Method for reducing the time needed to perform geophysical inversion by using simultaneous encoded sources in the simulation steps of the inversion process. The geophysical survey data are prepared by encoding (3) a group of source gathers (1), using for each gather a different encoding signature selected from a set (2) of non-equivalent encoding signatures. Then, the encoded gathers are summed (4) by summing all traces corresponding to the same receiver from each gather, resulting in a simultaneous encoded gather. (Alternatively, the geophysical data are acquired from simultaneously encoded sources.) The simulation steps needed for inversion are then calculated using a particular assumed velocity (or other physical property) model (5) and simultaneously activated encoded sources using the same encoding scheme used on the measured data. The result is an updated physical properties model (6) that may be further updated (7) by additional iterations.