The Risks of Renegotiating a Zero Interest Credit Card

https://www.youtube.com/watch?v=Nd1Q31lCczw Are you a wealth creator with a need to have access to cash in the safest way that puts you in control?  Velocity Banking shows up again and again as a solution to pay off your home faster and save interest.  It even appears as the ideal way to store up equity in your house to use for investing.  And, to add confusion, it sounds a lot like Infinite Banking, with a similar objective of taking the banking function into your own hands, so you achieve independence from the bank profiting on your money and requiring their permission for you to use it.  To further muddy the waters, Nelson Nash’s book, Becoming Your Own Banker, is often cited as the foundation for both strategies.  (However, Nelson wrote the book as the foundation for the Infinite Banking Concept, which he promoted through the Nelson Nash Institute.) But what is the Velocity Banking strategy, and what are the risks?  How does it compare to Infinite Banking?  And which approach gives you more control? This episode is for every wealth creator who wants to have access to cash in the safest way that puts you in control, so you’ll never get caught in a cash crunch. Today, we’ll reveal the three reasons Velocity Banking is a poor alternative to Infinite Banking for building investible capital. Velocity Banking doesn’t provide safety Velocity Banking doesn’t guarantee access to your cash Velocity Banking doesn’t give you a rate of return Table of contentsWhere The Infinite Banking Concept Fits into Your Cash Flow SystemFirst, What Is Infinite Banking?And What Is Velocity Banking?Velocity Banking vs Infinite Banking: The Single Clarifying Question You NeedSTOP.  Before you read further, you have to know this:Here’s Your Quick Glance Comparison Between Velocity Banking and Infinite BankingThe Underlying Assumptions of Velocity BankingFinancial Principles and Truths That Put You in ControlLiability ≠ DebtDebt Payoff Should Be StrategicSaving Interest ≠ ControlHome Equity ≠ SavingsVelocity Banking Doesn’t Provide SafetyVelocity Banking Doesn’t Guarantee Access to Your CashYou Can Only Access Equity During the Draw PeriodThe Bank Can Freeze or Reduce Your Credit LineInfinite Banking Gives the First Right of Access to PolicyholdersVelocity Banking Doesn’t Give You A Rate of ReturnInfinite Banking Allows You to Earn A Returns on the Same Money In 2 Places at the Same TimeHow Infinite Banking Puts You in ControlFind Out More Where The Infinite Banking Concept Fits into Your Cash Flow System The Infinite Banking Concept (also known as Privatized Banking) is just one step in the greater Cash Flow System. It’s the peanut butter to your cash flow sandwich. While it’s nestled into Stage 2, Protection, it also improves everything else around it.  Infinite Banking helps you keep more of the money you make in Stage 1, amplify your cash-flowing asset strategy in Stage 3, and accelerate your Time and Money Freedom. First, What Is Infinite Banking? Infinite Banking is a strategy of using a specially designed, dividend-paying, high cash value whole life insurance policy with a mutual company as a place to store cash.  As you build up cash value, you have access to use it through withdrawals or policy loans. The result of Infinite Banking is that your cash flow, or surplus, goes into a life insurance policy, where it is stored in cash value. Here’s how you can find out more about Infinite Banking, the kind of life insurance policy that works for this strategy, and how to get high cash value and long-term growth. And What Is Velocity Banking? In short, Velocity Banking is a strategy of using a line of credit to pay off your house faster, while saving interest. The strategy includes variations such as opening a 0% interest credit card and moving balances of debt from other liabilities to the credit card and then paying off the credit card fast, using a home equity line of credit (HELOC) or even replacing your mortgage with a 1st lien HELOC.  Depending on how you use this strategy, proponents demonstrate how you can fully pay off your home quickly, usually between 5 – 10 years. However, the debt reduction isn't simply a result of the HELOC product itself. Instead, the results are achieved by the strategy of cash flow management you use with it.  For the fastest debt payoff with Velocity Banking, you would use the line of credit as your bank account, putting all your money in each month and paying your bills out of the line of credit.  The difference between your income and expenses each month results in an extra payment to the line of credit that decreases the balance owed and increases your equity.  Then presumably, you can use the HELOC as a checking account to pull out equity any time you need cash or investment capital. The result of Velocity Banking is that your cash flow is directed into home equity, where it is stored. Velocity Banking vs Infinite Banking: The Single Clarifying Question You Need This article compares the eventual outcomes of the two cash flow management strategies of Velocity Banking and Infinite Banking.  This is the bottom-line question: Which is the better place to store cash? If I had to choose just one of these strategies, I’d pick Infinite Banking, because of the guarantees, certainty, and control I gain, that Velocity Banking just can’t provide. STOP.  Before you read further, you have to know this: We are not anti-HELOC.  Securing a HELOC might be a prudent financial move to provide additional options when you need access to funds or want to put lazy money to work.  For instance, you can use the home equity of your primary residence to purchase cash-flowing investment properties.  We’ve even helped people use their equity to buy investment property. We call high cash value life insurance the “AND Asset” for a reason.  Infinite Banking isn’t meant to be your only financial strategy in your toolbelt.  It’s intended to complement and accentuate your investing strategy, boosting returns and accelerating your cash flow.  Infinite Banking is like a golden key that unlocks and enhances every other area of your financial life. Here’s Your Quick Glance Comparison Between Velocity Banking and Infinite Banking Now, when I say that Velocity Banking is a poor alternative to Infinite Banking, here’s what I mean: The Underlying Assumptions of Velocity Banking The mainstream financial thinking makes sweeping assumptions about what’s right and wrong for everyone to do with their money.  Their power is that they sound like practical common sense.  But the problem with conventional thinking is that it achieves typical results.  If you want to build uncommon wealth, you need to elevate your thinking. Here are the underlying assumptions of Velocity Banking: If you have a liability, you are in debt. You should pay off all debt first before working on any other financial goals. You should pay off debt as fast as possible to save interest. Equity in your house is savings, and a HELOC is the best way to tap into that equity. But, if you follow this logic, Velocity Banking’s assumptions are a landmine that robs you of control.  We’ll quickly zip through the first three assumptions because we have volumes of content on these foundational topics.  Then, we’ll dig into the last assumption because that’s where you discover the crux of the question: which strategy results in the best place to store cash? Financial Principles and Truths That Put You in Control Instead of accepting the common assumptions of Velocity Banking, let’s find the bedrock financial truths that will put you in control and help you to prosper. Liability ≠ Debt With Velocity Banking, the goal is to outrun “debt” as something bad that you feel guilty of having in the first place.  This view altogether misses the real definition of debt. DEBT = Negative Equity Stated another way, you are in debt when your liabilities exceed your assets. The typical approach has you needlessly trying to become "liability free." Instead, you should evaluate each liability individually to determine whether to keep it or pay it off. Just because you have a liability doesn’t mean you’re in debt.  And it follows that just because you have a liability doesn’t mean you should pay it off. Debt Payoff Should Be Strategic You should attack your debt strategically, not with a battering ram. That's because not all debts are equal. Some debts are more efficient than others, and it can actually slow you down to focus on paying them off. Other debts require immediate attention and should be paid off as soon as possible. You'll want to pay off the liabilities that free up the most cash flow and keep the most efficient liabilities.  Find out how to do this with the Cash Flow Index. You need personalized tactics because your strategy depends on where you're starting from. If your big-picture objective is time and money freedom, you want to focus on creating as much cash flow now, having healthy savings, and acquiring cash-flowing assets. That's why you should prioritize savings, even above paying off most, if not, all liabilities, depending on your specific situation. If you try to climb out of a hole you aren’t in, you’ll never realize that starting now to build assets is possible, safer, and puts you in the most control, even with an outstanding liability.  That's because when you have cash you control (asset), you’re in a much safer position than if you have no liabilities.  If something goes wrong, you have money that you can tap into and access for any reason. Saving Interest ≠ Control If you focus on interest, you won’t notice when your interest-saving strategy robs your control right out from under your nose.  To be fair,