Velocity Banking, Infinite Banking, Debt Snowball, Or All 3

[@cmoss11467]

#3 - Snowball Scenario A: - Total debt payments = $250+800.17+1,139.54+$3,530 CF = $5,719.71 - Total interest paid = $14,963.95 - Payoff in 39.4 months = 3 years & 3.4 months (not 54 months/4.5 years per Denzel) - And less time and much less interest compared to VB as you’ll see. - Saves $50,880.71 interest vs Baseline

[@cmoss11467]

#7 - VB Scenario A with CBR is what Denzel ran his 1st month numbers on and this Snowball B is directly comparable to it. - These are all 3 of his strategies: Replace 3.75% fixed mortgage, car and CC with 7% 1st lien HELOC + 12 month, 0% $10,000 CC offer +$90/mo cash back rewards - Snowball B = Add debt consolidation (car & CC) to 7% 2nd position HELOC + 12 month, 0% $10,000 CC offer, and $90/mo cash back rewards. Summary: - Apply for 2nd position HELOC at 7% to payoff CC & Car Loan - Use $10,000 0%, $0 fee convenience check to reduce HELOC - Add Cash Back Rewards of $90/mo as extra payment - Then Snowball HELOC and Mortgage ($100 pyt on CC then move to HELOC in month 13) - Total interest paid = $13,548 - Payoff month = in 39th moth - Saves additional $1,415 vs Snowball alone - VB A with CBR = $24,119 interest - VB costs $10,571 MORE

[@cmoss11467]

#2 - Baseline Analysis: Original debts & payments (with the extra payments on the CC & Mortgage) - Used 25.99% for CC (“20-something” was stated) & Starting debt payments of 250+800.17+1,139.54 = $2,189.71 (no snowball applied as CC & car loan are paid off) - Total interest paid = $65,844.66 - Payoff month = 182

[@DenzelNapoleonRodriguez]

Where did you get the 1,139.54 number from if we are looking at the beginning of debt snowball. All I see is 250 from cc 800.17 is the car payment 150 redirect from mortgage and the starting cashflow of 3,530 My total dollar amount going toward the car is 4,730.17 per month

[@cmoss11467]

@@DenzelNapoleonRodriguez Regular mortgage payment of $989.54 + $150 extra payment = $1,139.54 + 250 + 800.17 = $2,189.71 total starting amount being applied to debts before addition of $3530 CF for total of $5,719.71 available for debt reduction. Same $5,917.71 applied to SB and VB examples.

[@DenzelNapoleonRodriguez]

I don't see a reply to this comment.

[@DenzelNapoleonRodriguez]

I see it now I can't see my own comments I have to go in my creator studio to see this which is so weird.

[@DenzelNapoleonRodriguez]

Alright so how long do you have to pay off the car loan?

[@cmoss11467]

#4 - Velocity Banking Scenario A: Costs $9,535.62 MORE than Snowball - Replace mortgage & other debt with 1st position HELOC at 7%, 12 mo promo rate, then Prime rate (assumed Prime stays at 7% after promo period - a reduction from today’s prime rate) - $10,000 convenience check, 0%, $0 fee for 12 months utilized, $100 payment. Transfer balance after 12 months to HELOC per video - Total Income In = $12,767 ($100 to CC, balance to HELOC) - Total Expense Out = $7,047.29 - Interest calculated based on 3 balances per video - (However, note calc error in video) - Total interest paid = $24,499.57 - Payoff in 41 months, 3 years & 5 months and COSTS $9,535.62 MORE THAN SNOWBALL

[@DenzelNapoleonRodriguez]

In the first year of velocity banking how much interest did you calculate I would pay on the first lien HELOC?

[@cmoss11467]

@@DenzelNapoleonRodriguez This scenario uses your average of 3 balances method that you have described countless times in your videos. Where I'm at right now, I don't have access to my spreadsheet... I'll get in and report back but in the meantime... how much interest did you get for the first year?

[@DenzelNapoleonRodriguez]

@@cmoss11467 I show mine at the bottom on the right

[@cmoss11467]

@@DenzelNapoleonRodriguez You got a total of $10,558.68 first year interest - You used $90 of cash back rewards to reduce the interest cost. As I, and others, have pointed out previously, this is a gimmick to make VB look better than it is. It would also be classified as a logic error in your analysis. Earning CBR's is not a function of VB, it's a function of how you pay for your expenses, and can be earned independently with either of the VB or DS strategies. If you're going to say the money earned from CBR's can be applied to VB then you have to apply it to DS as well or exclude it entirely. If you're going to use it, it's not an interest reduction, it's actually an extra payment. You received $90 somewhere else in your finances (CBR, dividends from a stock, birthday present from grandma) and decided to use it to reduce debt... as an extra payment. You're artificially reducing the "interest cost" figure to "juice", or as you've called it, "force" the VB results. If I applied the $90 CBR to the DS interest cost each month like you did, then the apples-to-apples comparable interest in the first year of DS is $7,518. If you exclude it from both, the VB 1st year interest is $11,817 and DS is $8,710. And finally, even if you maintain the logic error, (apply CBR to VB but not DS), VB still loses to DS. $90 x 40 months of CBR = $3,600 which is much less than the higher VB costs (without this error) of $6700 - $10,000+ depending on assumptions used.

[@DenzelNapoleonRodriguez]

where debt snowball derive from? Or who gets the most credit for teaching debt snowball? That would be Dave Ramsey. He says do not use credit cards at all ever. Most other financial teachers that fall under dave ramsey say the same thing. In reality most people who are taught how to leverage will not use credit cards to help reduce their debt faster which is why I do not include it when showing debt snowball pay down. The moment you do anything that benefits you when it comes to debt you are stepping into leverage and the velocity of money. You are increasing your velocity of money when leveraging debt at any capacity. So therefore if you use any tactic whatsoever of leverage you are giving people like myself and others credit and I'm pretty sure you yourself stays away from debt personally all together. If you use debt to your advantage then you are increasing your velocity of money. I get you hate the phrase velocity banking so guess what we can call it something else does not matter to me. I'm leveraging credit to my advantage so are my clients, I'm leveraging whole life insurance policies to my advantage and because you and i live in a free country I will share this ideas. May the best ideas win. Thank you for all your support. I'll keep dropping case studies and you can evaluate them.

[@HoweYaBen]

This is the video I needed to see. Ive been debating this lately. I think IBC makes the most sense for my situation

[@cmoss11467]

#1 - Denzel, your conclusions in this video are dead wrong! Debt Snowball beats Velocity Banking using your numbers and assumptions. I was hopeful in the early going of this that you actually ran the numbers this time, but it is clear you did not. VB costs $6,700-$10,700 more than DS and is slower not faster than DS. You were right at [18:00] when you asked “Does it makes sense to pay off a 3.75% debt with a 7% debt” and then stated that it ONLY makes sense IF you can drive the “effective” rate on the HELOC below the rates on existing debt. That is TRUE, but your case study doesn’t do it and is one more example that definitively proves VB is a marginal strategy at best and, at worst, when the higher risks involved are considered, is very bad financial advice. I implore those viewing this video (and other VB videos) to do as Denzel suggests and run these numbers using a spreadsheet before making risky, costly and often irrevocable “moves” with your real money.

[@cmoss11467]

Denzel, you should check your account... comments are disappearing. The total comment counter shows 24 (before this one) but only 14 are visible to the public. Two of the missing ones are mine and I didn't delete them... the other 8?? What's happening?

[@DenzelNapoleonRodriguez]

I have 5 comments from you on this one video and there numbered except for this comment that is all I have on my end

[@cmoss11467]

@@DenzelNapoleonRodriguez OK, I'll re-post the missing ones... but I am curious what the other 8 were about.

[@DenzelNapoleonRodriguez]

@@cmoss11467yeah I don’t know why it shows 15 replies under fuzzy comments there is only 6. Maybe some cursed or put a link. There is only 6 comments showing on my account

[@cmoss11467]

@@DenzelNapoleonRodriguez So, here's what I do know... my comments contain no profane or off-color elements and no links... and nothing else that violates KZbin guidelines. Only my public analysis and claims in response to the public analysis and claims you make in your content. My comments are clearly included in both the video comment count total and the total comment count for comment I'm replying to as the respective numbers increase each time I add a comment. Since they are in the counts and visible in my account, but not from my friend's account, they haven't been deleted by KZbin. The only other parties that can affect comments are me and you. All I can do is delete a comment and when I do, it reduces the counts, so it's not me making them disappear. The other hidden comments are not being deleted by those commenters or the totals would also reduce. So that leaves you... you are the only other party with the ability screen and block comments. If you're not directly screening and or blocking commentary in any way... then it appears that some setting you have turned on is inadvertently causing that to happen.

[@cmoss11467]

@@DenzelNapoleonRodriguez Looks like whatever the issue was has been cleared up. I'm now seeing all commentary and so is my friend. 🙂

[@InfiniteVelocityUSA]

IBC: send $12k to a policy when possible. Take A $9k policy loan for expenses. Legacy play.

[@InfiniteVelocityUSA]

Fund policy initially with money from savings. $15k to $30k.

[@cmoss11467]

Denzel, your video claims that it takes 4.5 year (or less) for the Debt Snowball (DS) strategy to pay off the debt. How much is the total interest cost you computed when you ran that scenario?

[@cmoss11467]

So, it's been over a week and no response Denzel? Why not? The answer to the question is... the amount of interest for straight-up Debt Snowball is $14,714. For Denzel's VB+ strategy, the interest cost is $24,119. In other words, Debt Snowball (without any commentary, added strategy) costs about $9,400 LESS than Denzel's recommended strategy. Replacing a 3.75% fixed rate mortgage with a variable 7% HELOC does not work and is a far riskier debt position to wind up in. Debt Snowball actually pays the debt off in less time than VB, not one year longer as claimed in this video.

[@DenzelNapoleonRodriguez]

@cherylmoss114 I’ve responded in other comments. As much as I enjoy our back and forth dialogue there are others I talk to as well. I can’t give you all my attention. I’ve made my claims and so have you. I believe with my strategy I can pay off the debt faster. I don’t know how you are running your numbers. I claim to go faster with the cc and car then I claim to pick up speed with the mortgage. My final conclusion was going with all 3 options.

[@cmoss11467]

@@DenzelNapoleonRodriguez Well, your conclusion using all 3 options costs at least $9,400 MORE than the Debt Snowball strategy. Saying you "believe" your strategy will pay off the debt off is not the same as proving it. I've backed up my claims with all the facts and assumptiuons I used. And, yes you do know how I'm running my numbers. We've already agreed elsewhere that we're using the same numbers and calculations on your VB+ strategy (all 3 options of VB + 7% 1st Pos HELOC + $10K conv ck). We got virtually the same results after the 1st 12 months, confirming we're both doing the same thing. That results in about $24,119 of total interest cost. However, you won't share your interest cost for the Debt Snowball scenario... you only claim it would be more than your VB+ strategy. I did share in detail how I got 14,714 total interest cost (with my spreadsheet method) and that was confirmed within 1 penny on an independent DS calculator online. Anyone, including you, can run that calculator in about 5 minutes. If you're so sure your strategy pays the debt off faster, why won't you share your DS interest total and how you got it?

[@cmoss11467]

@@DenzelNapoleonRodriguez Just to remind you, you claimed your VB+ strategy paid off the debt a whole year faster than DS, 3.5 years vs 4.5 years. It's smack in the top middle section of your whiteboard. Since this case has about $5,800 per month in excess cashflow, what you're claiming is that you saved about $69,600 over the DS strategy. Since the truth is about $9,400 in the opposite direction, you're off by about $79,000.

[@emojidinosaur7300]

@@cmoss11467 Denzel recommeneded strategy is becasue In no event shall Denzel Napoleon Rodriguez, or any affiliate organization be liable for any damages, lost profits, or lost data even if we have been informed of the possibility thereof. Linked Items may create a financial benefit for Denzel Napoleon Rodriguez

[@michealknight1304]

The only problem l have with this video and others as a 21 year old is, I HAVE NO DEBT and no income.

[@DenzelNapoleonRodriguez]

Are you in school or living with family?

[@shaunnichols8170]

Do you know of anybody who will do a first position HELOC on a manufacturer home?

[@DenzelNapoleonRodriguez]

@@shaunnichols8170 I don’t think any bank will. I haven’t seen it done yet.

[@InfiniteVelocityUSA]

Use all 3 if you can combine. Preferance is IBC. Second is VelocityBanking. Debt Snowball is effective but not as fast as IBC or VB.

[@cmoss11467]

Actually, using Denzel's numbers and assumptions in this video, the result is that Debt Snowball is faster and less costly than VB... $6,700-$10,000 less costly than VB depending on the assumptions. I haven't specifically analyzed IBC yet but Denzel himself said it's the slowest method and anything that slows the debt reduction down would lead to higher interest costs. And that would be common sense due to the drag of insurance expenses and mortality costs on the cash value available to use for debt reduction.

[@the_village_elder]

​@@cmoss11467do you have a channel to view and learn from or do you just go around checking KZbin creator's math?

[@cmoss11467]

@@the_village_elder I do not presently have a YT channel. Around June a friend of mine shared one of Christy Vann's VB videos to get my opinion about it. She was very excited to try VB out. After checking it out and many more of her videos, there was a clear pattern of math and logic errors as well as misrepresentations of financial concepts and some outright lies she was presenting on her public channel. Checked out other VB "gurus" too and found similar issues. So I now run their numbers and provide public commentary to correct the information being promoted on these sites. If you follow any of it, what you'll notice is I'm never been shown to have provided wrong information and, even when (rarely) challenged, it's never with any facts to back it up. And this isn't just benign, free "information" that's being promoted. It's a marketing funnel into paid services and numerous affiliate programs. Real people, whether they pay for the "advice" or just take action based on the "information" in the videos, are trying to make the best decisions with their real money. Following some of advice given on these channels has and will do financial harm, sometimes a great deal of harm. Even when two strategies generate similar numerical results, the VB guru's strategy often puts the person/couple in a much riskier financial position. The risks and warnings about what can go wrong are rarely, if ever, discussed and major conflicts of interest are largely undisclosed. The most egregious gurus are the ones, like Christy, who secretly block critical commentary so that their viewers don't even know there are real and costly problems with what they're being shown and told. I do believe in karma in these situations and eventually the truth will win.

[@emojidinosaur7300]

what is infinite Velocity??

[@likes-yv3lj]

What’s the best thing to do with $25k

[@DenzelNapoleonRodriguez]

I honestly don’t know too many factors and opportunities to know what is best to do with 25k. I know for my personal situation what I would with 25k but that might not be the same for you. I would need more information

[@likes-yv3lj]

@@DenzelNapoleonRodriguez what would you do with that amount in cash?

[@DenzelNapoleonRodriguez]

In my personal situation it would go in my cash value life insurance policy. I’ve been funding them for years now and I have additional MEC space so until I find the right opportunity I’m going to park in my cash value life insurance policy. Again that may not be the right thing for you to do