Cash Flow is King.

Despite the advances in technology and going cashless globally, the world still runs on cash. You need cash every single day, either yours or borrowed funds. This is why it is critical that your investment generates cash flow (income). Investing is about control. This includes control when you buy and sell. When you sell because you need the money (due to lack of cash flow), you don’t have control – you simply grab the best offer, sometimes amidst much pleading for the buyer to up their offer.  You may bluff, but you always come back to the table because you have no options.

When you focus on investing for cash flow, you have control over when you exit the investment. You negotiate from a position of strength. If the price is not right, you can afford to walk away and wait. While waiting, you still enjoy the cash

Buying and selling look attractive in the short term, but if you look at the Forbes Rich List, very few if any made it there by buying and selling. They own assets that generate cash flow. Donald Trump is known for real estate among other things, and much of his wealth comes from real estate holdings. When you keep jumping from property to property (flipping property as it is called), you may make a lot of money in the short term, but 20 years down the line, you may have nothing to show, because the money you made went in directions you cannot account for. If you want to become a flipper, you still need a solid base to flip from, or you may find yourself back to ground zero after a deal gone wrong.

As you gather ‘assets’, look critically at the cash flow component. Don’t tie down your money without generating income. Invest for cash flow. If you run low on cash, you are putting yourself in a financially weak position and may be forced to sell. You can earn a high income and still be broke. Cash flow is king. Do not run out of cash.

Isael Jhon