Velocity Banking vs. Infinite Banking

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Velocity Banking is fairly similar to Infinite Banking. Infinite Banking is where you use a life insurance policy essentially as your bank account. Velocity Banking in contrast is using your home mortgage as your virtual bank account. Velocity banking allows you to pay your home off faster while also allowing you a line of credit for making purchases or investments. It’s a pretty unique trick for entrepreneurs or just people who are heavily invested in cultivating their net worth.

Key Takeaways:

  • With Velocity Banking, you put extra cash into a HELOC as opposed to a life insurance policy.
  • Velocity Banking wrongly assumes all liabilities need to be paid off as fast as possible.
  • With Velocity Banking, your equity is exposed during housing market downturns.

“Infinite Banking (also known as Privatized Banking) is a strategy of using a specially designed, dividend-paying, high cash value whole life insurance policy with a mutual company as a place to store cash.”

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