How To Use Velocity Banking To Create Capital For Your Startup

This podcast discusses how to leverage velocity banking to generate capital for starting a business, particularly focusing on a financial coaching practice. It involves creating a debt-free timeline, outlining startup costs, and exploring options like saving or using credit cards to fund the venture, ultimately aiming to create enough income to replace a traditional 9-to-5 job and achieve financial freedom.

Debt-Free Timeline

• 00:00:27 Creating a debt-free timeline helps determine the time it takes to eliminate existing debt and begin saving/investing to generate cash flow. An example is provided where it would take 6 years to become debt-free, leading to an additional $4,500 monthly cash flow. This timeline acts as a guide for planning future financial decisions.

Startup Capital Options

• 00:02:30 The speaker explores various options to build working capital for a startup. These include saving money over time, as in the example of saving $1,500 monthly for 9 months to gather $13,500 for startup expenses. Another approach is utilizing available debt tools such as a 0% credit card to cover startup costs in the short term.

Startup Costs

• 00:03:58 The speaker details the expenses involved in starting a business, including coaching fees, LLC and business setup, equipment, and marketing. An example uses a financial coaching business and estimates costs for coaching, legal/administrative fees, technology, equipment, and marketing, totaling around $13,500. These expenses are then factored into the capital acquisition plan.

Leveraging Debt Tools

• 00:08:31 The speaker discusses leveraging debt tools like HELOC or 0% credit cards to accelerate the startup process. Using a 0% credit card to cover startup costs is presented as the cheapest option, allowing the individual to begin the business 9 months earlier than saving alone. This approach leverages existing credit lines to expedite business launch.

Business Income & 9-to-5 Exit

• 00:12:22 The podcast outlines the goal of replacing income from a traditional job with income generated by the new business. Ideally, the business should generate enough income to replace the 9-to-5 income while maintaining the same net income or more, providing the safest exit strategy. However, an argument for leaving sooner can be made based on tax advantages of business income versus traditional employment income.