Velocity Banking Vs Debt Snowball

[@ingewelch3560]

I liked your earliest lessons best. Easy to follow.

[@TruthOrConsequences2]

The other flaw in Dave Ramsey's recommendations is...a 15 year mortgage. Unless you bought a very modest priced house and can *easily* pay the larger payment (compared to the 30 year mortgage) then never, ever get a 15 year mortgage. There are a number of ways to simulate the 15 year. If you get strapped for cash then you'll get yourself into a big mess. With a 30 year just simply pay this lower payment until you get the train back on the tracks. But far and away the best method is the one Denzel points out here. I converted my mortgage into a 1st lien HELOC and have $35,000 anytime I need it. In addition to that, my payment required on the HELOC *decreases every month*. I direct deposit my paychecks into the HELOC and pay expenses from 0% credit cards keeping the overall balance *very low*. Every 6 months I pay off the cards with the HELOC. The amount of debt on the credit cards are the temporary reduction of the balance and the difference of the paychecks and the credit card paydown is the permanent reduction of the balance.

[@HooptyHoops]

Hey Rick! What bank allows you to finance in the Heloc and allows you to direct deposit to it? I would love to chat, so please PM me. I have 11 units and good credit.

[@DebtfreeMike]

Love how you refer to available DEBT as cash flow😂 regardless of method used you have $712 to apply to the debt. The ONLY reason it took longer was saving the $1000 emergency fund. You didn't have a rainy day fund, you had available debt. The person using the snowball could also borrow money.

[@coolinnovation6019]

Denzel I also want to know how to talk to the underwriters and explain why I want a simple interest line of credit so maybe they help in maybe approving me thank you 😉👍

[@coolinnovation6019]

Denzel so this us the deal I got 4 credit cards with debt and right now my credit is low, so it's a little difficult to get approved for even a balance transfer to a lower int. Rate. Any advice? And how to get rid of that debt?

[@Coachderrickdewitt]

Love the fact that you have 💰 when something goes down with velocity banking.

[@leonflores9461]

i like that professional look Denzel!!

[@coolinnovation6019]

Oh when u say dumping your income all into the line of credit? So I pay my expenses this way? Wont interest accrue? And I will end up paying more?

[@DenzelNapoleonRodriguez]

I made a mistake it would actually take 1 year and 8 months to pay off the car using the debt snowball method. Let me know what you guys think of this comparison and which strategy would you use.

[@Crymguy]

I believe that's wrong. If you take simple math the total payoff with interest is 11k. 11k divided by 712.42 is about 15 1/2 month, not 20 months. I know you probably added 2 months to build the debt snowball which technically is not part of the debt repayment timetable. Under velocity banking, there is no allotment for interest plus you underestimate for the chunk payoff. My numbers show the (vb) gets you about 2 maybe 3 months. You mention liquidity risk. Under the debt snowball, I could just get a line of credit and never use it. I think one thing you are overlooking is complexity risk. Under (vb) I have to constantly move money back and forth between my line and checking. VB presupposes that I will not be making a lumpsum withdrawal for my expenses but rather incremental withdrawals over the month. I have almost 100% of my expenses on automatic withdrawal using the (ds). With (vb) I have to worry about constantly making transfers or paying bills manually. This is a recipe for almost certain late fees or overdrawing my account. Banks and financial institutions, excuse the pun, bank on this. They make most of their money on such fees and penalties. Also, I'm confused about your opinion on investing. Are you saying to not invest, but rather continue to build your line of credit. I'd like to know your opinion.

[@DenzelNapoleonRodriguez]

I'm 22 if i can understand velocity banking then a grown man or woman can too. No excuses. I offset interest everytime when doing velocity banking. At 22 I do not have an opinion on investing I stick to principles which are first, invest in yourself. Do not lose money. Acquire 100k in cash or capital/credit. Then invest in either a banking system, insurance, and real estate.

[@leonflores9461]

velocity banking

[@itsjeppuman]

When say expenses, what do you mean by that? Would that be your gas, electric, food, cable, phone bill, etc.?

[@DenzelNapoleonRodriguez]

anything that leaves your checking acc to pay something is an expense so anything outgoing what is left over is cashflow

[@itsjeppuman]

Thank you for your reply. I signed up and hoping to hear from you soon. I will also donate once I have some extra cash to support you.

[@ingewelch3560]

Stay with basic representations. Don't overdo the info or numbers

[@DenzelNapoleonRodriguez]

This video is like 4+ years old I would say I’ve improved since then

[@gregwilliamrice9090]

As usual a wonderful and I find you relaxing ever more into your God given gift as an inspiring teacher.. Keep up the great work.. We need you Danzel 👍🌟👆

[@mickohodll5438]

Hi Denzel, Thank you for this video! Really helped forward from my last comment. Keep up the good work my man 👍🏼

[@DenzelNapoleonRodriguez]

Mick Hofmans grinding every day

[@brooke9886]

How long between your paycheck deposit into the LOC and the paying of your expenses?

[@DenzelNapoleonRodriguez]

from paycheck to paycheck works best

[@kellymedia99]

This was wicked good! Man it is great that you broke into the rainy day scenario too. Great job!

[@willingiam1647]

Love it as always! Learning so much from you. I also notice you are changing up a lot in your dressing. Please don’t go Wall Street slick on us too much. My college kids relate to you and is working the method and my 10 year old watches and keep me alerted so that is your audience also and I’m so happy you are relatable to so many demographic. Change up sometimes because growth is good but keep the Denzel essence and keep talking to these kids because where I can’t you have. Super Fans. Keep up the awesome work and I will be supporting the channel with one of your packages because you are necessary. Thanks

[@DenzelNapoleonRodriguez]

this is huge thank you so much. Trust me I will not change. I appreciate your support as well on the channel.

[@cortezhustle]

Been binge watching you stuff. Saw you on the Wealth Nation channel. I'd love to get you on my podcast if you're open to it.

[@DenzelNapoleonRodriguez]

Financial Health Mentor I would be more than happy to. We can schedule that out in advance. Send me an email

[@cortezhustle]

@@DenzelNapoleonRodriguez Will do. Thanks a ton.

[@viviangulley3398]

Hi Denzel, I'm in the process of applying for a personal line of credit, and I asked the bank all the questions that you mentioned in your video. They said yes to all the questions and the IR is 13.9. Can you tell me if the daily calculation is the same as simple interest calculation, and is checking line of credit the same as a personal line of credit?

[@DenzelNapoleonRodriguez]

Vivian Gulley CLOC and a PLOC are different

[@DenzelNapoleonRodriguez]

Vivian Gulley simple interest divide 13.9 by 30 days

[@tommygringo3871]

What you think? Focus on Mortgage first or new car? Im thinking mortgage as its a ton more interest payments than the car, which will be paid off by the time the gouse is paid off

[@tetyanacrute106]

Craneo Bones paying off your car loan first gives you more monthly cash flow, which helps to pay your mortgage off faster. When you pay your mortgage it takes longer because it’s a larger amount, and it doesn’t change your cash flow until you paid it off completely. It speeds up the process of paying it off.

[@dmoro67]

I am really trying to wrap my brain around this method, but I just can't seem to get comfortable. The main problem for me is that our monthly cash flow varies significantly from month to month. Does it make sense to determine annual cash flow and divide by 12?

[@bretrmalcolm]

How can I do this without a loc. Only have credit cards which are maxed out.

[@DenzelNapoleonRodriguez]

get your money right. start with the credit cards

[@Bladeballer57]

This whole plan pretty much falls apart when you don’t get your 10% personal loan. If you’re in so much debt that you have to get more debt to pay off, i’m pretty sure your rate will be higher than that, plus you added another monthly payment to your expenses while you’re paying back your debts :/

[@DenzelNapoleonRodriguez]

Juan Perdomo it’s not a personal loan it’s a line of credit the rate is simple daily interest so it is not higher than the loan rate I do not have a monthly payment because it was satisfied by the total income going into the line of credit It’s not about being in a lot of debt it’s about how do you pay off the debt and how fast. It’s also about how much money do you have when your debt free or do you have to start all over again because all your money when towards paying off debt

[@marwin4038]

Denzel, I have 2 CC’s. First one is almost a zero balance w available funds of $4500 and cash back rewards. The other CC has balance of $17K, w available funds of $9000 and reward points. Do I chunk from the zero balance card or the other?

[@jeffhudak1981]

What are the interest rates on both?

[@tammyjones4883]

Denzel, could I use a credit card with 0% as my LOC to start paying off my mortgage early?

[@DenzelNapoleonRodriguez]

Tammy Jones there is a way to do so. There is a few more steps involved it could work. It’s not my favorite debt weapon against a mortgage I rather go for a LOC or HELOC

[@tammyjones4883]

Can you do a video comparing a LOC to a 0% apr credit card?

[@DenzelNapoleonRodriguez]

thats tough I like both. It is a matter of the individual's personal situation. Fill out a form and I can answer that just for you.

[@tammyjones4883]

Can you tell me what are the few extra steps involved in using a credit card with 0% as my LOC? I filled out a form also.

[@jeffhudak1981]

@@tammyjones4883 Let us know what the steps are please?

[@Flores_jw]

Please help me with paying off my mortgage haha... I need some of your wisdom bro

[@DenzelNapoleonRodriguez]

www.patreon.com/DenzelRodriguez take action do not waste any more time visit my page and look at my services I offer when you give

[@mrs.niquannarobinson-garne6870]

Denzel i'm a little lost because after watching your vids, I still don't hear (maybe I missed it) you mention making payments towards the line of credit once you borrow from it! Can you please help?

[@DenzelNapoleonRodriguez]

Mrs. Niquanna Robinson-Garner watch my video called velocity banking the mechanics

[@karenmosley7652]

I simply do not understand WHEN you make the payment on the line of credit??? I looked for the recommended video but I could not find it.

[@alexchan6405]

@@karenmosley7652 through the monthly income, you're transferring your income monthly to the loc, to offset the chunks and payments from loc to the debt

[@joshuagarner1654]

You are going about this all wrong, it's not vb vs debt snowballing. In actuality vb is a form of debt snowballing. You are adding new debt but transferring it to a different vehicle to snowball it down. Because what do you do with the cash flow when a debt is paid off? You snowball it on the next debt. God job and May God bless you.

[@DenzelNapoleonRodriguez]

Joshua Garner I like this perspective I agree with it. Overtime what I learned is that it’s the same method just a lot faster with better features and benefits

[@TruthOrConsequences2]

Joshua Garner I know this can be a little confusing at times but stick with it! The efficiency and flexibility are the key differences to understand here. Remember the three variables in total interest charges are (1) balance (2) interest rate (3) time. These are what determines interest costs. A mortgage sets the time and locks in high interest costs. A line of credit does not. A mortgage can only have money going into it and cannot allow your total income to work against it except as a drain of your cash flow and there's no way out. A line of credit can have money going into and back out of it, it is very flexible (but can be dangerous if you go off budget). Remember Rich dad, poor dad's definition...an asset puts money into your pocket, a liability takes money out of your pocket. Eliminate as many liabilities as you can as fast as you can so you can begin to acquire assets. This is how the rich do it.

[@sureshotprosmusic]

Hey Denzel, are we essentially transforming ALL amortorized Loan Debt (pay me Now) into Simple interest debt (pay me later).

[@DenzelNapoleonRodriguez]

NewAgeIngenuity I like the way you put that the answer is yes except the last past simple interest that also gets paid now if you notice with my all my timelines instead of 20,25,30 year pay off time we are looking at 5-7 or even less in many cases

[@sureshotprosmusic]

I dig it, I'll update my understanding to pay me later and pay off debts faster without loan pressures and interests payments

[@carlosgarate1]

Love the idea but how do you make a payment on your mortgage with a credit card I also learned you cannot make a car payment using a credit card! Please explain if I'm understanding correct

[@rn5825]

Hey Denzel. Just fyi. You take the 712.00 Plus the car note payment so on a 15k let's say that's 250. So total payment will be 912.00. So 16 months. Still faster via velocity but just make sure your adding the snowball correctly.

[@DenzelNapoleonRodriguez]

yeah, I messed up the car pay off period on both sides. Velocity banking would still beat the snowball by a few months. The main point is the cash flow and risk not necessarily how fast we pay the debt. Both ways you pay it off at a reasonable time period

[@rn5825]

Agree just Ramsey followers will jump all over that.

[@DenzelNapoleonRodriguez]

R N yeah it’s ok I’ll get better each and everyday I’m not looking to convert people I attract people that I have already been looking at velocity banking and appreciate the breakdown of many different scenarios

[@joelrflores]

Good comparison!

[@silkyseymour]

Was going to do this for my student loans but they don’t accept payments from credit cards anymore. I assume I’ll have to do a cash advance from the LOC instead.

[@DenzelNapoleonRodriguez]

Don't assume. know what your doing if not get get help or your gonna make a mistake

[@angiepepe7067]

Hi! I am from Mr. Houstons class! It was fun that you came yesterday #6period

[@justinveloz1226]

I think i finally get it lol.. i have 10k in savings for emergency,,, what i love is i dont have to use any of it and i use the banks money to pay my bills. i sent you a form ... I am kinda confused on how to contact you. looking forward for some help! Thank you

[@Bizness1st]

Did he ever contact you?

[@the2minutecomic294]

Denzel, I really don’t know if it is accurate to say you don’t lose your cash flow. Yes you have a line of credit that you can access, but in order to use that cash you have to go back into debt? Isn’t that correct, or is there something I am missing? Obviously you lose the cash in the debt snowball method. I just think you lose it either way. I don’t think that having the ability to get into debt again is the same as still having your cash. I do love your videos, but I just have to put my two cents in. 😁. I hope I don’t appear to be being nitpicky. I am not looking for flaws or anything. I just think that other people might be wondering the same thing and really do think that it is not really factual.

[@DenzelNapoleonRodriguez]

Charles Zweiger I know it can be confusing it’s just a mind shift as to how we see debt. It is either good or bad to the eyes. I look at the debt as leverage to make future investments or purchases and pay very little in interest especially if I’m going to make more than what I pay.

[@pjtugman]

I did it Dave's way took forever and had no money to enjoy life you live to work and than everything goes to pay bill take forever plus this is a small debt lets take a bigger debt and see what work better and faster plus help your credit doing velocity banking Dave's way just way to much work and very hard to do over a long period of time

[@DenzelNapoleonRodriguez]

your next on the big board my friend

[@ercilia2929]

I agree. I was a Dave follower and got some debts paid but it is a negative experience that was affecting my marriage and relationships. People in the ransey Facebook group are so judgemental and zealots when it comes to using CC. It is a very antiquated way that doesn't use modern day tools like credit, LOCs, CC.