Many wealthy people use lines of credit and do not use cash. They use cashflow as velocity and leverage as currency.  Rising inflation has caused the buying power of the dollar to be devalued: cash is dead and cash flow is king.

Velocity Banking: Ultimate debt reduction strategy. Velocity banking is a debt tool that contradicts everything we have been taught about banking.

Velocity banking is used to maximize cash flow and to have leverage.

Typical consumer debt loans are not liquid. Banks usually get all of the leverage and they use other people’s money (OPM) to grow and profit. The banking industry was set up to generally only benefit the bank and not the everyday average person.

If you are living paycheck -to-paycheck and sometimes struggle financially, then the Velocity Banking Strategy could be a good debt tool to use. Velocity Banking allows one to leverage the bank’s money to pay off debt without the need to necessarily increase your income.

Flip it and use OPM to benefit you like the banks do.

Velocity Banking allows a continuous revolving cash flow that is liquid with simple interest. This debt tool is contrary to the average consumer loan debt that is front-loaded and amortized.

With Velocity Banking allows you to use the tools you may already have.

Home equity line of credit, personal line of credit, and even some credit cards can be utilized as a debt tool in velocity banking (open-ended).

Velocity banking allows one to accelerate and leverage cash flow, provided that the correct steps are applied.

You can pay off debt with simple interest and also make “chunk” payments to pay off your mortgage faster.

It is recommended to use this strategy to pay off debt and to maximize cash flow. You can also use this to buy assets that will compound and grow your wealth. It is not recommended to use this strategy to buy liabilities…… Especially meaningless goods (high end clothes, Gucci belts, Nike shoes, etc.).

After you reduce bad consumer amortized debt and maximize cash flow then you may also use the Velocity Banking Strategy to grow your wealth and invest in assets (real estate, stock market for long term, business endeavors). Of course, do your homework and research profitable assets that you are interested in. Educate yourself and invest in yourself.

Velocity Banking Strategy:

1. Get a revolving, open-ended line of credit (HELOC or PLOC)

2. Deposit entire income into HELOC or PLOC

3. Pay all expenses via HELOC or PLOC

4. Rinse & Repeat

5. This method allows the debt principle to be paid down in a relatively short time period

6. This creates liquid revolving cash flow w/ leverage

Note: The Velocity Banking Strategy can also be used with credit cards. The same concept of using your line of credit as your own little bank applies.  This is also effective as long as the credit card is revolving and open-ended and your income is deposited on a regular basis.

Disclaimer: The Velocity Banking Strategy is for individuals who consistently follow the recommended strategy of depositing their income into their line of credit or credit card. The Velocity only works as a continuous cashflow as long as it is fed with income. Having a plan before, during, and after Velocity Banking is highly recommended.