You may know me from my YouTube Channel Denzel Napoleon Rodriguez, and I'm The Finance Geek. I'm here to introduce you to the method called Velocity Banking!
In the past you may have heard about Velocity Banking in the same sentence as "it's complicated" and even "is it a scam?" This is NOT true, and for many people, Velocity Banking is the first step in a long line of lifestyle changes, but what exactly is Velocity Banking and how does it work?
Velocity Banking is defined as the use of financial and banking products that manage and increase cash flow, to quickly create financial security by eliminating, reducing, or minimizing interest. Velocity banking is a more efficient way to use your current income.
The first thing I tell anyone who is thinking about starting Velocity Banking is to know your 4 Major Numbers: These numbers are Income, Expenses, Debt, and Cash Flow.
Knowing your Income and Expenses is pretty straightforward, what do you get paid and how much are your bills....
Since so much of Velocity Banking centers around the Line of Credit and Cash Flow, I thought we could talk about the 3 different types of lines of credit there are. As a refresher, a line of credit is an arrangement between a financial institution—usually a bank—and a customer that establishes the maximum loan amount the customer can borrow. Read more about lines of credit here or click on the video below to be linked to my YouTube Playlist all about lines of credit.
Types of Credit Lines
There are 3 types of credit lines – home equity, personal, and business. Business lines of credit work similarly to credit cards. The LOC comes with a credit limit, and borrowers make payments every month with interest based off of the amount they borrowed during that period. Your financial institution will most likely have more strict requirements for lines of credit than for business loans. If you think taking out a business line of credit is right for you to be sure to bring...
What does it mean?
How does it work?
How can it change my life?
Borrowing is a temporary possession of money with the intent to repay the amount borrowed. In a financial sense, if you borrow money, you assume a debt to the lender, this debt contains the principal amount plus interest.
Time to break that definition down. We have two parties when we talk about borrowing - we have the person who needs money (borrower) and the person who has money (lender). When a borrower asks for money and is approved for an amount they sign a contract that states how much time they have to pay the lender back, but they have to pay the original amount they borrowed plus interest back to the lender.
there are two major ways lenders calculate interest simple interest and amortize interest - you can read more about the differences here.