Waking Up From Financial Fairy Tales – Why Invest For Cash Flow?
Given rapid changes going on in today's world, many schools do not train their students well in financial literacy. As a result, most people easily get ripped off by flawed financial information and lose money. Due to the spinning of financial fairy tales today, many people play the game of capital gains and deem it as the best way to get rich. However, it is important to note that there is a more sustainable way to gain wealth and that is cashflow. Let us now find out why investing for cash flow is good.
In today's world, the real financial approach you should adhere to is cash flow because every single day, the top 10% in wealth collects money passively from the bottom 90% using it. Good education is no longer enough because schools train students to spend money for the rich. For example, buying cars.
Here, the harder the bottom 90% works and the more they earn, the more money flows out to the top 10%, making them ever richer. For example, when you work harder and earn more money, you buy more luxury items like branded watches (marketed as symbol of wealth and status) and these manufacturer will earn more money from premiums charged.
Given how powerful cashflow is to the rich, many have kept their secrets very well because they do not want others to be richer than them. However, being in today's Information Age, information gets disseminated rapidly and the same applies to this secret to wealth. As a result, with information so much more accessible than before, it is much easier for us to get rich and to create wealth, you must have cash flow.
The importance of investing in cash flow lies in sustainability, consistency and predictability. Cash flow investments are better than that for capital gains (for eg buying and selling of stocks) because they do not depend on the market. For example, regardless of what shape the market is in, rental real estate will still exist because people always need places to live in. Instead, sometimes when the economy gets worse, more people will be forced to rent houses and this can provide more cash flow to the investor.
In comparison, if the economy is in bad shape, there will be a bear in stock markets and this will make capital gain investments like stocks things you would not want to hold. Here, investing for capital gains is gambling because markets always change and if you do not change your strategy with it, you will lose. As cash flow are less dependent on market situations, they are instead evergreen investments and with less influence from the market, investors can get rich more consistently as cash flow builds up.
In conclusion, I believe investors now have a clear picture of why cash flow investments are better, given that they are especially immune to market conditions compared to other financial instruments. Now, being armed with better financial artillery, win your war and enjoy the fruits!