Saturday, August 28, 2010
Cash flow is very important and a simple topic. You need more money coming in than going out. So you would think the more money you make the richer you will be. But most of the time that's not all the way true. Doctors make a lot of money but usually they have bigger houses nicer cars and more money on credit cards meaning they have more money going out than they do going in. Plus they pay higher taxes. You want to keep the money you are taxed on as low as possible to make a living. You also need to build your assets. Meaning more monthly cash flow. You acquire assets in many ways and just depends on what you want to buy. But a main asset would be apartments or a house. The monthly income from those assets will buy you the nicer things you want in your life. You should only buy major purchases like a house or a car if you have the monthly cash flow from an asset to pay for it all.