Velocity strategy or banking is an excellent option to improve your financial situation. This type of banking allows you to use your money more efficiently and help you reach your financial goals quicker. This form of banking can be an excellent tool for anyone, but it is conducive for those who are self-employed or have irregular income. Now what is velocity banking? Here is an overview of velocity banking and how it can benefit you.
What Is Velocity Banking?
In physics, velocity is the speed of an object in motion. But what is velocity banking in the financial world? In the financial world, velocity banking is a way to earn interest on your money while it’s still in your account. Instead of saving up enough money to earn interest, you can earn interest on the money you already have. It is a great way to grow your money without having to put any extra effort into it.
Why Is It Somewhat Flawed?
There are some drawbacks to this format of banking. First, qualifying for a line of credit or loan can be challenging. And second, if you’re not careful, you could end up with even more debt than you started with. The concept leverages debt to pay debt. Many times this process is also familiar as infinite banking. At the end of a term, a loan remains to be a loan with interest. So dealing with such a banking process carries some errors, such as increasing overall debt.
What Is The Calculator?
The velocity banking calculator is a simple, easy-to-use tool that can help you determine how much cash you need to save every month to reach your financial goals. By inputting your monthly income and expenses, you can see how much you need to keep each month from getting to your destination in a specific time frame. This tool can also help you create a budget and track your progress over time.
Is it Effective?
Velocity banking can be very effective if done correctly. One fundamental way to ensure you are doing it correctly is to make sure your investments are diversified. Diversification is vital because it helps to mitigate risk. When you have all your eggs in one basket, you risk losing everything at once.
This system is a way to access the cash value of your home equity without having to sell your home. It is an alternative to traditional banking methods, such as getting a loan or using a credit card. To use this form of banking, you must have equity in your home. The amount of equity you have will determine how much cash you can access. This banking is an effective way to get cash when you need it without going through a bank or other financial institution.
Final Verdict
Velocity banking is a great way to earn more points, miles, or cash back on your credit card. Using your credit card to pay bills and purchases can earn more points, miles, or money back.
