All Forum Posts by: Account Closed

is co conspirator 1  Morris  sounds like it .. Looks like they just picked these two investors to get the ball rolling.

 The flaw in velocity banking is how guru present it on the internet. David, you were part of a long discussion thread where you posted a Youtube video from a guru who used trickery to claim something that just wasn't true. The claim was that you "skip" interest payments. The guru claimed that mortgages are front end loaded with interest. This claim is false. Mortgages are evenly loaded with interest based on the principal owed. Payments are fixed, so if you pay down principal, you pay the loan off sooner. 

The guru in the video claimed that paying principal allows you to "skip" interest payments. Lets say for example in the first six months of your loan, the payment is split so that $100 goes to principal and approximately $600 goes to interest. The guru claimed if you paid and extra $600 that you "skip" six months worth of principal and interest, thereby saving $3600 in this example. That is completely false. You never skip interest, you just reduce principal by $600 so you pay less interest. Lets say your rate is 4%. That is $24 per year saved or $2 per month, so you pay $598 interest instead of $600. The guru use trickery and false math that the average person misses.

True velocity banking is really no different than any other method of making extra principal payments. No magic or special system. Interest is calculated on balance owed, so you reduce balance owed and you pay the loan off faster. All the velocity banking does is gives you a second loan to pay down, so instead of having money in savings, you have a negative balance checking account. It is like operating your bank account in overdraft mode all the time. There is some savings over just making extra principal payments but it is very little. Not months or years and not thousands of dollars. 

Is is the extra principal payments, not velocity banking that matters.

Of course the guru just happen to be selling these velocity banking services...

Originally posted by @Account Closed:

Guess who's next!

https://twitter.com/MattGoldstein26/status/1197836095733547008?s=20

Who is Matt Goldstein? I tried doing a search on this news and didn't come up with anything. 

I just randomly clicked on this thread and I'm wondering if all 59 pages are just like this one? 🤐

@Victor S.

Sorry man, i didnt read your comment correctly the first time. You said:

"This "velocity" method works, but it's not any better than simply applying additional pmts to your principal."

This in itself proves that the method does not work!

If it does the same thing as simply paying extra, what the hell is the point of introducing a LOC into the mix and complicating the crap out of your damn life?

The whole idea of "Velocity banking" is to pay same amount in extra payments as you normally would, but instead of paying directly to the MTG, you channel through HELOC, and by doing that, you supposedly pay the loan down quicker than you would without the HELOC. (This doesnt work by the way)

I just barely opened the spreadsheet you linked, and assuming its coded properly - it shows that LOC method actually SAVES YOU LESS ($77,857 vs $77.813)

So, i go back to my original statement:

I still have not seen any math that proves me wrong. I got excited when i saw the spreadsheet because i though i have something to dismantle, but it just proves me right.....

Yea, so the idea is that you take advantage of HELOC's daily balance calculation and leverage your personal expenses such as cars, food, utilities etc etc. You make one lump sum payments out of your HELOC into your MTG principal, then throw your entire paycheck at the HELOC to bring the interest down. As your expenses come through, you pay them out of HELOC (ex: Vehicle payment on the 15th - 15 days of interest saved. Utilities on the 24th - 24 days of interest saved. etc etc)

I  have tried talking to a few people who claim this works. Nobody was able to provide the math.

So.... i figured i'd ask in this thread since its Morris related.

You don't happen to have any copies of those videos do you?