Chapter Seven

Indispensable Economic Principles

Part 2: Velocity of Money

Velocity of Money is the true economic principle that makes banks rich. You can do it too. It is using your money in a way that obtains multiple uses/benefits at the same time, multiplying the value of each dollar. This is very powerful. It can be seen as the opposite of “the box system” which locks up your money under the control of the financial industry.

The guiding concept is this: money should flow to its greatest use (value) for you. Money in “boxes” cannot flow, leaving you at the mercy of the performance of that “box”. Keep in mind that financial institutions don’t use “boxes”; they use a “reservoir”. They sell “boxes” to us to get our money into their reservoir… and enforce it by imposing penalties if we take our money out of their “boxes”. What a sweet deal.  

There are several ways we can help you obtain “velocity” in your money flow. Here we use the $15,782 car loan (seen on Page 2, Chapter 5) as the example. In reality, it can be any loan.

Typically, while other money is locked in a “box” somewhere, borrowers are making fixed payments, with interest, to some bank or credit union for a fixed period. Both are single uses of money; and, as seen in The Story of Box A and Box B, growth is offset by costs. Real growth is minimal, at best. To see an alternative, please click next.

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