Velocity Banking: Pay Down 30 Year Mortgage In 5 Years!

all right everybody so in under 20 minutes i'm going to be showing you how to get 42 rental properties in 10 years free and clear all paid for as well as lower your mortgage dramatically ready set go all right so when we get paid the average american salary husband for the wife is thirty thousand dollars a year we're going to go ahead and uh add that together that's 60 000 a year then we're gonna do it in monthly increments which is five thousand dollars a month and when they get paid that five thousand dollars a month where do they put it inside of the checking account right so we have the checking account on this side the savings account on this side right okay well since that's the case what happens when we live like that do we not have a cash basis that we're living on and so that's what we're living by we're living by the cash basis now this is what i mean when you have a mortgage payment of 1200 you can't touch that mortgage payment for that month so i mean if you do you're not going to be able to pay the mortgage all right so let's go over here where the loans are okay you have a mortgage payment of twelve hundred dollars a month okay you got a two hundred thousand two hundred thousand dollar mortgage at six percent you also got a couple cars right and you're paying 600 a month on them so we're gonna put that right there uh we're also going to uh have the national average credit card liability is six hundred dollars a month and you have 600 a month right there and you also have some expenses because you have a cell phone you got that major data plan you've got food that you got to take care of maybe you want to do some little dining out and all that so you got 1200 in expenses right here you have fourteen hundred dollars left where do they teach you to put it into the savings account right okay so you have fourteen hundred dollars into your quote unquote savings account now the reason i put that in quotations is because the bank can call it whatever they want okay it's just an account where you put your money and you feel good about it because they call it savings but really it's a lending pool because if you saved up ten thousand dollars okay and you want a nice used minivan you're not gonna touch the ten thousand dollars that you saved up you're gonna go get a loan at six percent and guess what the bank is gonna do because all of your savings accounts like everybody that's contributed to the savings account that's part of the lending pool so you're ten thousand dollars they're gonna take your ten thousand dollars give it to you and say that'll be six percent interest that sounds scary to me okay so that's what uh the savings account is all about let's go ahead and gr and uh give you the six hundred dollars a month we're going to show you what that looks like on the credit card side so we're going to label this side line okay so lines over on this side and loans are over on this side it's going to be very important all right uh say you got a credit line of 15 000 you got a balance of twelve thousand dollars on the card and your six hundred dollar a month monthly payment at 21 okay now there's a lot of people that are like you know what six percent is better than 21 but i'm gonna show you how six percent over here on this side is actually greater than the 21 like by a lot okay so anyway so we have this model right here this is called the employee mindset model okay because five thousand dollars is going into your bank account and five thousand dollars is coming out of your bank account that equals a cash flow of what's 5 000 minus 5 000 guys zero okay so you have a cash flow of zero right now many of us were brought up with the employee mindset and that employee mindset says well how much do i make and we look at that top number right here the five thousand dollar while the wealthy mindset is well how much do i cash flow and that's what they're concerned about so we're going to take a look at what the wealthy do in order to utilize their finances and have their money work for them so instead of using a checking savings account that's not what the wealthy do they actually bypass the checking savings account and they put all their money into the lines of credit now why would they do that well first of all you see this 600 a month minimum payment that there that you that you're making right well you no longer have to do that because all the 5 000 is going into your line so you no longer have this payment right here which means this payment is going to go down here 600 right and because we're not chumps we're not going to have savings accounts anymore all right we're actually going to focus on cash flow and so now we are up already to two thousand dollars a month in cash flow so now that we have that let's graph this whole concept so that we could get a better better picture of what we're doing okay let's grab it we got two twelve thousand dollars of balance 15k is the limit what happens when we put five thousand dollars into our line of credit see because no longer are we spending five thousand dollars we're now spending just three thousand dollars okay the rest is actually a cash flow so let's do this let's graph it out five thousand dollars in three thousand dollars expenses five thousand dollars in three thousand dollars expensive five thousand dollars in two thousand dollars expenses and all of a sudden you can do the math in six months you'll actually pay off your line of credit in six months this twelve thousand dollar line of credit is paid off in six months now had you have done it the way the bank wanted you to do it it would have taken you four years with your six hundred dollar minimum monthly payment okay uh which one would you rather have i'd rather have this one not that one okay so let's go ahead uh and realize that we have a problem we paid off our line of credit so what are we going to do i tell you what we're going to do we are going to attack the mortgage oh man we're going to show you how to pay that off in five years however before we do that ah there are some people that maybe don't understand how a mortgage works so i want to explain that next okay watch this now this is how your mortgage works it's twelve hundred dollars a month right that you have that you have to pay okay it's divided up like this 950 of it is going to interest and 250 of it is actually going to the principal so that over time it actually looks like this okay and it's not until the end of the 30 years 30 years that the interest is less than the principle okay so now the interest is 250 and the principal is 950 towards the end of you paying off that mortgage in the 30 years but how many people do you know that have paid off their mortgages in 30-year time frame less than one percent of all americans who are current on their mortgage have ever made it to the 30-year time frame what do we usually do refi right we're gonna re-buy huh well after this video you'll never refinance again okay look at this you're gonna pay all of that interest for the seven years you refinance and you start all over again so most of americans are right here in this loop stuck like chuck let me tell you what goes on in four years all right so four years of you making that 1200 a month payment you would have paid 57 000 i want to show you how that fifty seven thousand dollars is divided up okay 48 months let's go ahead and do it 48 months your principal equals thirteen thousand and your interest is forty four thousand dollars so in 48 months you would pay the principal of thirteen thousand dollars and your interest is forty four thousand dollars listen that's too much stop doing it that way i command you to stop okay there's a better way and we're gonna show you may i suggest to you that you utilize your line of credit and this is why okay you're going to utilize your line of credit to pay 13 000 towards that mortgage so what that does is that takes a huge chunk off the back end of your 200 000 mortgage so and what you're going to do when you pay that down you're going to pay it down the same way that you paid this down you're still going to put all of your total monthly income into your line of credit okay because remember we need that debt okay we're gonna use our line of credit as our new checking and savings accounts okay so it's gonna look like this as you write that check one minute takes care of four years of payments watch this you're gonna write it you're gonna put it towards that mortgage and then you're just gonna pay it down now if we paid off our 12 000 line in six months how much how long is it going to take us to pay off the 13 000 balance six and a half months okay 6.5 months paid it off right okay so now that we've paid that off in 6.5 months uh what's going to happen now you just do it over and over and over again so you're continuing to have those principal payments okay you're continuing to do that so let's count up how much interest that will save doing uh paying our mortgage this way you spent thirteen thousand dollars right so your principal payment was thirteen thousand dollars and you had you paid that off in six and a half months and you had fourteen hundred dollars in interest doing it the line of credit way now doing it the mortgage way the old mindset where uh you would have paid thirteen thousand dollars in principal payments that took you forty eight months that's four years and you would have made an interest agents payments of 44 000 so not only is doing it the line of credit way paying your mortgage through your line of credit uh shorter you know from 30 years to five years it's also less expensive like way less expensive isn't that awesome that is awesome so remember to pay your mortgage through your line of credit all right not through your old cash basis living okay you're going to use your line of credit as your new checking account so you're just going to continue to do that every six and a half months you're just going to write a check for 13 000 boom boom boom and continue to pay that mortgage payment from your line of credit and you're gonna save tons on interest all right so um let's jump ahead five years because that's how long it'll take to pay off that mortgage so we jumped ahead five years and all of a sudden the mortgage is gone right absolutely and there's many of you that are saying man there's no way that that mortgage can be gone because that's six percent interest and this is 21 inches well there is a way that that mortgage can be gone and i'm going to show you now let me know let me know something okay i'm going to write something on the board i'm going to write 6 degrees celsius and 21 degrees fahrenheit could somebody please tell me which one is hotter okay now why did you say 6 degrees celsius was hotter than 21 degrees fahrenheit 6 is less than 21. we learned that in school didn't we but something we also learned in school is that these celsius and fahrenheit are two different units of measure well guess what the banks have done the same thing to us i sure did they didn't teach us that there's a difference between amortized interest amortized one directional interest and simple interest which is revolving so what does that mean simple interest revolving okay simple interest revolving means you can go once you pay the 600 right a month you can go to the gas station you can go to the um to the grocery store you can eat out you know and you can swipe your credit card keep on going keep on going and you can pay and then utilize that money but once you pay over here on your loans can you utilize that money ever again can you swipe at the gas station can you swipe at the grocery store listen a hundred percent of your money is gone through a loan while only 21 of your money is gone in your line of credit meaning you can utilize that money again okay 79 of this money in your line of credit you can utilize okay and so it's much which one is the better lending instrument i mean on all sides okay so now we have paid off our loans our loan for the mortgage but we still need to pay off the car so once we get rid of the 1200 uh monthly payment what happens we get rid of budgeting for it right and we add that number to our cash flow so now we're 3 200 cash flow all right so now we're just we're just having that cash pay down like you wouldn't believe okay so now we're paying off our cars in one year okay and that's 3200 cash flow we're just paying it down paying it down okay well now what when we get rid of that payment up there and we put that payment into our cash flow that's right good job cash flow 600 that'll be 3 800 now now we got a huge problem on our hands what's that problem we're out of debt and you thought it was going to take you 32 years to get rid of your mortgage in your cars it would have doing it the old way the only the old lone way we're not doing it that way anymore we're doing it the line of credit way all right it's only going to take you six years so now what we want to do is we want to get an asset because that's what you're supposed to utilize your lines of credit for assets and emergencies okay that's what you utilize them for so what we want to do is help out someone who's almost in foreclosure don't you want to help out someone doesn't feel good to help out people absolutely so someone's almost going into foreclosure and you're going to help them out okay you are and uh they're like okay well um what am i gonna do and you're the man with the plan and you say things like you know what we're gonna pay ten thousand dollars to your bank we're gonna do a subject to okay we're gonna put nine thousand dollars into uh the rehab rehabbing this single family rental here and the one thousand dollars we're going to have you go get an apartment okay and the whole thing this is a good idea because they get to avoid a seven year thing on their credit right by avoiding foreclosure and they also get to work on their credit because we'll be responsible for making those payments uh well we won't be but our tenants will be responsible for making those mortgage payments right and so when they do that it it'll increase their chances for them getting another home in the future so twenty thousand dollars right that's what the ten the nine and the one is okay twenty thousand dollar down payment help them get out one hundred this is a one hundred thousand dollar mortgage right so the average monthly rent is a thousand dollars a month minus six hundred dollars

Channel: Velocity Channel

Views: 348,204

Rating: 4.7880573 out of 5

Keywords: Velocity Banking, Debt, Mortgage Acceleration, Financial Savvy, Credit

Id: o-6RUTlv9S8

Length: 18min 3sec (1083 seconds)

Published: Mon Apr 24 2017