hey guys welcome back to the VIP financial Edie Channel today I want to more deeply explain or more clearly explain paycheck parking we're commonly asked in the comments section of our videos how does paycheck parking really work so today I'm gonna more clearly describe it we're gonna go through another real-life case study and by the end of this hopefully you'll have some solutions for yourself as well as you know taking income and or cash flow throughout the month and simply depositing it into your checking or savings account means that that money is doing very little to work for you in fact really the best you could hope for from a savings account is somewhere in the neighborhood of a 2% APY annual percentage yield and when you compare that to inflation which comes in at a staggering average of three point two seven percent but that math doesn't line up for us as consumers your money would be gradually losing value each year at a rate of one point two percent at best it's that very notion that got us rethinking the behavior of typical savings including emergency reserves instead what we started doing was looking for better ways of putting that money to work for us versus giving the bank's the ability to benefit from fractional reserve banking that meant parking the income so let me give you a perfect example that I encountered last week with an audience member from here on YouTube Roger had eleven thousand dollars in high interest credit card debts this was a result of some unexpected home repairs that he had to make last summer when his basement flooded unexpectedly so he needed quick access to money to make the repairs and he didn't want to draw from his emergency funds or his retirement accounts not only were his credit card accounts affected but it immediately played a role against his credit scores bringing them down to a six seventy two and a six eighty one due to the utilization on the cards but the loans would end up ultimately costing him over twelve thousand seven hundred dollars in interest costs if he stayed on the same path now the good news is that his income is quite strong he takes home about forty five hundred dollars every two weeks but because of his lifestyle his high mortgage payments and his student loan debts his cash flow that he's left with at the end of each month averages at about $700 which he's been using for the past 11 months to rebuild his savings now after our call last week Roger started paycheck parking instead first instead of allowing his $700 in cash flow to feed his underperforming emergency fund in his savings account he took his paycheck last Friday and parked the entire $4,500 against one of his accounts which paid it off in full he also pulled three thousand dollars that he had sitting in savings and applied it towards his final credit card leaving him just five thousand dollars in the bank to pay his mortgage and student loans for the month and still have some cushion thus left him only $3500 in high interest credit card balances and one credit card completely free and clear which we're now going to be using for all expenses throughout the month aside from expenses like his mortgage and his student loans along with some utilities 90% of all of his other expenses that he pays throughout the month can actually be paid for with that credit card and because we're gonna be paying it off free and clear every month he'll now no longer have any interest costs associated with that account the road map consists of Roger taking his next paycheck and also parking that against the thirty five hundred dollars that's still outstanding which due to the interest is now going to be closer to thirty five hundred and sixty dollars which leaves him nine nine hundred and forty dollars at the end of that pay period along with the other forty five hundred dollars to pay off the expenses that were added to the credit card throughout the month the net outcome of his parking this income against his debts versus into his savings accounts as he was doing and then waiting until his expenses came up to pay them is that of the two hundred and twenty dollars per month in savings most of it was interest and he now will have a far superior credit score because of the negative impact the credit hit had to his insurance along with some of the other more obvious leaks that we helped him with in that call as well Roger managed to actually drive his cash flow following our conversation up to a whopping twelve hundred dollars every single month after just one call so that's a 71% improvement to his monthly results without any changes to his earnings or his lifestyle as these results take effect we expect Rogers credit scores to jump by more than 100 points where they were previous to his utilization of these credit card accounts which will allow him access to reserve replacement debt weapons which will allow him to have large sums of liquid reserves at any time and by shifting his focus to the student loans and the mortgages next and putting his hard-earned money to work throughout the month as many days as possible as opposed to working for the banks we're expecting every single dollar that he owes to be paid in full in under eight years in conclusion the money that's sitting and checking and savings even emergency reserves is being wasted fractional reserve banking is the practice whereby a bank accepts deposits makes loans or investments but is required to hold reserves equaled only a fraction of its deposit liabilities banks can lend up to nine times what you deposit into your checking and savings accounts which means that every dollar you put into those accounts is working for the banks and not working for you if you would rather help the bank's great if you would rather help yourself then you need to start paycheck parking right away if the act of paycheck parking due to the complexities of individual circumstances is confusing to you then you'll want to take advantage of the coaching sessions that are available in the description below free coaching calendar calm and select your preferred approach you can have a free coaching session which is awarded to every viewer who exceeds at least $500 worth of average cash flow at the end of each month by just making minimum payments and factoring all lifestyle spending and for anybody that's ready to dive in and start making changes immediately because these mathematical examples are proof enough to you that there's a better way to go about managing your money than you have been then go ahead and select one of the QuickStart options that are available to you on that same page until we speak on the phone I appreciate your viewership very much we look forward to seeing you on the next video until then make it day today and take care

26 thoughts on “THIS BANKING SECRET WILL INCREASE YOUR CASH FLOW (Advanced Financial Education)

  1. Maybe I'm missing something here, but I like watching different topics for personal interest more than anything. Here's my biggest question…….unless you are having money trouble because of irresponsible consumer spending, why would you use this?????

    Me personally, no debt and have some liquidity (personal amount I deem necessary for emergencies) and the rest gets invested. Maybe I'm just not in a position to see the advantage of such an idea/concept.

    Not trying to offend anyone with my question, just trying to gain some knowledge on the topic.

  2. Please show paycheck parking after paying all the credit card debts. Can it be used to increase savings?

  3. Love your methodical point of view. Been following your examples for a while. Keep it up thanks, Marty from Alaska

  4. What he should have done is use his emergency funds to pay for his repair. And he should have used his credit cards for other emergency's .

  5. Ok so i got a small personal line of credit from my bank to try this concept. I don't have a mortgage so I can't and don't need to do a heloc. The bank wont let me direct deposit my paycheck into the credit line and they wont let me set up automatic payments out of it. I guess all i have to do is manually transfer my paycheck into the credit line and manually pull my expenses back out into my checking account right?

  6. This works great for smaller debts, but when it comes to Mortgage a 700 Cash Flow giving 20k Lump Sum by borrowing at 8% will simply take too long to pay it, is not worth it unless you have a combined Net with a partner.

  7. I agree with paying mortgage early and using the HELOC to do it. It just seems like overkill to do the paycheck parking though. I guess I am just lazy

  8. Wonderful video. It was a clear explanation of paycheck parking. I want to do this for my auto loan and then tackle my mortgage. I need to get on the calendar for a free coaching session.

  9. But …… when the credit scores come out for the month it will include all of the charges he put on the card and it will be a wash …..when compared to his previous credit card balance

  10. I like the concept but in this case I really didn't follow how the paycheck parking worked. It's my understanding that the paycheck is "parked" in an account at the beginning of the month but is withdrawn at the end of the month to pay bills. In this particular case it looked like he was using his paycheck just to pay off an account and not really parking it.

  11. Essentially I would need 3-6 months of worth of savings to take a whole pay check and put it towards my debts? Or at least to get started? Thats what im gathering from this..

  12. Debra Mclane
    Using this method now for the last 3 months, and paying off a student loan!! Saw a big difference with the interest on the student loan since the first lump sum I put on it in June!!! The hardest thing for me is not to rush to fast to do it again! Its exciting to see the difference!! I was paying 100.00 extra a month, never saw any change, but once I put the lump sum on the account, Wow! what a difference, with only one lump sum!!! Can't wait to do this with my home mortgages!!!!
    Love how you explain this concept and can't wait to speak to you in Oct.

  13. Matt is the man! I'm a paying member with only a couple of coaching sessions under my belt. I haven't had this much peace of mind about my financial future in my entire adult life. I'm excited to have my next meeting with Matt and Joe. These guys are top notch.

  14. Thank you for making these videos. I’m just starting to wrap my head around some of these ideas. The methods definitely make sense. Applying them isn’t always easy due to each individuals circumstances though. I will be signing up for the free coaching session to get started. Thanks again

  15. I am so confused. I would love to start doing this but do I assume Roger had no other debts? We have over 100k in Cc debt and my husband and I are in our 50's we,are really scared. We don't want to file bankruptcy. Please help us.

  16. Ha, I've been doing this for years. Had no idea that this was a thing. Only I only use 0% CC's… Never even charge on interest baring cards… At least for the last five years. I now have 19 cards… But only 11% utilization…using just two cards.

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