How This Mom Can Pay Off Debt Fast & Build Wealth With This Strategy

Hello and welcome to my channel. My name is Denzel Rodriguez, your personal finance geek of the 21st century. And in today's video I have a lovely case study for you. We're going to be looking at an individual and their personal finances, how we're going to structure getting out of debt using debt elimination strategies, specifically velocity banking and debt snowball. We're going to be looking at retirement, how to invest, where to invest, what products, what vehicles we could potentially use. So these are ideas that I am actually working with the client currently in to figure out what's the best move for them according to their goals, their desires, their wants, their needs and what will be most efficient for them. So with that being said, let's dive right, right into the material today. Four major numbers. On the left hand side we have an individual in the career of dentistry. So they're a dentist, they generate 19,500amonth, expenses are $16,512.08. Total debt is 447,869 bucks with a cash flow of around $2,987.92. So dealing with a 50 year old female that has been a dentist for many years. So that's the career that they've built in. They enjoy the work that they do. The current position, financial position that they're right now they got about 80 grand or more of cash on hand in a high yield savings account. We're using SoFi where they offer 3.8% on that money. We have a total of 950,000 of death benefit across multiple different policies. We have about 20,000 or more in stocks and then I just put roughly earning about maybe 6 to 8%. We're in the state of Florida, we do not have a line of credit yet at the moment. So in terms of velocity banking, we're not incorporating velocity banking yet because we don't have a debt tool yet. We're looking, we're searching. So this is going to use an example of a bank in Florida called Space Coast Credit Union where they're offering right now a 4.24% intro rate for 12 months on their interest only, actually on their principal and interest only payment option. On their second position HELOCs they have two different options. One is a 10 year interest only and I believe the other one is a seven year draw period principal and interest payments and it is 70% LTV. After the intro rate it goes to a prime minus 0.5%. So it could be, it could be as low as 7% once the intra rate is complete. So with the current debts that they have, everything is higher than 4.24%. So this is a very simple, easy velocity banking strategy where we can just incorporate a tool that's at a cheaper cost, no money to get in, and you can immediately consolidate that increased cash flow immediately and go faster than the traditional ways of getting out of debt by just making extra payments. So we're going to use Space Coast Credit Union, this example here. We may end up with a different bank. So again, just an example, not real at the moment. Here are some goals that this person has. First and foremost, they want to be debt free. That is a personal goal of theirs. They want to live debt free. They want to operate debt free. They don't want to have to use debt. They want to be in a position where they get to use it and understand how to use it. Master, which is where I come in and help them. Teach them how to become masters over debt and leverage debt to their advantage to create wealth, create cash flow and have additional capital that they can deploy whenever they want. They want to invest in real estate. They have one property as of right now, that's their primary residence. They would like to have a laundromat as a business. Right. They'd like to invest in that and generate cash flow for them. And a dental practice. They would like to continue the work that they do and instead of being an employee, they can transition to business operations side of things and still do some work but not be in a position where they have to. So again, we're currently 50 years old, married, kids, whole nine and they have a projection of anywhere between 65 to 67 year old that they would at that point they would like to be in a position where they're completely debt free, maybe owning a dental practice or laundromat, maybe have a property or two and have enough income coming in where they do not have to work. Be in a position where they choose. They want to continue to work but not have to put in 40, 50 plus hours. Whatever they're doing right now, you want to be able to cut that down and go to a more customized schedule. So that's really unique. Not a whole lot of people want that. I would say a lot of people I speak to want to simply be done with their job or career and transition into something else because they either don't like it or that's not what their purpose is. So it's really helpful. When you're in a position where you're in the career, you're in the thing that you love to do, that you want to do, then it's just a matter of figuring out how do you continue to do that in retirement in those senior years when your body just isn't able to perform like it once could. And just keeping that in mind, having that awareness like, you know, I'm not going to be able to run the same way I can run today, jump today, you know, all these different things. So you want to keep that in mind. So with that being said on in the middle of the whiteboard, here is showing what velocity banking could potentially look like in the first year of incorporating the strategy with that intra rate and the first couple of moves that I would make if I was in their shoes. And then on the right hand side is incorporating an investing, savings and retirement strategy to build vehicles to supplement that income. We want to try and replace as much of our active income as we can. But more importantly, what we really want to solve for is making sure that our lifestyle expenses are fully covered by guaranteed and passive income that we don't have to actively work for. And then whatever active income you do produce, that's gravy, that's abundance living. Okay, so of this447 debt, majority of that is in a mortgage. And we have two car loans, one for 11,826, another one for 13,217, 5.99, 5.9 is the interest rate, 578,400 bucks are the monthly payments. If I was in this person's shoes and I acquired a home equity line of credit for around 100,000, 125,000 or more, I'd say minimum between 100, 125. I would feel comfortable making my first chunk payment, which is a, what we're doing is a withdrawal that you would then allocate those dollars to debt elimination. You still have the same amount of debt. Just to be clear, we didn't borrow more debt to pay off existing debt. That's not what we did. We gained access to equity in an asset that we had and we're going to shift pre existing debt into another location and reduce that interest cost. So a lot of people think that when, or I should say, like the critics of velocity banking are saying that you're going into more debt to pay off debt that's inaccurate. You can make the argument that you now have more debt on your, or I should say you have more debt access on your balance sheet. You can make that argument where it's like, yeah, if I had three or four credit cards here. I got two car loans, I have a mortgage. And then if I add a heloc, that doesn't mean I'm in more debt now. That just means I have more access to debt. Doesn't mean I'm in more debt. Because if you gain access to a home equity line of credit or a new credit card or a personal line of credit, you're only in debt when you what? When you use it. So if this person got a home equity line of credit for 125k and never used it, did they go into more debt? No, absolutely not. And if. Now the second part to that is, well, if I got a $125,000 home equity line of credit and I used that equity debt to pay off pre existing debt, did I go higher in debt or did I go lower in debt? You stayed the same. You just simply moved it from one place to another. On my credit report, it'll say that's done and that's done. That got paid off. But then a new credit report will show there's debt over here of the same amount. The only thing that's different is the amount of interest tied to those debts. And that's what velocity banking is primarily trying to solve for trying to help you and your finances, which is how do we reduce the average daily interest that you're paying on your debts? You may not view it that way because you're used to just making payments, right? You make payments and then you see the interest. But what's actually happening is every day you're in debt in your life, every single day, you're paying interest every single day. What velocity banking shines a huge light on is saying, hey, Mr. Mrs. Client, hey Mr. Mrs. YouTube follower, subscriber, loyal to this channel and others, by the way. Your average daily interest costs is $100 every single day. You're paying $100 every single day in interest. And with velocity banking, we could cut that in half. How does that sound? We can mathematically show it. It's not that hard. So is it going to work every single time? No, absolutely not. So as you're beginning to learn more and more about velocity banking, understand that it's not a one size fit all. It, it doesn't work for every single situation, every single circumstance, but when it does, turn the switch on, get in the room, find what you need, get the materials, leave the room once you're done. So I view velocity banking like a light switch in a room. Turn it on when I'M in the room when I leave the room, what, turn the switch, turn the lights off. Don't leave it running because it could cost you money. So have that awareness when doing Velocity banking again, this is just showing like the first year. So at 4.24% I move 5.99, 5.9. And then their primary mortgage is at a 7.38%. And we're only a little over a year into the home. Right. They acquired the home back in November of 2023. Now it's April as I'm recording this video of 2025. So by the time this thing posts, maybe it's, you know, May or June. And so there's, you know, 7.38 versus 4.24. I showed making a $17,000 principal payment to the mortgage balance is what I illustrated for a total chunk of $42,043 immediately. What happens in that month? Once I pay the cars off, I no longer have that payment. So where do those payments go? They go into the line of credit. So now those payments are going to help 100% principal, help pay down the line of credit, which is now at 4.24%. And when you're doing velocity banking, you don't actually pay 4.24% in a whole year. What do I mean by that? If we owe $42,043, you times that by 4.24%. The total maximum amount of interest that I can pay in a year is 1,782 62 cents. I can't pay more than that unless I what owe more than 42 grand. Understand that. So what Velocity bank is going to do is not only take that 4.24 percentage rate and we're going to reduce the total interest percentage that we pay in a year doing Velocity bank. And in many cases we can cut that number in half, end up paying a total percentage interest of maybe 2 or 3% as opposed to staying at 4.24. You're still getting charged 4.24% daily. Right. The way they do it is 4.24 divided by 365. So you're getting daily, you're getting charged daily, 0.01% daily. And that compounds. So that doesn't change the formula of how they charge interest, doesn't change. What we're changing is how much we get charged based on what we owe. And so when you're fighting against time with velocity banking, you're only getting charged interest on what you owe on the day you owed it, that's it. So the goal is every single day, every single month, we're owing less than the previous month. So that means I pay less and less interest. What this shows is what, where the balance would be. I didn't even include interest costs because what I'll just do is just take this number. I'm just going to add it as like a buffer to leave room for error. So I basically say okay, 42,043, add 17, 82, 62 on it. Do velocity banking, see how long it takes you. So I estimated that by say March, February, around that time frame of 2026 that this line of credit would have hit zero. And just keep in mind that when you're doing velocity banking, you don't have to wait till you pay off your first chunk before you make your next, ideally your first indication when you want to make your next chunk. There's a few factors to keep in mind, right? Just depends. But generally speaking, when your balance owed is equal to your monthly income, that's a first indication that you're getting close to evaluating when you should make your next chunk. So that would have occurred somewhere around September, October of 2025 to make that next chunk towards something in this case, what I'm going to be showing. And I'm going to break this video up into sections, into a little series so that it's a little bit easier to capture all this information, everything that's happening on one end in this video. I'm spending a lot of time focusing on the velocity banking strategy, our debt tool. Money in, money out, what we did initially, we're going to pay off two debts and send 17,000 to the principal balance of their, of their mortgage that is at 7.38%. So that's interest savings no matter which way you look at it. And then I'm simply showing how we're going to pay this off by February, March of 2026. Let's say you just did that, you just paid it off. While that's happening, we're going to put that to the side. We're going to take a look at the right hand side of the board here. These are some statements, some factors that we're going to use to improve some of the dollars that are over here, that we can improve the performance of it long term. So what I am showing what this client could do is using a properly structured whole life insurance contract with a privately mutually held company that has paid dividends for 100 plus years, that has strong guarantees, strong performance, strong actual historical performance. And I'm going to show how they can preserve save 20,000 a year tax free. So that's the number I came up with. Then I'm showing Roth ira. Not just any Roth ira. I'm going to encourage a self direct option because of what they want to do long term. They want to buy a laundromat, they want to buy real estate. So I like the idea of staying in control of my money short term. And long term you can do that with a self directed Roth Ira. Since they're 50 years old, they can make makeup contributions an extra thousand dollars. So for a total of 8,000. And then I'm showing how they can use a health savings account and make contributions of $4,300. So I'm showing 4,300, 8,020K. And this breaks down where I'm pulling that money from. So for the 20,000 in the next video I'm going to show the policy design and everything. So I'm going to show saving using savings that we already have 80 grand. And I'm going to show slowly moving that money over into a whole life insurance contract for the first four years while simultaneously paying off debt simultaneously. So we're going to take 80k, split it up over four years. That means I don't have to bother my current monthly cash flow to fund that asset. I'm gonna take that 80 grand, put it in a whole life. I'm gonna get additional benefits that a high yield savings does not provide. And I'm gonna get better long term performance inside of that whole life insurance contract. And that money's going to grow on a guaranteed basis plus dividends. And that money's going to grow tax deferred and can be used tax free. There's a lot of ands with that particular asset. So very excited for her on that part. Then I'm going to show taking 12,300 from stock, taking it out of risk because it doesn't align with their investor DNA, it doesn't align with their goals, what they actually want to do with their money. So I'm going to show how they can get their money to line up with their values and beliefs, not their values and beliefs line up with their money because that's the wrong way to go. You want your money to line up with your values and beliefs so that your money doesn't influence your values and beliefs, your values and beliefs influences your money. That's key. So I'm going to show in the first year only taking 12, three from there to max fund three, a Roth IRA and an HSA. The beauty of doing that is that money is now going to grow tax free. So we're removing tax liability in the future by having these accounts that she otherwise would not have had. Then I'm going to show, starting in March 2026, taking three months. So after I pay off the first chunk of the heloc, I'm going to take a break with the velocity banking and we're going to look at their cash flow and we're going to see that their cash flow is almost 4k because we, we went from 29 and then add 978 to that. So you're almost at 4,000, which is going to take three months out of the year until year four. And we're just simply going to max fund the Roth IRA and the hsa. So this is me just showing where money is being directed to and how it's going to be able to grow more efficiently to solve for purchasing real estate, purchasing a laundromat, acquiring a dental practice. Then with velocity banking on the primary, we're going to be doing velocity banking on their mortgage because outside of that, they have no other debt. No credit card debt, no student loan, no nothing, just their mortgage. Now, there's going to be some variables that kick in to this strategy that may throw us off, but we're going to be prepared for that, which is the husband will acquire some student loans in the near future and they have a daughter that's going into college that they're funding through a college savings plan as part of their expenses. We have college savings being funded. So if there's anything short that might, you know, throw us off, say a little bit, but we're still going to have cash flow to support that particular time frame. So even if I show us getting out of debt at a certain time frame, I'm going to add an additional buffer just to accommodate and account for new debt that will enter in the future. We just don't know what that number is yet. So in the meantime, we'll do velocity banking on the primary for about four years or less. And it'll just be purely dependent on what their cost of money is in their heloc. At some point in the next four years, we may also look at a first lien heloc, because if interest rates go down, then prime is currently at 7.5%. They have a mortgage rate of 7.38%. If interest rates go down to like seven, six and a half in the next year or two years, even if it drops a point, we could look into re first lien mortgage into a first lien HELOC at a lower interest rate, possibly even get a fixed rate for about three to five years in that time frame. Faster than making extra payments. Why? Because we change the amount of interest that they end up paying and if I can get them from a higher rate to a lower rate, no one can argue that person is going to get out of debt faster. Nothing to argue there. So I'm very excited about that potential, but I'm not betting on it. So if that never happens, that's okay. What did I say earlier in the video? I treat velocity banking like a switch. So the moment it stops making sense, meaning the cost of money daily in your line of credit is higher than your cost of money daily on your mortgage, then we stop and just make extra payments. Because you want to secure the wins and victories that you got with velocity banking. Secure the win stop now, just do extra payments because you're so far ahead of the person that was just making extra payments. You used both in the right timing, in the right order, which is amazing for you, which now is going to cut down the amount of money we're going to need for retirement. So by this person living a debt free life, they're relinquishing additional expense obligations in their finances, which means on the retirement side, I now need less money to live on. So that's less pressure on how my investments need to perform. Many of us think we need to earn 50%, 100%. This is why we get caught up in scams, schemes, deceptions, manipulations. Gurus and influencers telling us to do things with our money that they themselves don't do. Number one or two, they do it because they have all this other passive income from being a guru and influencer and charging tens of thousands of dollars to fund that asset. So it's very easy for them to say, yeah sure, versus when your main source of income is your career. And then you're betting on this performance because you think you don't have a lot of time and you think you have to take on massive risk. It's totally out of alignment according to your investor DNA, how you operate, how you make decisions. So you mean to tell me you're making a financial decision because of some guru like me told you to do it without you doing proper due diligence, without you asking yourself or at least praying whatever your faith is, without at least saying, wait a second, do I actually want to have a 300 unit apartment building? Do I actually want to invest with the government and be a government contractor and do that? Do I actually want to have an online store and invest money in Shopify and E commerce and do all that? And Etsy? Do I actually want to become a content creator influencer? Like have you actually asked yourself what do I want with my life? What are my values and beliefs? And then how do we get investment opportunities to line up with that? I think that's a much better solution. So the fact that we know what we want here in this example, we want to do real estate investing, we want a laundromat, we want a dental practice. So that means Bitcoin's not in the discussion here, that means online stores. Not in the discussion here, not yet, Maybe over time. That means joining an mlm, not in the discussion here. That means investing your money with some group, some private group over here and they're going to invest in notes and pay you 20% per month for the rest of your life. That's not what's going on here. So you're able to like literally cancel out so many opportunities. You're able to say no confidently and not get influenced because someone throws 500% returns your way, somebody throws 100% return your way, you're like, okay, that's just not alignment with my values and beliefs. That's just not in alignment with where I'm going. So this on the right hand side of the board is just going to show first where we can deposit, park, deploy dollars, grow it tax free, not take risk without having to take massive risk. We're going to see how that money compounds over time by reducing taxes and fees and risk altogether. And then I'm going to show how much capital we have to work with when we get to around that time frame of 65 to 67. I'm also going to show a estimated time frame when we'll be debt free in the next video, in the part two of this video and just show you all the, all the components of what's happening here. So for those of you that would like to run your numbers just like this, do a one to one session with me. Receive financial coaching, support, accountability, get the training that you need, get the education, literacy that you need. I do this one to one. I've been doing this for seven years now with a lot of different families. I've been able to witness people retire debt free, have guaranteed and passive income to take care of all their lifestyle expenses and then operate out of abundance with their activity income in the thing that they transition to while still investing money, while still saving money and having their legacy set up. Like, it's amazing to watch. So if you've gotten to the point where you've been watching the material on this channel and maybe other similar channels and you're trying to decide who I want to work with, you can book an initial consultation with me, one hour on my website and click the link below and you'll see the different options. Or if you're like, you know what? I'm all in. I've been watching this guy for four years. I'm not fooling around anymore. I started watching him since COVID I wasn't ready. I got better. Life got better. My finances. I'm making more income now. Been able to knock off these debts. Maybe you're that person. Make a prayer. You lead with faith. Or maybe you don't. And it's a logical decision. Like, I've been following this guy for four years. He's helped me pay off da da da da. He's giving me these tips. He's helped put so much money in my pocket. Let's make a partnership. Let's take it to the next level. Let's get your numbers on the whiteboard here. Let's calculate this. Let's document it. Let's hold you accountable. Let's have some fun again. My name is Denzel Rodriguez, personal finance geek of the 21st century. Have a wonderful day. God bless. Keep talking soon. Lead with faith. Or maybe you don't. And it's a logical decision. Like, I've been following this guy for four years. He's helped me pay off da da da da. He's giving me these. These tips. He's helped put so much money in my pocket. Let's make a partnership. Let's take it to the next level. Let's get your numbers on the whiteboard here. Let's. Let's calculate this. Let's document it. Let's hold you accountable. Let's have some fun again. My name is Denzel Rodriguez, personal finance geek of the 21st century. Have a wonderful day. God bless.