Page 13 - Demo

Financial Independence and Cash Flow
A job.
As the word denotes, cash flow means money flows from one point to another. Creating cash flow from equities or real estate requires substantial amounts of capital and takes a lot of time to create. This is not a negative about creating cash flow from these investments, it is just a reality.
The other option for creating cash flow is through leveraged income. This is a type of cash flow that does not require a lot of capital, decades of time, overhead, employees, or other typical entrance barriers. The major investment you need to create leveraged income is your time, talents, and a network of people. While you may start out with only your time as an asset, talents and a network of people can be created.
Creating Cash Flow.
Let’s review the three basic ways to create a cash flow. They each have their pros and cons. Let’s explore each of them separately.
The most common way is a job where you find someone who will give you so much money and/ or benefits for a certain amount your time. The upside is that in a good economy it is easy to get a job. The downside is that you soon find out that whatever you make, it is rarely enough. Also, you usually must put in 40 or more hours/ week, so your free time is limited. And last, in today’s world to get better paying jobs requires a college or other advanced degree or technical training. Frequently, with the surging cost of education you spend a lot of your working career paying off the loans it took to get the better job. Even with more cons than pros for jobs, this is the way most folks start out in their quest to get rich. For many personality types, it is also the best way to create cash flow.
Investment/Residual Income
Investment income comes from investing in something that creates cash flow. This is the net worth example we used above. Typically, you take a certain amount of money saved from your job earnings and invest it in something to earn income where your direct labor isn’t involved. Investing in equities (stock in companies), real estate, or creating your own business are all viable ways to create investment/residual income or cash flow. However, they all have their pros and cons. Regardless of which you chose, to create a financially independent cash flow will require a lot of money and time. Maybe you aren’t the entrepreneur type, or you don’t have the cash or willingness to risk it all on a new business, but I always say before you decide which of these you want to participate in, be sure you know what these pro/con issues are and make sure they fit in your long-term plan.
$
LEVERAGED INCOME
Based on PEOPLE
LIMITED INCOME
Based on HOURS
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The Secret of 1982
TIME