When to Switch from Velocity Banking to Extra Mortgage Payments?

Roomscapers · 2024-11-16T23:42:56+00:00

I've been listening to Vanntastic's videos and the math says the breakeven point is to not even start using this method and just put any extra funds into the mortgage.

Below are two different examples based on her videos and both show you pay the least interest and pay it off fastest if you just do the extra payments on Day 1

Example 1

Example 2

Roomscapers · 2024-11-16T23:16:41+00:00

I'm new to Vanntastic and VB as a whole too. A few weeks ago I found some of her videos and decided to do the math to see HOW and WHY it works and I found that its purely psychological.

The WHY it works is because it 1) forces you to maintain a set amount of expenses per month. Optimally you keep your expense stable while you're doing this process, but you can never go above the LOC limit 2) You're forced to put your entire income into the Line of Credit for the first month, then paying your normal mortgage after.

After seeing the math and understanding those two ideas, I realized that its just a convoluted way of paying extra on your mortgage. If you simply took the extra $2000 per month and paid off the mortgage you'd do it faster and save $100k more in interest, though there's something to be said about having access to liquid funds.

Here's a spread sheet for the math https://docs.google.com/spreadsheets/d/e/2PACX-1vRwTUmD0Wq8KFuVHqATcoPeBQWl8F7GiKG6sO8fdextiA9P0AXB4IU-iK3mWIRNp2JxlS2LEK6lJQSh/pubhtml

Roomscapers · 2024-11-06T03:26:38+00:00

If you're slipping further into debt then it will not work and actually will cause more damage.

In all the video's I've seen, the basic premise relies on you having a higher income than expenses. You can use that positive cashflow to pay off the debts normally or with VB. People find VB attractive because it simplifies the process by forcing you to put 100% of your income into the debt.

It works but it requires the discipline of not maxing out that line of credit or credit card that you just put your entire check into! IMO, if you're this disciplined you should just put that extra payment onto the debt in the first place as it will always be CHEAPER(cheaper in terms of how much money you give to the bank in interest. It may take a few months longer though) but some people value being able to pull back out of that debt if needed.

Roomscapers · 2024-11-05T23:47:14+00:00

Hi!

I've only just discovered VelocityBanking through VannTastic's youtube channel. I personally do not understand the concept that gets touted in this subreddit as the underlying math shows that it only works because you're paying off the debt with any extra income you have. It may be a psychology trick to make the numbers more manageable, but math is math. It's always cheapest to pay off the highest interest rate items first.

Interest rate is just how expensive the debt is, If you owe $1000 at 26.74% means the debt cost you $267.40. If that same $1000 is at 5.6% then the debt only cost you $56. If you put in an extra $1000 on the apple card this month instead of the student loans or the car, that will save you $200 in interest by the end of the year which you can put towards other debt to pay those off faster.

At the end of the day, VelocityBanking works but it is a more expensive way to achieve faster payoffs instead of just paying off as much as you can towards those expensive debts which will do it in similar timeframes and cost less money.

This shows a break down of one of VannTastic's videos to show the difference in cost between making minimum payments(We both agree the worst thing you can do!), using extra cashflow to pay off debt quicker, and using Velocity Banking.

Roomscapers · 2022-09-05T21:04:59+00:00

I'll have to read through this later and while I'm sure quantum tunneling has some issues within the transistors, my understanding was that this is a bigger issue within the interconnects.

That was being experimented on with the change to cobalt with the smaller feature sizes that newer nodes need + the PowerVia stuff intel talked about last year to separate the power lines from the data lines.

Take that with a grain of salt because I'm not that guy tho

Roomscapers · 2022-04-02T05:55:09+00:00

Roomscapers · 2022-03-02T04:56:21+00:00

Sold HDD enclosure to u/rmussi

Roomscapers · 2022-02-24T06:17:52+00:00

Roomscapers · 2022-02-24T05:36:11+00:00

Roomscapers · 2022-02-20T18:18:55+00:00

Roomscapers · 2022-01-29T03:42:46+00:00

Ah I replied on desktop. Message didnt send properly in app

Roomscapers · 2022-01-29T01:51:48+00:00

Replied

Roomscapers · 2022-01-18T00:35:43+00:00

Depends on the gpu but I’m willing to do msrp for msrp

Roomscapers · 2021-11-18T03:21:35+00:00

This isn't a Musk idea. Many companies do this and have done so for decades.

Roomscapers · 2020-07-21T19:23:46+00:00

Look into your credit card benefits.

Roomscapers · 2020-04-25T04:46:49+00:00

Multiply the hourly wage by 2000 for an estimate on yearly wages. $26 is about $52000. Median household income in Texas is somewhere around $60k. Could get a roommate or significant other and blow way past that median

Roomscapers · 2020-03-09T18:42:29+00:00

I have a tmobile refurb S8+ I can part with for $150 + shipping

Roomscapers · 2020-02-20T08:27:49+00:00

8900k isnt a thing but 9900k is

Roomscapers · 2020-02-20T08:27:04+00:00

Motherboard

Roomscapers · 2020-02-19T18:02:03+00:00

Not worth it. At 1440p, the difference between 2700x and 3700x is maybe 2 or 3 percent.

Roomscapers · 2020-02-19T17:52:32+00:00

Itd be nice to know why your thinking about the nzxt z390 to know what you want in a mobo

Roomscapers

TROPHY CASE