Velocity Banking & Calculating Expenses

So I feel like I have to make a video talking about velocity banking and your expenses so that we can determine your actual cash flow. Having so many people reach out asking questions about what do you mean by expense expenses when we're, you know, doing this concept. So just so you know, cash flow is the money left over after all your bills, all your debts, you're saving, your investing, your emergency fund, all of that. Once you've done all of that, what's left over? If there's nothing left over, that's because you probably put everything in savings, investing or the emergency fund and whatever it is. So if we're going to do velocity banking properly, we need to what? We need to redirect some money. We need to see where are you wasting cash, where is money sitting? That can be used to accelerate my debt timeline payoff so that I can recoup all these years of paying off debt. Number one, recoup savings on interest, recoup cash flow a lot faster so I can actually use my dollar more than once and have it have more power today than later on. Like I always go over in all my videos, we have to know our four major numbers, right? What are you making per month net? What are your expenses? What's your debt? What's your cash flow? This video is specifically for all my employees. All right, so meaning you're on the E and the S side of the cash flow quadrant. Okay, I'm just talking to you guys that you make a steady paycheck every single month, your commission, you make extra money, your money fluctuates. If you're salary hourly, bi weekly, semi monthly, whatever it is. I'm talking to those people. This video is just for you in terms of managing our personal finances first so that we can jump over to the B and the I side eventually. Over time we need to have the right disciplines, the right behaviors so we can execute that properly. So there's two rules that like to follow that I like to guide people on. You have the 7030 rule which basically says, hey, whatever you make, take 30% off the top. So it means you actually made this and your goal is to live on that. So if I make 5,000amonth, times that by 70%, try to live on that. The other 30% we allocate towards saving taxes giving right now this can vary. Obviously the 10% taxes is already included if you're on the employee side. But if you're self employed, you're definitely going to want to have an allocation for that. And then I'm Going to explain how when we're doing velocity banking, how all that can come together where you don't have to literally separate 10% here, 10% there, 10% there, you don't have to set up three different checking accounts, have money, sit and do nothing and just wait for it to be spent. We can actually use that money ahead of time and still have the money later on to pay those specific things. So that's one rule, the 60, 40 rule. That's what Grant Cardone talks about where he says, try to live on 60% and then save the other 40% so that you can 10x that money, put it in the business. Basically, those are the people who are entrepreneur oriented. Business oriented, meaning, like you really do not want to spend a whole lot of time over here. You're looking to jump to this side as fast as possible. Well, if you want to jump to that side as fast as possible, following a 10x rule or 10x mindset, where you go into conservation mode, what he calls spend less than what you make. Obviously, instead of taking that 40%, what he's talking about is you save it. But then now you take that money and you apply it towards 10xing your business, 10xing sales, and stepping into that mindset. So there's that. I like to do that. These are for people that just want to jump. You want to make that jump as fast as possible. Okay, cool. Let's talk about your living expenses, your debt payments, miscellaneous extras, vacation taxes, insurances, things that you pay quarterly, things that you pay annually. Take all that stuff divided by 12 so that you can get an accurate, decent number on what you spend per month. Even if you don't spend that specific thing per month, you're allocating it on a monthly basis. So you're creating what, like a little budget here, right? So if you have a vacation that you consistently take once or twice a year, it's only happening once or twice in that month, right? On two separate months. But you want to spread out what you are assuming you're going to spend. You want to spread that out over the 12 months. Same thing with your utilities insurances. Just spread it out over the month. And then once you get that total number, overestimate it. So if you're making five grand a month and you've done all of this, you've spread everything out, you divided it by 12 and you come out to 3,000. I would overestimate it, say 3,200. Give yourself a bit of a buffer, right? Gives you like 1800 left in free cash flow. So that's how we determine our total expenses. I want you to think anything that leaves my checking account is an expense, okay? Does need to be accounted for, even if it's money that you're saving, Investing, putting in 401k, putting here, putting there, and all the other thing. When we're doing velocity banking, understand that we want to maximize our cash flow as much as possible. Some ways of doing that is we can simply redirect where we put money, we can redirect where we're putting our savings account. We can redirect the amount of money that we're putting towards investing. We can redirect our cash flow that we were putting towards X, Y and Z over here and bring it all back to us, right? And when we're doing velocity banking, we want to acquire that tool, the line of credit, okay? Or heloc. Again, talking to people that are specifically on the E and the S side, right? If you're someone that, that has a ton of debt, all right, if you're someone that has a ton of debt, you're paying a ton of interest, right? A lot of interest on debt. You've got student loans, you got car payments, you got a mortgage, you got personal loans, you got credit cards, you got the whole nine, all right? If you're in that category, you have no business investing and you should have no business saving, okay? This is radical thinking here because you're like, wait a minute, that doesn't make sense. I need to have emergency account, I need to have savings, I need to have something to fall back on. Yes, you do. Okay? I'm simply saying we need to redirect where you're saving the money and where you're investing the money, right? Because if you have money saved in a Savings account earning 0.1, 0.2, whatever, right? So you've got your little, you know, basic emergency fund, whatever. That ain't gonna do nothing, right? You got your little emergency fund and your earning nothing over there. Understand that your money loses value on a daily basis, okay? So the value of the dollar decreases every single day, loses its value due to inflation and cost of goods rising. You have to be aware of that, all right? When it comes to investing, when you're investing little dollars and hoping that that 72 rule, that rule of 72 rule does you some damage, let me tell you, it's going to take forever. Especially if you're paying a ton of debt, right? Ton of interest on the debt that you owe, what you're essentially doing is you're sending your money to go die. If you're investing in something that is outside of your control, meaning you have no control over the investment, you're hoping and praying for a rate of return, right? An ROR rate of return, 6%, 10%. Whatever it is, right? Whatever you earn over there over the course of the years, listen, you're going to be paying it back right over here. And by the time you get access to that money, you're old and gray and the money is less valuable than when you originally put it in. If you had the 10x mindset, right? Jumping over from here, over to here in a shorter period of time by maximizing the cash flow today so that we can 10x today and get debt free today. So let me give a quick example here. Let's just say you're saving 300amonth, you're investing 300amonth, you're giving 300amonth, okay? Or you're tithing, whatever it is. So you got $900. That's potential cash flow that we could use for velocity banking, right? Let's just say your normal Debt timeline is 30 years to pay off all your debt, living the same way you're currently living right now. If you were to check out the debt snowball method, let's say that could bring it down to about 13 years debt free. And then you start looking at the varsity banking concept and you see, do the math like, hmm, I can go about 50% faster, seven years, you can kill all that debt. You would have 100% more cash flow to work with because you have no more debt payments to worry about, no more interest to worry about on that load of debt that you have to maximize this 900. What we could do while paying off debt is we can temporarily stop, right? We can temporarily stop where we're putting that money and have it sit in the line of credit for a longer period of time. Okay? When we're doing the concept, I want to use the bank's money first to do my investing, my saving and my giving, right? But I'm gonna invest in paying off freaking debt, and I'm going to save by paying off freaking debt, and I'm going to be able to give more by paying off freaking debt. Do you get what I'm saying? So instead of saving money in an account that's not going to earn me anything, or investing in certain accounts that's going to cost me a lot of fees, taxes, later on, whatever it is, and then instead of just giving directly to let's say your church or an organization or a nonprofit, you could give them the bank's money or the line of credit. Money in a lump sum takes care of that for your whole entire year. Let's say you follow that. Let's say you are a Christian that believes in old testament tithing. 10%, that's your number. Well, you can, if you know your numbers, you can evaluate, okay, I'm going to make X. 10% of X is Y. I could set up a chunk right now at the beginning of the year to take care of that so that I could have that same amount of giving or however much I was tithing to the church, I could have that go back to me for the rest of the year. So I gave it ahead of time, right? Boom. When it comes to your investing and savings that 600, instead of it going into those accounts, we temporarily stop it until we're debt free or close to being debt free. And if I do the math right, and if I'm looking at your numbers and we do the math together, we could see just how much is your money growing in those accounts, how much are you actually making versus If I was to pay off debt, I could not only pay off the these institutions that are taking my cash flow, but I could also be saving interest on money that I would have paid during that time, number one. And then it's an investment because you're investing in yourself to get yourself out of the debt trap, so to speak, in this country or wherever you live. And that gives your money the ability to use it more than once. So if I could use the bank's money first to do all those things and then redirect it back to me, have the money sit here throughout the months, I'll be able to zero out whatever I borrowed, bringing my borrowing cost to zero percent. Because whatever I leverage, I do the math and I see, okay, if I leverage this, how much interest do I save? If I save three grand on interest, then whatever interest I pay over here is going to minus off the three grand. Let's say over a six month period, you pay $300 in interest over on the line of credit. All right, Well, I saved 3,000 in the first month by chunking out of debt and redirecting cash flow back to me much as possible. And I pay 300 over here on the line of credit. So I have a net positive savings of $2,700. And that's just the first month, right? As you go through the next five months, you're going to Continue to pay your debts like you normally would. Everything's coming out of the line of credit. All income's going into the line of credit. Cash flow stays in. 100% of my cash flow stays as principal so I don't lose it during those six months. And then what also is happening is as you're paying those debt payments, let's say you chunked at a car and you paid off 50% of the balance. Well, now more of that monthly payment, those next five months, more of that is going to be towards principal and a lot less towards interest. So you're saving even more money. And as long as you create a system, a chunking system, every, I don't know, three to four months, four to six, six to nine, you begin to see how many times I can use the same dollar over and over again. So I'm simply trying to challenge that concept of, of spreading money out everywhere and rather have it all go to one central location. First, being that debt tool that you're going to use, whether it be a heloc, a credit card, a line of credit, or a cash value policy, right? Look at life insurance. That's talking about the infinite banking, one of the four. I simply want to bring my cost of borrowing to zero and save thousands in terms of paying off debt. And remember, I'm talking to people who are on this side of the equation, right? Because once you get over here, it can get a lot funnier in terms of you never paying off your debt, deferring taxes, leveraging debt to your advantage, having a whole bunch of debt, having millions and millions of dollars of debt because you're earning so much on the cash flow side that you don't even care about paying off debt. So I'm not talking to those people. I'm simply talking to people that are on the E and the S side. You got a steady paycheck, family, two incomes, you know, you're putting money in savings, not doing anything for you. You put money in your 401k, you're getting charged fees out the wazoo and you're giving money. Or maybe you're not even giving money and that could be messing you up in terms of your finances. If you're not giving, if you're not giving, you are violating a financial principle in your life, period. I don't care what you believe in. If you do not give money away from the heart, right? This is like written in your heart. This is. Laws can't violate laws. Laws violate you, okay? Principles cannot be violated. The principle will Violate you, Meaning if you are someone that does not give in your household, then you are cutting off a blessing, right? You are cutting off blessing, you are cutting off miracles from occurring. You are cutting off opportunities from coming into your life. You are cutting off all these things, all these ways of being in your life. If you're not giving money, okay, I'm simply showing you how to give a little more effectively so that you can still operate in your finances, especially those that are struggling financially. If you're struggling financially, you're probably not doing any of this. Let's say you're struggling, you're not investing, you're not saving, you're not giving. So now you're really in a problem, right? Because you're not helping yourself, you're not helping others, you're spending more than what you make. We have a problem, right? Talking to people over here, right? If you're a business owner, investor, you need to just wise up, right? Get your money right, Stop playing games or else you're gonna go out of business in a while. But if you're on this side, and you don't have any knowledge of this yet, okay, you're on this side, you have no knowledge of this, the business and the investor side. You're just working paycheck to paycheck. You're a mom and you're a dad, got a home, got a property, you got kids, you're stressing out. You're in your 50s, you're in your 40s, and you're wondering, what the hell am I going to do about money? Telling you, this principle right here, this will save you so much headache. This will humble you. First off, when you get humble, then you begin to see things that I don't need in my life or things that I can do without for a temporary period of time, let's say seven years temporary period of time from age 50 to 55 or 40 to 47, 55 to 62, right? Listen, you've been on the earth for so long and you haven't managed the money, right? Can you give me seven years or less of your life to start managing, to really start committing to yourself? And especially when you get to that age, right? You know, you've been on this earth for a half a century. If you have kids and a wife, you need to make it about someone else now, because you haven't made it about you your whole entire life. So what makes you think you're going to change? The only way you can change rapidly is by making it about someone else. Right? Giving to someone else, you make it about someone else. You will create so much results, and you will open up opportunities, miracles, blessings, revelation, knowledge, going over to the B and the I side, and you'll get the results that you want in your life. Okay? So I thought I should just make that video because there's a lot of people that are over here, and there will always be more people over here than over here. Because it's a commitment issue, right? It's a commitment issue. It's a discipline issue. It's a way of being right. So if you change, you operate your mindset, you focus on this thing right here, we'll start getting the results that we want, okay? So when you start asking me those wild questions, what are expenses? You got a problem, you have a problem, you have a financial problem, okay? And you need to start opening your mind and start releasing yourself from the wants, okay? The vacation, the extra, the miscellaneous crap. What can you do without? How can you go from paycheck to paycheck to 70, 30, right? And then taking the 30 and applying that towards either.