Harnessing the Velocity of Money
Are you afraid of moving money around? Don’t be. Use and keep harnessing the Velocity of Money to give you an increase and create enterprises God can use to bless you and others around you.
Acts 5:34-42 38 What I suggest, therefore, is that you leave these men alone and let them go. If this enterprise, this movement of theirs, is of human origin it will break up of its own accord; 39 but if it does in fact come from God you will be unable to destroy them. Take care not to find yourselves fighting against God.' His advice was accepted;
The Velocity of Money
Yesterday, I talked with You, Lord about the Home Credit 127k cash loan that I was approved for.
They just took out 500 processing charges and now I have 126,500 to work with at 1.871% interest per month, payable in 42 months, flexi pay, for 5,400 every month.
They texted that bank transfer is now being processed and will be completed within 2-3 working days.
Amazing. It’s definitely a gift You’ve given in answer to my prayer.
I initially meant it to pay off all my debts.
But something keeps bugging my mind, a feeling that I should do more with it, even though if I won’t use it to pay down my debts, it’ll be an additional debt to pay every month starting next month.
I just feel that it’s a gift you’ve given and I will just waste it paying off debts.
Now that I’ve learned the concept of Velocity banking, I’ve been looking for ways I can use my money more than once.
Why not velocitize this 127k so it’ll earn more?
When I say “velocitize” I simply mean harnessing the velocity of money by applying velocity banking strategies: looking for ways to move money around more than once.
The more money is moved around, the more it will create value. That’s the velocity of money.
Investopedia explained it this way:
The velocity of money is a measurement of the rate at which money is exchanged in an economy. It is the number of times that money moves from one entity to another. It also refers to how much a unit of currency is used in a given period of time. Simply put, it's the rate at which consumers and businesses in an economy collectively spend money.
Using the velocity of money is called velocity banking.
Velocity banking with 126k Cash Loan
Here’s how I think I’m going to apply Velocity banking with it:
Velocity 1: Create a Revolving Peace of Mind Account 2
I will take 20k from this 126,500 and create a new account for my Peace of Mind Fund 2.
Remember, I talked about me opening a time deposit with my Coop last month with 20k from my checking account? That’s my Peace of Mind Fund 1. I can use this account as a collateral to get a secured loan from the coop they call Back2Back loan.
So I’ve used it to pay off my bills as I intended but when my income gets delayed, I’m worried I won’t be able to pay it off and borrow again for the next round of bill payments on time.
With this additional 20k in a special savings account that earns 3% per annum for a minimum deposit of 10k (yay!), I can use it to pay off the 20k Back2Back loan from my time deposit Peace of Mind Fund 1 account so I can borrow again every time I need to pay my monthly bills and debts.
So even though my salary gets delayed, I’m assured I can still pay my monthly bills and debts on time. And then when my salary comes in, I’ll deposit it in this account, Peace of Mind 2, to refill it, ready for the next round.
See that? Peace of mind indeed.
Wow. What an answer to prayer.
Velocity 2: Another line of credit opened – Credit card + Convert to Cash loan option
I’m going to deposit the rest of the 100k in my wealth capture account (Bank savings account), then apply for a credit card with it.
Boom, I’ll have my credit card which I’ve been praying for to use for the overhead for my online business. I keep getting denied. But with this amount on my account, I was assured I’d be approved.
This way, I can use the amount limit on my credit card, hopefully, also 100k plus, to get a secured loan from the bank if I need to. They call this Convert to Cash loan.
Yay, another credit line opened.
Oh, you might be wondering what I need all this credit line for? Nothing actually. It’s just good to know that it’s there just in case I need to borrow in the future, a credit line from which I won’t have a hassle borrowing.
Velocity 3: Use this as starting Fund to open a bank account for the Trusts and Holding company I mean to create
I mean to hold my insurance policies, as well as all my assets: bank accounts, stocks, bonds, real estate, etc. in a revocable trust which I can control while I’m alive and will pass on to my beneficiary without the hassle of probate and having to pay real estate tax.
I will make this Trust my beneficiary so that my death proceeds will just go into the Trust with no hassle.
In fact, I will make 2 Trusts, one to hold my insurance policies for enterprising and the other for charitable giving, also with an insurance policy to fund it.
I’m not sure how true, but I researched that I would need 100k capital for a trust to be registered in the SEC.
And you guessed it, I have 100k for funding.
First, I will use this to register for my Enterprising Trust with a Philippine National Bank (PNB) account as the Trust’s bank while waiting for my credit card.
2nd, when I have the Credit card, I will transfer that to another PNB account which will be for my holding company which will manage my Enterprising Trust as Trustee with 100k initial shares and apply for a credit card for that too.
3rd, then when I have that credit card, I’ll transfer this to another PNB account for my Charitable Trust.
All these will show the same 100k as the initial deposit when I’m to register them together in the SEC in our capital city, Tacloban where the SEC is.
Velocity 4: Get a higher interest rate
As soon as I get my credit cards, I will transfer this 126k plus money into my GSavings account, CIMB Philippines Bank.
This is where I send my weekly 20% pay-myself-second for my wealth capture fund.
Do you know they offer a 5% per annum rate for 3 months for first-time depositors for a minimum of 100k? I hope I can still qualify cause I deposited 2500 recently since I meant this to be my wealth capture fund account just because it pays out 2.6% per annum interest.
My goodness, so much higher than the banks.
I meant to capture that 5% interest per annum for 3 months. I know it’s just a wee bit of interest but hey it’s free money.
Hopefully, also this will increase my credit score with CIMB. When that happens, perhaps I will be eligible for their fixed rate zero-interest loans where they only get 8% off the top for a maximum of 100k payable for 12 months.
Zero-interest credit line? With just an 8% deduction for processing fees? Yes, please.
They also offer a personal loan from 1k to 1M at 1.12-1.95% interest per month payable within 12-60 months.
I tried applying but I got denied. Oh well, hopefully, this 100k deposit will help my case for next time.
It would be nice to open that line of credit too.
Velocity 5: Open GCredit line
On the other hand, since I’m saving this 100k as a GSave account from my Gcash, it will certainly increase my credit score with Gcash and unlock their credit line too. Woohoo!
I like this Gcash credit line because it works like a credit card where you won’t get charged interest if you pay before your due date.
And since I use Gcash to pay my Home Credit loan, PAG-IBIG housing loan as well as our electricity bills, this GCredit will definitely come in handy if the need arises.
Oh by the way, I actually clicked their unlocked button, answered a few information about myself, and viola! I unlocked it with 2K credit on that account. I already bought a GCard that goes with it which works both as a credit card and debit card.
What grace, Lord!
Velocity 6: Start a small Enterprise
As I was walking home from my daily executive meeting with You, after mass at church – my daily quiet time with You where I write my reflections and document what You’re doing in my life to be shared on the blog – I remembered a YouTube video I’ve seen in passing, about a Payments/Remittance business.
It’s from a financial advisor’s channel, I was watching him cause I was researching about becoming a financial advisor, and he was talking about a Payment and Remittance business. It needed 480k in capital to start. So that discouraged me.
But now suddenly, You let me remember it. And then it came to me, I will start a small Enterprise from home!
So as soon as I sat down for breakfast – it’s my learning time too- I started another round of research – this time to see if there’s a Remittance/Payment I can offer from home that I can afford.
Amazingly, I found 2!
Did you know you can use Gcash as a business?
Through Gcash, you can offer these services:
- Bills payment: Pag-ibig, Home Credit, SSS, GSIS, Electricity, Water, Globe internet
- Cash in/cash out
- Bank transfers
- Money transfers
- Load: Globe/TM
I never knew that. These are mostly small sari-sari stores offering the service in their barangays.
What’s to stop me from offering the service in my barangay too? Just from home.
Since I’m already using it for myself, why not bless others by offering the service? Like for my niece who can’t cash in or out with Gcash because she can’t be verified since she didn’t have an official ID. And she doesn’t have a bank account. She still had to go to a center to do so.
I could offer it too and this way help my barangay.
There’s no capital outlay to pay GCash. You just need to have a ready fund from a connected online bank for digital transactions and a little cash on hand ready for cashing out.
And guess what? I have 126k all ready for use. Thank You, Lord!
So whether I get a customer or not, it doesn’t matter.
I also found out you need to be fully verified with Gcash so that they can give you a load wallet limit of 500k which means they will not charge you 2% if you make the 8k/month limit for those unverified accounts.
What a joy to know I’ve been fully verified ages ago! I got that coveted text that says they have increased my load wallet to 500k which I just dismissed before as unnecessary. Haha
So I’m so set with Gcash. I just need to have that cash, print up a tarpaulin signage and I’m ready to go.
The other payment business option is with Tru Money.
It’s a business app that lets you do Remittance and payment services as well. But the earnings are really small. Just 0.5% I think, cause they get a cut too.
The positive side is they have so many partners whose services you can offer too: Gcash, Western Union for international Remittance, Cebuana Lhuillier, RD pawnshop are the few ones I’m familiar with.
What I like about having True Money is I can offer Remittance and Cash-in internationally as well because of Western Union.
What I don’t like is I have to register with a business permit for them to approve my application. I’m not ready for that hassle yet.
Maybe after I take the Financial Advisor Licensure exam.
But it’s good to know that I can offer that too.
Velocity 7: Create another Time deposit account to pay off all my other debts (except the new one from Home Credit) and afterward, for my insurance premiums
I mean to pay my insurance premiums annually so that I can save on extra charges for monthly fees.
I know I can save up 100k a year.
That’s why I will move my 100k from CIMB bank (after I’ve earned the 5% interest gain for 3 months, of course, to my OCCi coop to create another time deposit Wealth Capture Fund 3.
I will then make a back2back 100k loan on this account to pay all my existing debts. That way, I’ve consolidated all my other debts into this account which means I only have this and Home Credit debt left.
Then I’ll pay this debt off this year with all my freed-up cash of 12K.
After I paid off this loan, I’ll reloan again to buy my first whole life insurance policy, paying 100k as my annual premium. After which I will pay this down monthly until the next year’s annual payment.
Velocity 8: Use this as a Fund I can borrow for my succeeding annual insurance payments.
I will use this account primarily for just paying insurance premiums.
It’s ok that I could never pay this debt off as long as I’m paying it down and buying my insurance policies, a lifelong legacy asset I can even share with generations after me.
Amazing, You just showed me 8 ways I can use that 100k instead of just using it one time for paying down debts.
That’s velocity banking!
See the beauty here? I’m able to make several wealth capture and peace of mind funds, create bank accounts for my Trusts, make several credit lines, earn interest with the 5% bank, create a small enterprise that will earn me money at home, pay off debts and save interest from paying my loans early, and finally get my first insurance policy as well as succeeding policies – yet my 100k is still sitting in that time deposit earning at least 3% compounding interest year after year!
That’s how we harness the velocity of money with the velocity banking concept.
Now your turn
What wisdom the Lord has given me.
That’s the beauty of Velocity banking that I have learned.
It’s the wise use of every dollar or peso that comes into your life so that you are able to use the same dollar or peso multiple times.
That’s the velocity of money.
The more you keep your money moving, the more it will create value rather than just have it sitting in one account, being lazy doing nothing.
Learn to harness and work with the velocity of money.
I remember Lisa of Blackpink’s solo song ‘Money’, my favorite. It says there in a signage on her MTV:
Money is a terrible master but an excellent servant.
Make money work for you.
Ask God to open your eyes to the many ways He can use whatever resources you have to make more value for yourself and the people around you.
That includes your money.
It’s like the boy in the Gospel today who gave what little he had and Jesus multiplied it to feed thousands.
John 6:1-15 1 After this, Jesus crossed the Sea of Galilee -- or of Tiberias- 2 and a large crowd followed him, impressed by the signs he had done in curing the sick. 3 Jesus climbed the hillside and sat down there with his disciples. 4 The time of the Jewish Passover was near. 5 Looking up, Jesus saw the crowds approaching and said to Philip, 'Where can we buy some bread for these people to eat?' 6 He said this only to put Philip to the test; he himself knew exactly what he was going to do. 7 Philip answered, 'Two hundred denarii would not buy enough to give them a little piece each.' 8 One of his disciples, Andrew, Simon Peter's brother, said, 9 'Here is a small boy with five barley loaves and two fish; but what is that among so many?' 10 Jesus said to them, 'Make the people sit down.' There was plenty of grass there, and as many as five thousand men sat down. 11 Then Jesus took the loaves, gave thanks, and distributed them to those who were sitting there; he then did the same with the fish, distributing as much as they wanted. 12 When they had eaten enough he said to the disciples, 'Pick up the pieces left over, so that nothing is wasted.' 13 So they picked them up and filled twelve large baskets with scraps left over from the meal of five barley loaves. 14 Seeing the sign that he had done, the people said, 'This is indeed the prophet who is to come into the world.' 15 Jesus, as he realised they were about to come and take him by force and make him king, fled back to the hills alone.
Let God multiply your money. Give it to Him and he’ll give you wisdom on how to do it, like harnessing the velocity of money.
- Learn about good money moves and how you can apply velocity banking to harness the velocity of money.
- Ask God to open your eyes to the many ways He can use your resources, including your money, to bless you and others around you.
- Make money your slave, not your master.
Thank You for Your wisdom to help me wisely manage the money You have given me by harnessing the velocity of money. Bless me so I can bless others too. In Jesus’ Name. Amen.
This is it for now. Till next time.
To our health, wealth, and victory – GODSPEED!