? I don’t know how that happened but I ended up having money to pay all my bills and advance on paying off debt. Sure you will pay a little bit of interest but it beats paying the bank in overdraft fee which I’ve done on countless times. Velocity banking also how’s allowed me to have the money or the ability to pay my bills without fear of not having the finances to pay them with. The biggest key to anyone is you have to be consistent and always put what you will need into your source of payments whether a Credit card or a HELOC however you are receiving the finances make sure that your funds are always there otherwise the velocity banking will not work.

@thomaschew2191 6 ай бұрын

Thank you for this presentation. All of the VB videos I have watched, while the presenter is confidant it works, it is just simply too confusing, and I say this as someone with a considerable amount of college level math. I also say this as someone that has no debt and thus I'm not influenced by the fog of debt, which I assume is the condition of many of those who might find VB attractive.

@grant9904 7 ай бұрын

I was recommended the exact channel you are referencing for the examples. Specifically, the mortgage video in your second example. I instantly recognized it was snake oil, and even set up my own tables identical to what you set up. I think you needed to point out some perverse incentives of the individual behind the video, as she links to place offering a LOC. Of course it's the best thing ever! She's the one selling the idea. I think your video would best be concluded with asking someone believing in velocity banking what their goals are. If someone is trying to pay down a mortgage quicker, then the natural action to take is to put disposable income towards the principal. What is completely unintuitive is telling someone to instead go into even MORE debt at a HIGHER interest rate calculated daily and apply that to the mortgage. Even pretending that in the most ideal world that this could put someone further ahead, it's picking up pennies in front of the steam roller. Someone could easily be ruined as a result. One last thought that I had about the video we both watched, the title was saving something like $69,000 in 23 months. Going into $10,000 in debt to make a lump sum payment does not mean that someone will magically find and extra $69,000 in their bank account after 2 years. The entire selling point of her video is after 28 years, someone will "save" $69,000, all while taking what's possibly the riskiest way to get there. The balance sheet of the debtor in this example is still on the hook for the same monthly payment, the $10,000 HELOC at a higher rate and the daily interest that comes with it. Just absolute snake oil. Thank you for putting my thoughts into a video. I hope you get twice her 1.8 million views. Unfortunately, people don't want to watch a debunking video, they want to watch the magical solution video.

@TheWilliamLeeShow 7 ай бұрын

Thanks so much for taking the time to comment. I agree... people are looking for a solution, and these channels present VB as something almost too good to be true, and people just want to take it and run with it. Unfortunately it doesn't work.

@Madkilljoy 6 ай бұрын

Everyone that has tried it keeps saying it works wonders … maybe y’all are both just bad at finances and math?

@kathleenbrown6734 6 ай бұрын

what it does is satisfying a pay e t i the one using bills to post there. Then that pmt can be moved to one of the cards your working on plus the reg pmt which lowers the principle and interest. This should pay it off sooner. Thats what I can see but she would not comment to me. I was using a credit card to help pay off a high interest month with larger pmts and lower the interest. Kinda seems like this works.

@zilvarro5766 5 ай бұрын

The thing that makes it seem so convincing, is that the 69k savings in interest are real, but they come from using the excess money to regularly cut down the mortgage (as opposed to keeping it on a savings account or spending it). The whole VB/LOC stuff has nothing to do with those savings, and they use those savings to cover up that the LOC will actually lose you some money.

@ABCD-si7px 2 ай бұрын

Mortgage rates are not higher. Read your disclosures and amortization charts.

@Jp87089 6 ай бұрын

Hey mate add all the interest rates on all the different loans compared to the credit card. You for real?

@JamesWisecup 6 ай бұрын

In the first scenario, seems you'd save 200$ in interest putting it all into the CC. Total Interest from truck,cc,loan : 1341 Total Interest from using CC: 1141

@Leroy510 6 ай бұрын

Thanks for this video. I stumbled across this velocity banking concept on KZfaq a few weeks back and ran the numbers the same way you did. There’s surprisingly many videos out there on VB but very few of them actually compare just taking the extra cash flow and making extra payments.

@kathleenbrown6734 6 ай бұрын

and when you tell them they ignore you when I explained moving my extra money against one card .

@ksm300 6 ай бұрын

The first time I saw a velocity banking video I didn't need to do any math to know that method was bogus. Simple logic tells us consolidating a lower rate loan on to a higher interest rate loan will accrue more interest.

@notroll1279 3 ай бұрын

It's just a modern take of the "free lunch" or the "perpetuum mobile"... usually based on miscalculation or downright scam.

@nwbw217 Күн бұрын

Not if one loan has a grace period..

@bubblewrap4793 2 ай бұрын

Can we get a copy of your spreadsheet used in vid?

@tiffanygoss9380 6 ай бұрын

Excellent demonstration. These people want to believe in Velocity banking,

@jcrockett870 28 күн бұрын

It works if you spend less than you make... it's not a scam, its a technique, but you still need discipline.

@jonkong 16 күн бұрын

one big piece you forgot that is key to velocity banking is to use a credit card for all your monthly bills so you don't accrue interest in the HELOC until the end of the month when you pay your credit card off...then your income comes in to bring down the HELOC again. Credit card doesn't accrue interest unless you carry a balance after each cycle. I think you are over generalizing saying velocity banking is a scam when you don't really understand the details of how it works.

@SirKevinthefirst Ай бұрын

I think the argument is to use a line of credit not a credit card and that higher interest is still better than the lower mortgage interest because mortgage loans are amortization loans. I think thats the key thing that people need to fully learn. Not using a super high credit card interest rate on a car loan.

@ericjones8970 6 ай бұрын

Interest is front loaded. In your truck loan example if the interest in month 1 is merely $70 on a $644 payment, that truck is in its last year. Your example is deceptive. First 3 to 4 years interest in more than principle. You’re trying to keep people broke buster.

@MatthewMoeller 6 ай бұрын

This is the velocity trap. The interest/principal you see on an amortization schedule fools you into thinking you are knocking out lots of interest and no principal. But if you simply deduct a chunk of the original loan amount and rerun over 30 years it's the same. What you guys are really seeing is how expensive 30 years is to repay. Taking a smaller loan or the same loan over a smaller duration will save you money - always. The key takeaway for everyone should be that using higher interest to pay lower interest is always a bad idea.

@tamorazana 5 ай бұрын

@@MatthewMoeller not in my case or most others using VB correctly. The balances on the high interest isnt being carried for long at all so the amount in interest savings in tens or even hundreds of thousands

@DouglasForth 5 ай бұрын

It isn't. The math has been detailed in numerous videos. If you try to leverage expensive debt to pay off cheap debt you WILL lose money over simply paying your excess cash straight to the loan.@@tamorazana

@masopha30201 4 ай бұрын

@@MatthewMoeller the reason people choose 30 years and not shorter years is the monthly payment is affordable. No one is looking at the interest until you get introduced to getting out of debt. But interest isn’t just about which number is lower. It’s about how much of the payment you are making going towards interest. Now calculate that percentage and now you will know which interest rate is better

@workuse2012 Ай бұрын

Agreed the payment is suspiciously high unless this person is already making extra payments or the truck is in its last year.

@user-rr1do6cu7q 3 ай бұрын

Bottom line.... You should be supportive of debt elimination. I am sure others will find fault in your logic.

@mgordon1360 26 күн бұрын

So what is the interest on the 500000 ? What is the interest on the 490000. On the credit card you put you expenses plus your cash flow. The credit card interest charge goes down . I just did it and paid my own off in 6 months. If I had just used my cash flow in it would have beennnine months. Credit score goes up.. miles increase. I did not have to give up anything to do this. Now I am adding my extra to savings

@mgordon1360 26 күн бұрын

I changed my credit card bill pmt due Mid month

@happyintalmo 3 ай бұрын

Thanks for being detailed with your content. This is the information I have been looking for and I trust your advice.

@workuse2012 Ай бұрын

Both ways work, but velocity works because it gives you way more cash flow to work with and you make the debt payoff more convenient.

@SFXD24 Ай бұрын

Where does it give you more cash flow.

@justincoffman4508 11 күн бұрын

@@SFXD24paying of the truck, credit card, and loan off gives you $1,028 in cashflow. Since the paycheck is paid into the credit card, you have no payment on the credit card.

@waltercastro4928 7 ай бұрын

Hi from Costa Rica Thanks for you excellent information.

@tamorazana 5 ай бұрын

Right off the top though this guy is mixing up the mortgage and HELOC scenario. You dont transfer the mortgage into the HELOC, its using the HELOC to chunk an amount over off of the mortgage.

@TheWilliamLeeShow 5 ай бұрын

Looks like you didn't understand. That's exactly what I did.

@elmerhabon5389 8 ай бұрын

Could you make video how to pay off a car loan quicker with zero cash flow as the velocity banking channel teaching. Thanks

@TheWilliamLeeShow 8 ай бұрын

Great suggestion!

@elmerhabon5389 8 ай бұрын

Appreciate it

@TheDaman1111 7 ай бұрын

That won't work. You obviously need cashflow to do VB

@martywhitman6773 6 ай бұрын

Thank you I knew I wasn’t crazy

@monica9070 7 ай бұрын

But when ive seen examples, it wouldnt be "11 months". It would be 11 pay periods..

@heatherm2428 6 ай бұрын

@monica9070 - Rewatch the video.

@YouAREyoubeYou 2 ай бұрын

Weird because it worked for me-huh🤔

@xephael3485 24 күн бұрын

Prove it with real figures. Some people aren't idiots and don't believe your b*******.

@isabellesender 19 күн бұрын

True, however, the Velocity method gives you access to your cash flow in case of an emergency so you don't up your cc balance each time you lower it like a vicious cycle. It's just a simple method to create some monthly cash flow.

@Will2FlyHigh 9 ай бұрын

Thanks - nicely done

@TheWilliamLeeShow 8 ай бұрын

Many thanks!

@bottomup12 Ай бұрын

After seeing a few VB videos, I could not see the logic. Thanks for laying out scenarios in Excel. Notice how proponents of VB don’t. Some banks don’t even offer HELOCs anymore.

@gabrielsosa5793 Ай бұрын

Sp he only responds to positive comments and not negative? What a little worm.

@farzonaizatullaeva3427 3 ай бұрын

"Hello! As a foreign woman who moved to the USA two years ago with my daughter, navigating life as a single mom has been challenging, especially living paycheck to paycheck. Your channel has been a lifeline for me with your clear and thorough explanations. I'm genuinely grateful to have found your content and even more so that you offer it for free. Thank you for your generosity in sharing such valuable information without asking for anything in return."❤ Thank again

@TanyaAD138 17 күн бұрын

Once i saw her trying to rely on the future working out like her math did, i knew that not only VB was a bad idea, but a dangerous one. Way too much relying on future finances to trust VB.

@user-pd8kt1jv7d 8 ай бұрын

You were very thorough on listing your illustrious accomplishments (Cornell MBA, etc., etc.) and qualifications as to why YOU are an EXPERT qualified to debunk Velocity Banking. Yet despite your loquacity and absolutely wonderful charts, it seems you conveniently left out a couple of KEY talking points regarding the USE of open lines of credit and the differences of interest used/calculated on Mortgages, HELOC's and LOC's. 💥Compounding interest...and...Simple interest💥 being the most egregious omissions. I can't decide if you left this **MAJOR** point out in order to purposely deceive viewers (kind of like watching a magician employing sleight of hand🤣) or if you simply and truly do not understand the VB concept...as Cornell wouldn't dare teach such a concept!🤣 Nonetheless, both you and I know for CERTAIN that it's the **INTEREST** that KEEPS a person in DEBT, **NOT** the monthly payment of the debt.

@TheWilliamLeeShow 8 ай бұрын

Compound interest vs. Simple interest effectively makes no difference, although velocity banking people talk about it like it is "HUGE!!!!". I calculated the interest correctly in the examples in the video, and the example shows this person would be better off (meaning, they would pay less) by just paying down the loan directly and not bothering with the VB stuff. The example that I analyzed in the video was originally used by one prominent VB channel, and I proved her math was wrong. And a different prominent VB channel fact-checked me only to admit that I was correct... see link here to a video that he did about me, and see also his pinned comment admitting I was right. kzfaq.info/get/bejne/jNlzp5N919vNgp8.htmlsi=Kj4a-i3qoWyC90MD

@Enzo-uc1gm 8 ай бұрын

Compound interest vs Simple interest effectively makes no difference??? Really? 😂 Let me also point out that your case review of one of CV's videos was flawed from the start. In her video, she clearly stated that the individual in HER case study would use CONVENIENCE CHECKS to "transfer" debt, NOT using a cash advance to pay debt, as YOU stated in your video. Was this little oversight AGAIN the work of a Cornell-trained magician intent on deception? Because from that moment on, your numbers failed you and were absolutely wrong. They were based on YOUR "version" of her case study and not on the actual facts clearly stated in her video. ***Regarding Compounding interest vs Simple interest, could you please enlighten me and my fellow non-Cornell-MBA plebs with an in-depth explanation on how there is "effectively no difference" between the two?*** As the great Ted Knight stated in the hilarious classic, Caddy Shack: "Wellllllllll???...We're waiting!!"

@user-pd8kt1jv7d 8 ай бұрын

Lies Lies Lies, Yeah! Denzel did NOT say that you were correct. What you actually did was CHANGE what CV said regarding CONVENIENCE CHECKS...You did your numbers work based on CASH ADVANCE numbers NOT CONVENIENCE (no fees) CHECKS...making your numbers ALL wrong. You seem like a banker shill more than anything else.@@TheWilliamLeeShow

@TnavresGaming 8 ай бұрын

@@TheWilliamLeeShow -- his video actually shows everyone's math was wrong, but you were the closest on interest. Until he pointed out where you place the PLOC affects the calculations.

@JC-hd2tt 7 ай бұрын

Mortgages are simple interest. Credit cards are compounding interest because they can charge interest on the interest. You can Google and KZfaq this to confirm. Also, there is no such thing as amortized interest, you’ll hear that term in VB videos.

@landonwinkler5835 4 ай бұрын

I am so glad I found your video I probably saw the same lady and was about to take out a heloc

@CM-up2tr 2 ай бұрын

You should create your own spreadsheet and create your own scenarios. I believe it works because you reduce interest fees, and whatever you save as interests becomes an additional payment.

@ccn8987 Ай бұрын

It worked for me --- it is about discipline and consistency - You are wrong, deal with it.

@dwoods1113 7 ай бұрын

What do you know about infinite banking?

@TheWilliamLeeShow 7 ай бұрын

I've looked at it a little but not enough yet to be able to comment on it. Looks pretty shaky to me, though.

@YouAREyoubeYou 2 ай бұрын

Shaky? Hum-what does that mean exactly? Read Becoming Your Own Banker by R Nelson Nash. You have to use participating whole life for it to work exactly how it is supposed to. However, some people use an IUL which is not the instrument that was made for IBC. I have one ( Insurance for 8 years MBA etc etc blah blah.)

@SFXD24 Ай бұрын

@@YouAREyoubeYouit means exactly what he said. Read his whole paragraph.

@sammartinez559 12 күн бұрын

I really miss Louis Rukeyser and similar type shows. The video was much like those award-winning shows. I know my friends are using the velocity banking process; but they rarely have any money to save each month. I know I can’t convince them that they are not making headway on wealth accumulation, but I enjoyed the video.

@JasonWeigand0681 6 күн бұрын

Vb worked for me. I paid my house off in six years.

@DadWil 7 ай бұрын

I'm glad you made this video.... I watched one velocity banking video and was totally confused by their math... Your math is much easier to follow and made sense... the velocity banking video I watched was more like a shell game... I do have a BBA so not entirely stupid... My strategy to pay down/off our mortgage was to pay it off on a weekly bases... my banker was not happy because more of the principle was paid off each month than if I paid it monthly.... Car loans we always paid off within the year... we take advantage of $0 payment 0% for the first 12 month car deals... Cash is king and Money in the bank beats a bank loan every day of the week. I'm debt free credit cards are paid off every month... no mortgage on the crap shack... no car loans... enough retirement savings to enjoy the two luxuries in life of eating and living indoors... and maybe a bit more

@TheWilliamLeeShow 7 ай бұрын

Excellent! You are 100% right! Thanks for sharing your strategy.

@KevinP32270 4 ай бұрын

THANKS.

@notsure7874 8 ай бұрын

Holy crap - 600 grand to pay off a 10 thousand dollar heloc loan - hell no! I'll pay the mortgage thank you!

@jameskinchen2148 2 ай бұрын

I’m sure the bank will let the HELOC go from $10K to $600K without bothering you.

@Mojo702 6 ай бұрын

What's the total paid/payoff time if you put the $10k heloc toward the mortgage every 5 mos. (As the example just before Scenario 4)? That's what the velocity banking videos I've seen show.

@alliehomes8943 5 ай бұрын

Thank you for the warning but your math is off.

@myronmanuirirangi 4 ай бұрын

Kudos to you The William Lee Show for attempting to debunk Velocity Banking. With respect, the only thing you proved is that you were reckless in your assumptions and lazy in your analysis of the numbers. Let’s start with some important assumptions that you failed to mention:

@pepeschley143 9 күн бұрын

I would love to see A KZfaq debate with a couple of the velocity Bakers!

@MrBretts1985 6 ай бұрын

Can you run it where you use the 10k heloc to recast your loan then reduce your monthly expenses then roll that towards the extra on the heloc and use a credit card that charges no interest as long as it's paid off at the end of the month. Then put your paychecks into the heloc to get a lower daily balance finally maybe a cc with a percentage cash back? I can't seem to do all the math to make this work, I did do the math on my mortgage with the extra I put aside putting towards saving to recast or just towards principal payments. It works out to pay off mortgage in 16yr 1mo. Vs 18yr. 9mo. Using recasting to create a snowball effect.

@renardrigaud8650 8 ай бұрын

Velocity baking is way better. I don’t know what you’re talking about.!

@TheWilliamLeeShow 8 ай бұрын

Cool picture on your YT profile. Re. Velocity Banking.... no, don't think so!

@user-tx5tw5vh6y Ай бұрын

What kind of idiot would transfer 12% car loan to 21% credit card and pay 4% transfer fee? You found the most idiotic example of VB and deBANKED IT. You're such a genius 😮

@roberthill4239 Ай бұрын

Out of the gate you are wrong they don't say to use a credit card. They say to use a LINEof credit.

@vaughncowan4055 Ай бұрын

The borrower is servant to the lender! 😂 The debt snowball method is the best method for getting out of debt!

@GenericHandle54321 5 ай бұрын

It seems like one benefit of using a home equity line to pay off a mortgage in chunks is that a person has access to their money again if they need it. If they just put that extra money into their primary mortgage instead of paying back a home equity line, that money is totally tied up in the mortgage and inaccessible instead of being available to them in an emergency.

@DouglasForth 5 ай бұрын

Everyone claims this, but it isn't so. You don't have access to the money you paid. That money is gone. The only thing you have access to is more borrowing, which you could do outside of VB.

@GenericHandle54321 5 ай бұрын

@@DouglasForth 🤣 Yes, since this comment, I have done more thinking and came to the same conclusion. I should delete it but I’ll leave it now so other people can see your correction to my line of reasoning. It seems the best and simplest way to pay off a mortgage early is just put all your extra money toward paying down the principal. But, I do still like the idea of having a home equity sitting there as an option to use if I needed it in a pinch.

@nwbw217 Күн бұрын

This makes no sense. You are paying down the credit cards each month before the grace period ends so the interest is ZERO.

@notsure7874 8 ай бұрын

One thing I've noticed, is that they often show a "cash flow" amount - an amount of income that exceeds their bills (including the credit cards, personal loans, yada yada) - and that amount of cash basically vanishes with their "velocity banking". It seems to ME that if you have 1200 / month more income than expenses it'd be better to use that to pay principal amounts directly rather than try to play a shell game and have that 1200 dollars "disappear" - while they're saying you're paying shit off faster than you were. If you have 1200 / month extra, and you're NOT paying down principal with it ... maybe you should be. They totally gloss over that their examples (the one I just saw anyway) the person was putting 1300 bucks / month of monthly cash income - in the bank to sit instead of paying principal. And when the "velocity banking" calculations were done, that 1300 bucks basically "vanished" - or rather was left in the "sweep account" meaning it was used to pay off principal. Which can and should be done regardless.

@notsure7874 8 ай бұрын

Oh and just to add to that - that example had a huge payment on a tiny loan that was about to go away - which turned the "cash flow" amount into almost 2 grand. If you're making 2 grand / month more than your bills, and you are NOT PAYING PRINCIPAL, you are an idiot, and the "velocity banking" is just going to "sweep" that money into paying off the HELOC instead of it going into your bank account. So how is that supposed to work for someone that's living paycheck to paycheck without any "extra" money? Using a HELOC to drop interest rates is one thing - I used a HELOC to pay off crippling credit card debt, and the interest per month dropped by over half - so now instead of 500 going out the window, over half of it goes to pay off the principal. THAT is how you get out of debt, and there is no magic silver bullet.

@bobjohnson1097 4 ай бұрын

Absolutely correct. I can't believe how gullible some of these folks are...or, they are just shills/bots for VB.

@darryljennings1176 Ай бұрын

MR. LEE, YOUR MATH IS WRONG, AND YOU OMITTED KEY FACTORS, THE BIGGEST BEING THAT A MORTGAGE INTEREST IS FRONT LOADED, THAT'S A HUGE DEAL, AND I KNOW YOU KNOW THIS, YOU ARE WAY TOO SMART TO PRESENT THIS THE WAY YOU DID, I THINK YOU HAVE AN AGENDA AND AN AXE TO GRIND, JUST MY OPINION.