This is a YouTube video titled "Preparing To Obtain a Line Of Credit" containing a recorded conversation from December 27, 2019. The dialogue features Denzel Rodriguez advising another speaker on financial strategies, specifically about building banking relationships, managing debt, and preparing to obtain a personal line of credit. The discussion covers topics such as debt snowball methods, IRS tax debt, and velocity banking techniques.
So here's what I would say. And being in North Carolina, you already have a banking relationship with Navy Fed. They do offer. They do offer what's called a checking line of credit.
Yes.
So you could look into that. The max that they offer is 15k. You could look into that. Or if you have another credit union or local bank that offers a personal line of credit, my recommendation would be to start building a relationship with that bank, right?
Yes.
Build a relationship with that bank that offers the line of credit. Shifting all your income. Right. So shifting all income over to that new bank. Opening up a checking and a savings. Checking plus savings. And just send deposits over there. Right. Build your banking relationship with them for about three to four months simultaneously. We're doing debt snowball on your smallest debts, little by little. Another thing I would really recommend is trying to just lower your expenses overall. Lately I've been recommending a lot of people to live like this. Just in general, where you live off 70% of what you make. So if you make $10,000, then what I do is I cut myself off 30%. So I act like I make 30% less than what I actually made. And I think a lot of you guys that are doing velocity banking, if you're like really trying to accelerate your debt payoff timeline, is to Simply live off 70% of what you make. This way, this whole 30% could be used for cash flow, but can also be used as an emergency. Most people do it like this where they do 10% for taxes and 10% for saving, and then 10%, like giving or tithing. Right. But, but in velocity banking, technically you, you would have 30% more cash flow because we're using that money now to keep wiping out more debt, more expenses, things like that. And then like, stuff like giving and saving. Saving is velocity banking because we're wiping out debt, we're increasing cash flow. And then the giving part, you could just run that as an expense through your velocity banking. Taxes you don't have to really worry about because you're not a business owner, right?
No.
Right. So, you know, taxes already are taken care of for you, but if you just do, if you try to implement that lifestyle, you'll drastically increase your cash flow, which is going to help us get closer and closer to obtaining a nice, you know, personal, unsecured line of credit to work with. And then another thing is if you have any type of savings, whether that be in cash or a savings account somewhere, I would also shift that money over to the bank that you're trying to Build a relationship with. So option one of your options is Navy Fed for the credit lines. Right. Or you look for another local credit union bank in your area that offers a personal line of credit that we can, that we can get. Okay. So this is the long route. Right. This is a bit of a longer term strategy. We're basically trying to get access to, to the line of credit if they don't give us an offer from Navy Fed. Any questions?
Yeah. I didn't mention to you if you can look at the notes, I may have to set up a call with you so I can actually attack that at the notes at the last end of it. Yeah. I do owe some IRS taxes, so I'll probably have to start with that because it's killing me into this penalties as well.
Okay. That's a, that's a, that's a big curveball. Right. So that's IRS.
I should have started with that.
We got 13,179, 16. And you start paying on it from my return anyway.
So. Huh. That's what they've been doing. They've been taking from my return that I get annually. So that's how it's been decreasing. But I haven't been making any payments on that.
Okay. I would continue to allow them to take my tax return.
Okay.
So that it remains in good standing. So they're not requiring a monthly payment right now. Is that correct?
No.
So in that case, even though we're getting killed on interest, my cash flow does not go up if I pay this off. Does that make sense?
Yes.
So, so even if I had that 0% offer with Navy Fed and we said, okay, let's do a 9K chunk towards that. Yeah, you're going to save a bunch of money on interest, but there's no cash flow gain and you're still stuck at 298:59 and it's going to take you that much longer to pay off what you just shifted in debt.
Right, Right.
So I would say leave this alone. And this is, this sounds crazy because it's like, well wait a minute, that's irs. But I would definitely, I would just leave it alone, allow them to keep taking my tax returns each and every year. We really remember that first strategy that I gave based on that balance transfer. Like a lot of things happened within a six to nine month period where we had a massive cash flow. It went from all the way from 300 to almost a thousand bucks in cash flow. So it might only be another year or two that you get beat up on the interest over here. But we're going to get so much gains doing, knocking out the other things first and then coming back to this once we have a line of credit. Okay, so, so that's how I would handle that.
Yeah. Yeah. Because I realized there was nothing I can really do unless I have a personal line of credit. I really don't have a mortgage or anything.
Yeah, there's really, you know, it's such a, it's such a big debt, it's a high interest rate, and if you don't have cash flow, you're really not going to do much damage, you know. And then even with a line of credit, even if I had a line of credit today, I still wouldn't chunk at that because there's no cash flow gain from it. So now I'm, now I'm borrowing, Now I'm borrowing from Peter to pay Paul like everyone else does. I did debt consolidation and there was really no gain out of it because there's no cash flow gain. And that's the most important thing is getting a cash flow gain from shifting debt, doing the borrowing from Peter to pay Paul.
Okay. So debt snowball will be definitely what I need to do.
Or for right now. For right now, if, if we don't get the offer that they want. That we want.
Okay.
You know, and so, and then. Yeah.
So my specific question, just to reiterate that, just make sure that offer a balance. Is it, is it balance transfers only? If so don't take it if it does. If it's 0%, make sure it's between 2 to 4%.
Well, we can't, we can't do nothing. We can't do nothing about the fee. So we don't really care about that. The main thing is 0% offer. Like what is the offer? Is it 0% on purchases on balance transfers? Right. If it's a 0% balance transfer offer for nine to 12 months, or even if it's eight months or whatever the case is, can I still use the credit card to run my expenses without getting charged daily interest? Is that a possibility? If they say yes, then that means that when I swipe the card, I'm not going to get charged interest right away. That's going to help me do velocity banking on the credit card itself, where I can dump most of my income in, take expenses out, keep cash flow in. If I cannot run expenses through the credit card because I'm going to get charged simple interest daily, then I'm just going to do debt snowball on the credit card on Navy Fed for about six months and then apply for a line of credit.
