Denzel Rodriguez Interview

On this week’s episode of OEL the ladies interview Denzel Rodriguez, also known as “The Finance Geek”. Denzel is an expert on Velocity Banking and today he’ll discuss how to use velocity banking to pay off loans, build wealth and even start businesses. He explains the best ways to pay off debts and how to increase cash flow.

Denzel Rodriguez, is a financial expert whose YouTube channel has thousands of subscribers and millions of views thanks to his insights on velocity banking and financial repair. Denzel is a 23-year-old entrepreneur born and raised in Queens, New York by a single mother. From a young age, he felt compelled to learn about finances. While doing research on how to manage his family’s finances, Denzel discovered a method that he could use to become debt free, build credit and also increase his cash flow. After sharing this method with his mother, her finances began to improve and from then he decided to help others manage their finances based on what he’d learned. Currently, he is helping families across the United States and abroad manage their finances by using Velocity Banking, Infinite Banking, and Kingdom Authority in their household. Denzel credits his success and wisdom to God.

What Is Velocity Banking and Who Is It For

Velocity banking is the concept of transferring your (paycheck) income into a credit card account or HELOC (Home Equity Line of Credit) and pay down your debt. Velocity banking is a great concept to pay off debt quickly. To get started using velocity banking, you would need to have good credit to apply for a HELOC or a credit card with a significant credit limit, a positive cash flow and discipline to pay back borrowed money. To begin, you would use a maximum of 66% of your line of credit and pay off or pay down another debt that is an amortized loan as opposed to a line of credit.

• Positive Cash Flow: Income or money left over at the end of the month after your bills and expenses have been paid.

• Line of Credit: A debt that doesn’t make you responsible for the interest on the full amount. This type of debt functions as a checking account that you can withdraw from. You only accrue interest on the amount you owe. If you pay back the amount you owe before the account has had time to accrue interest, you can avoid paying interest altogether. Lines of credit consists of credit cards or a HELOC (Home Equity Line of Credit).

• Amortized Loan: A debt that uses “front-loaded” interest, meaning, you are responsible for the interest of the full loan from the beginning, regardless of how much you need or use i.e. Mortgage, student loan, car loan, and nearly anything that has a loan attached to it.

This method focuses on using less damaging debt (simple Interest credit lines) to pay off a high-interest debt (Amortize loans) without adding to the length of your loan period. Once you’ve made a lump sum payment to the amortized loan(s), you would then deposit your entire paycheck into the line of credit or credit card account and get rid of that monthly payment. You would then continue to use the line of credit as a checking account for your regular bills and expenses. Any leftover monies (cash flow) after you’ve paid your bills and expenses will count towards the repayment of the credit card. This method help’s you eliminate years’ worth of payments on the amortized loan(s), saving yourself large sums in interest payments.

What Happens to Your Existing Credit Card Payments When You Use This Method

You would continue to make your minimum payment combined with the bills you’re scheduled to pay and apply it to your balance. You’ll end up paying down the balance faster than if you were just making one large payment. You’ll lower the amount of interest you accrue while developing a consistent payment history. You’ll only be charged interest only on the statement balance.

How Can You Increase Your Credit Score Using Velocity Banking

You would only withdraw the amount needed to cover your current month’s bills and expenses.  Throughout the month, you’ll essentially be making multiple monthly payments. Your credit score fluctuates when using velocity banking. Creditors see you consistently paying down your balances and your credit score will increase, the bank now see you as credit worthy. Each time you withdraw money from your line of credit and deposit your paycheck, it’s reflected positively on your credit report. The more you use velocity banking the more your score will increase.

What Are Some Ways to Build Wealth with Velocity Banking

One of the great things about using velocity banking is that it continues to benefit you even after you’ve paid down your debts or paid them off completely. Once you have paid your other debts and increased your cash flow, you’re now ready to pay off that line of credit and create a separate savings account using your own money also known as Infinite Banking. Denzel refers to this as Phase 2 of velocity banking. You would build your savings to the point where you have a considerable amount to withdraw from, then use those savings to accrue interest for yourself, make investments, and make your money work for you!

What Happens When Lenders Do Not Accept Credit Cards as a Form of Payment

Finding ways to work around this is not a huge challenge, it’s up to the consumer to do the research prior to using velocity banking to ensure it’s the best route to go. One way around this is to calculate and split your bills. Pay only expenses that can be paid on a credit card, food, gas, utilities, etc. Loans that cannot be paid with a credit card can be paid through a company called Plastiq. Plastiq allows you to pay loans using a credit card; the downside is the 2.5% interest you’ll be charged for using the service. Square Up is another company that allows you to pay loans using credit card, they charge 2.6% interest, but you are essentially paying yourself.

What is Chunking

Chunking means the total amount of money you are using or borrowing from the Line of credit to pay another debt. Calculating your “chunk” is based on a few things: current cash flow, income, debt amount, and the monthly payments you are already making towards a debt(s) you have. For beginners, it’s important to know your numbers, acquire a line of credit, and know your chunk amount.

What Are Some Disqualifications to Someone Doing Velocity Banking

The biggest disqualifiers are low credit scores and a lack of cash flow. In order for someone to qualify for a HELOC, their credit score must be in good standing. Some individuals have a tough time building credit, or are unsure of how to recover from previous shortfalls. If your credit score is 600 or lower, you’re unlikely to be approved for a significant line of credit. Additionally, if you have negative cash flow (spend more than you make), or are right at zero each paycheck (spend exactly as much as you make), or have less than $500 available each month, than velocity banking may not work for you.

5 Takeaways about Velocity Banking

• Velocity banking is the concept of transferring your income into a credit card account or HELOC (Home Equity Line of Credit) and pay down your debt.

• The biggest dis-qualifiers for being able to rely on velocity banking are low credit scores and a lack of cash flow.

• Velocity banking works best for those with good credit score and positive cash flow.

• Chunking means the total amount of money you’re borrowing from the line of credit to pay another debt.

• Once you’ve paid down your debts and increased your cash flow, you’re now ready to pay off that line of credit and use a separate savings account using your own money

Resources

Denzel has several tutorials on velocity banking available on his YouTube channel and additional information can be found on his website:

• https://denzelrodriguez.com/

• Denzel Rodriguez Youtube Channel

• Sign up for Denzel’s Velocity Banking Master Class Here

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