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BetterWealth with Caleb Guilliams
Should You Use Infinite Banking or Velocity Banking? Pros & Cons Explained
Feb 16, 2024
In this podcast, Denzel Rodriguez, an expert in velocity banking and infinite banking, discusses the pros and cons of using these strategies. They explore the concepts of velocity banking and its connection to infinite banking. They also discuss potential risks associated with velocity banking, as well as the benefits and drawbacks of both strategies. Additionally, they emphasize the importance of understanding individual circumstances and taking control of your finances.
36:34
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Quick takeaways
- Velocity banking is a strategy that allows individuals to reduce interest costs and create more cash flow by using a first lean HELOC instead of a mortgage, but it may not be suitable for everyone and should be evaluated based on individual circumstances.
- Positive arbitrage in infinite banking, which involves earning more in dividends than what is paid in loan interest, may not be achievable for the majority of people and infinite banking should not be seen as a guaranteed wealth-building strategy; faith and purpose are important components in making sound financial decisions.
Deep dives
Velocity banking and efficiency in paying off mortgages
Velocity banking is a strategy where a person gets a first lean HELOC instead of a 30-year mortgage and uses it as a bank, making extra payments to pay off the debt faster. This allows for greater control and use of money, potentially saving on interest. However, it may not be the best strategy for everyone and should be carefully evaluated based on individual circumstances.
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