Here's my numbers $0 cc debt $0 auto debt $0 personal loans $0 mortgage etc thanks RAMSEY baby steps easiest way outta debt don't need hire someone to get out of debt lol
Debt snowball is for forming habits and emotional support. Debt avalanche is for improving capital productivity. Cashflow index is for freedom by recovering cashflow.
What I love about this breakdown is that it takes an insanely complex financial situation and brings order so that the client has clarity on the action to take. Reminds me of in Proverbs where it says “without vision the people perish”
One follow up question I had about the cash flow index is how to use that for HELOC or other interest only products given that the minimum due fluctuates every month.
Except you don’t see the whole vision until you run the numbers, which Denzel didn’t do in this video. He just calc’d an initial payoff plan under 3 methods. (VB & CFI are really the same.) When you do run the #’s, Debt Avalanche > Debt Snowball > VB/CFI.
I AGREE !!!! CFI + VB = WINNNNNNN :) I've been watching you and Christy for two weeks non-stop. I am using this method for a small business. I don't have any personal debt. I ran up a lot of debt renovating an old historic space as a restaurant/bar. This is so fun and exciting :) Nerds unite :):) Thank you !!
You might want to run the #’s before buying into VB/CFI - Denzel concludes these are better than the other two options because the initial freed up CF calc is a higher amount and calls it a “Win”. When you actually apply the respective payments to the facts in this case study, Avalanche > Snowball > VB/CFI.
SPOILER ALERT! The “winning strategy” to payoff debt is NOT the one with the most freed up cashflow, which is conclusion of this video. It’s the one that ultimately pays off the debt with the least amount of interest paid, IOW…most efficiently. This video doesn’t run the #’s out over time, just concludes that the one with the highest initial cashflow is the “Winner”. See the real results below. If the goal of selecting which debts to payoff with VB is to wind up with the most freed up CF, that is exactly what CFI does… as was noted. And running the #’s out shows VB & CFI are within about $40 in interest paid/speed paid off - of ALL the debt over about 4 years, in other words… $10/year. HOWEVER, using the #’s in this case study, Debt Snowball beats VB and CFI…. and Debt Avalanche beats all three of them. This has to be so… the highest cost debt is paid off first. Total interest in each method: - $41,613 Snowball - $39,143 Avalanche - $43,420 Cashflow Index - $43,381 Velocity Banking (even this small advantage likely goes away if debt #5 is also paid off under the CFI method.) VB and CFI lose out to Avalanche because the debts with the lowest index (highest payment/debt ratio) do not also have the highest interest rates. Just like you can’t out-exercise a bad diet, you can’t “win” paying off lower interest debt with higher interest debt. (Total payments/month applied in all scenarios = $6,461.37 ($500 net cashflow + the original total debt payments of $5,961.37. No interest stated for the car loans so 7% was used for all 4 of the across all 4 methods.)
A month ago and no response from Denzel? I find the debt snowball and avalanche often pay off faster and with less interest just paying cash flow to debt instead of using VB.
I appreciate the in depth work you did here. I will take a look and see how you got to your math in first looking at which debts you choose to pay off first. I’m open to dialogue as well if you are
Velocity banking has given me the mental win, for sure. As more cash flow is loosened up, I feel like I’m winning. Then paying off debt seems like less of a grind and much more of a fun game, which in turn makes me **keep going**. I’ve failed at debt snowball and debt avalanche, just quit because the path seemed so long with no intermediary rewards. I do recognize that I was more in my feelings about it all and was not moved/thrilled enough by simply seeing the numbers coming down. I appreciate your analysis here, but personally, cash flow improvement took away the emotional strangulation caused by the debt, for me. Just sharing my perspective.
I’m new to you and I have been using the snowball method. I want to know more about your process. I love the idea of the ministry of finance community!
Perhaps. But given that he is displaying integrity and sticking to his client's actual numbers, your comment misses the mark and is therefore, unnecessary in context.
No, it is absolutely unnecessary. It added no value. The context is thousands and hundreds of thousands of dollars. Cents does not change $1,000 to $2,000. You cannot round up from $1,000 to $2,000 based on the cents column. Integrity was never in question and whether or not he includes an irrelevant piece of data does not define nor establish nor confirm his integrity. His integrity is not tied to the cents column.
If you did CFI in this order 7,1,10,15,6,9,17,13,4,2,3,5 you would pay off $28,994.94 and reclaim a cashflow of $1788.39 and still have $505.06 to put towards the next debt you would skip 14 and 21 in the order of CFI to payoff the next CFI debt which is 5 but your cashflow would beat VB by $5. It's small but it could make a difference in other scenarios. After following and watching a lot of your videos I have personally been using VB to pay down debt and the order of which debt I choose to pay off and chunk at has been determined by CFI. Great video breaking down these concepts!
I’ll go back and look it definitely proves my point to add CFI to any velocity banking scenario as a guide instead of guessing or running it a bunch of different ways to find the most cashflow. This saves time for sure and money
Hey bro . Way back when I was paying things off I would take the full amount of each card and devide it by the minimum payment. List all of them and you see the amount of dollars you have to spend to free up $1 . So a $10000/ a 250 minimum = $40 per $1 freed up . Easy chart to make
Can you explain why the car loans have no interest? I heard you say they don’t but why? Do you agree that car loan interest is calculated on the current loan balance? For example, if extra payments were made to principal wouldn’t the interest be less depending on current balance? This is the best explanation I’ve seen of all the methods. Can you do one comparing paying off a 3% mortgage with cash flow payment to principal versus using an VB with an LOC at 6% and chunks towards mortgage?
I have 3 credit card debts, I'm using the avalanche method, because 1 card has 29.99% interest rate and the other two have 0 %. for 24 month. which would be better in my case!
Great video! One minor suggestion: I think the suggested formula for Cash Flow Index (CFI) is slightly different than what you presented in the video. To calculate the CFI: Loan balance divided by minimum monthly payment. I think you suggested denominator was # of payments.
@@DenzelNapoleonRodriguez very good. I realized why I was confused about this. I think the visual @ 3:17 showed “# of minimum monthly payments.” You explained it correctly, though sir. Blessings, Denzel. Keep shepherding the flock!
Debt snowball vs. Debt Avalanche vs. Cashflow Index vs. Velocity Banking vs. Consolidating Loan(s) vs. Infinite Banking vs and a new word [Surfing] this is when you get the “0” interest rate promotion offer through the credit cards.. I just learn another system last week and I am adding it to my program of paying off my bills.
Under DS your not taking into count the monthly payment saved, that could be applied to that next debt. I haven’t done the math but just looking it would be close.
@@DenzelNapoleonRodriguez what I meant to say is the single month savings could be recapitalized in your total amount of available cash to help pay down the next CC.
You stats the cashflow index wrong. The lower the number the worse the debt is. The higher the number the more efficent. You were right about the pay off first though
The explanation of the cash flow index is a little off. The higher the number is more efficient and the lower the number is less efficient. According to wealth factory.
Please send me the video and time stamp where he says that one of us is wrong and I definitely want to make sure it’s not me. If your right then everyone should be paying off their house first instead of credit cards personal loans car loans etc because the mortgage will get the highest number every time
@denzelnapoleonrodriguez Have you asked the client to shop banks and credit unions for a secured PLOC with the $29k as collateral in a savings or CD? Then he could use the $29k to VB all the debt instead of just once. Also, once the cars are paid off, he needs to get gap coverage removed from his auto insurance policy to drop the rate and free up more cash flow. Gap coverage on three cars could be enough cash flow to consider changing the order of payoff.
book a call with me here to run your numbers - calendly.com/denzelrodriguez/60min
Here's my numbers $0 cc debt $0 auto debt $0 personal loans $0 mortgage etc thanks RAMSEY baby steps easiest way outta debt don't need hire someone to get out of debt lol
Debt snowball is for forming habits and emotional support. Debt avalanche is for improving capital productivity. Cashflow index is for freedom by recovering cashflow.
What I love about this breakdown is that it takes an insanely complex financial situation and brings order so that the client has clarity on the action to take. Reminds me of in Proverbs where it says “without vision the people perish”
One follow up question I had about the cash flow index is how to use that for HELOC or other interest only products given that the minimum due fluctuates every month.
Except you don’t see the whole vision until you run the numbers, which Denzel didn’t do in this video. He just calc’d an initial payoff plan under 3 methods. (VB & CFI are really the same.) When you do run the #’s, Debt Avalanche > Debt Snowball > VB/CFI.
I AGREE !!!! CFI + VB = WINNNNNNN :) I've been watching you and Christy for two weeks non-stop. I am using this method for a small business. I don't have any personal debt. I ran up a lot of debt renovating an old historic space as a restaurant/bar. This is so fun and exciting :) Nerds unite :):) Thank you !!
You might want to run the #’s before buying into VB/CFI - Denzel concludes these are better than the other two options because the initial freed up CF calc is a higher amount and calls it a “Win”. When you actually apply the respective payments to the facts in this case study, Avalanche > Snowball > VB/CFI.
I love that you’re going to combine formulas going forward. Thank you!!!
Thank you for the support
SPOILER ALERT! The “winning strategy” to payoff debt is NOT the one with the most freed up cashflow, which is conclusion of this video. It’s the one that ultimately pays off the debt with the least amount of interest paid, IOW…most efficiently. This video doesn’t run the #’s out over time, just concludes that the one with the highest initial cashflow is the “Winner”. See the real results below. If the goal of selecting which debts to payoff with VB is to wind up with the most freed up CF, that is exactly what CFI does… as was noted. And running the #’s out shows VB & CFI are within about $40 in interest paid/speed paid off - of ALL the debt over about 4 years, in other words… $10/year.
HOWEVER, using the #’s in this case study, Debt Snowball beats VB and CFI…. and Debt Avalanche beats all three of them. This has to be so… the highest cost debt is paid off first.
Total interest in each method:
- $41,613 Snowball
- $39,143 Avalanche
- $43,420 Cashflow Index
- $43,381 Velocity Banking (even this small advantage likely goes away if debt #5 is also paid off under the CFI method.)
VB and CFI lose out to Avalanche because the debts with the lowest index (highest payment/debt ratio) do not also have the highest interest rates. Just like you can’t out-exercise a bad diet, you can’t “win” paying off lower interest debt with higher interest debt.
(Total payments/month applied in all scenarios = $6,461.37 ($500 net cashflow + the original total debt payments of $5,961.37. No interest stated for the car loans so 7% was used for all 4 of the across all 4 methods.)
A month ago and no response from Denzel? I find the debt snowball and avalanche often pay off faster and with less interest just paying cash flow to debt instead of using VB.
I appreciate the in depth work you did here. I will take a look and see how you got to your math in first looking at which debts you choose to pay off first. I’m open to dialogue as well if you are
Velocity banking has given me the mental win, for sure. As more cash flow is loosened up, I feel like I’m winning. Then paying off debt seems like less of a grind and much more of a fun game, which in turn makes me **keep going**.
I’ve failed at debt snowball and debt avalanche, just quit because the path seemed so long with no intermediary rewards.
I do recognize that I was more in my feelings about it all and was not moved/thrilled enough by simply seeing the numbers coming down.
I appreciate your analysis here, but personally, cash flow improvement took away the emotional strangulation caused by the debt, for me.
Just sharing my perspective.
I’m new to you and I have been using the snowball method. I want to know more about your process. I love the idea of the ministry of finance community!
@@charalove6867 stay tuned in keep watching the videos, join the ministry and see how I operate
The cents data is unnecessary. Leaving it off the board would cleanup the clutter and make it easier to read and understand.
Perhaps. But given that he is displaying integrity and sticking to his client's actual numbers, your comment misses the mark and is therefore, unnecessary in context.
No, it is absolutely unnecessary. It added no value. The context is thousands and hundreds of thousands of dollars. Cents does not change $1,000 to $2,000. You cannot round up from $1,000 to $2,000 based on the cents column. Integrity was never in question and whether or not he includes an irrelevant piece of data does not define nor establish nor confirm his integrity. His integrity is not tied to the cents column.
Very informative and I love the visuals. I could actually follow everything you said and for me that's saying something. Lol!
If you did CFI in this order 7,1,10,15,6,9,17,13,4,2,3,5 you would pay off $28,994.94 and reclaim a cashflow of $1788.39 and still have $505.06 to put towards the next debt you would skip 14 and 21 in the order of CFI to payoff the next CFI debt which is 5 but your cashflow would beat VB by $5. It's small but it could make a difference in other scenarios. After following and watching a lot of your videos I have personally been using VB to pay down debt and the order of which debt I choose to pay off and chunk at has been determined by CFI. Great video breaking down these concepts!
I’ll go back and look it definitely proves my point to add CFI to any velocity banking scenario as a guide instead of guessing or running it a bunch of different ways to find the most cashflow. This saves time for sure and money
Thank you Holy Spirit
I love watching you share your God Given Gifts these case studies are awesome Thank you Denzel love you man
Love this video definitely will try this strategy out🔥🔥
Did you do a follow up video?
Hey bro . Way back when I was paying things off I would take the full amount of each card and devide it by the minimum payment. List all of them and you see the amount of dollars you have to spend to free up $1 . So a $10000/ a 250 minimum = $40 per $1 freed up . Easy chart to make
Can you explain why the car loans have no interest? I heard you say they don’t but why? Do you agree that car loan interest is calculated on the current loan balance? For example, if extra payments were made to principal wouldn’t the interest be less depending on current balance? This is the best explanation I’ve seen of all the methods. Can you do one comparing paying off a 3% mortgage with cash flow payment to principal versus using an VB with an LOC at 6% and chunks towards mortgage?
I have 3 credit card debts, I'm using the avalanche method, because 1 card has 29.99% interest rate and the other two have 0 %. for 24 month. which would be better in my case!
Correct 👍 I’m pretty sure cashflow index would say the same thing
Great video! One minor suggestion: I think the suggested formula for Cash Flow Index (CFI) is slightly different than what you presented in the video. To calculate the CFI: Loan balance divided by minimum monthly payment. I think you suggested denominator was # of payments.
I did loan balance divided by monthly payment to get the cashflow index score.
@@DenzelNapoleonRodriguez very good. I realized why I was confused about this. I think the visual @ 3:17 showed “# of minimum monthly payments.” You explained it correctly, though sir. Blessings, Denzel. Keep shepherding the flock!
Debt snowball vs. Debt Avalanche vs. Cashflow Index vs. Velocity Banking vs. Consolidating Loan(s) vs. Infinite
Banking vs and a new word [Surfing] this is when you get the “0” interest rate promotion offer through the credit cards.. I just learn another system last week and I am adding it to my program of paying off my bills.
What other system?
Thank you this a great video!! ❤
LEARNING A LOT THANK YOU SO MUCH
Denzel is the man!
Under DS your not taking into count the monthly payment saved, that could be applied to that next debt. I haven’t done the math but just looking it would be close.
I did account for the increase in monthly payment along with all of the other methods. You have to or else it’s tough to determine what’s what
If you look at the bottom right I show the increase for each method
@@DenzelNapoleonRodriguez what I meant to say is the single month savings could be recapitalized in your total amount of available cash to help pay down the next CC.
The 1464 saved plus the 29500, minus 26384, gives you about 4580, almost enough to pay off 4599 CC if you use a few dollars of cash flow
That brings DS up to 1649 monthly cash flow
Love the breakdown. How would this work for someone who's commission only, such as a real estate agent?
Here is a video breakdown that Answers your questions in detail - th-cam.com/video/BVTo3rraf84/w-d-xo.html
Over Leveraged, HOT DANM!
You stats the cashflow index wrong. The lower the number the worse the debt is. The higher the number the more efficent. You were right about the pay off first though
Do it the other way around and show me how you come out with more cashflow then what I put.
Great video on the different methods ! 🙏
The explanation of the cash flow index is a little off. The higher the number is more efficient and the lower the number is less efficient. According to wealth factory.
Please send me the video and time stamp where he says that one of us is wrong and I definitely want to make sure it’s not me. If your right then everyone should be paying off their house first instead of credit cards personal loans car loans etc because the mortgage will get the highest number every time
@denzelnapoleonrodriguez Have you asked the client to shop banks and credit unions for a secured PLOC with the $29k as collateral in a savings or CD? Then he could use the $29k to VB all the debt instead of just once.
Also, once the cars are paid off, he needs to get gap coverage removed from his auto insurance policy to drop the rate and free up more cash flow. Gap coverage on three cars could be enough cash flow to consider changing the order of payoff.
That is an option as well it was discussed they already had the PLOC prior to the lump sum money
That’s if they have gap insurance but good point to spot out. Everything your saying improves velocity banking even further
@@DenzelNapoleonRodriguez Great video. Excellent comparison that explains the differences very well.
@@DenzelNapoleonRodriguez Subscribed and following. Thank you for posting great content.