What is Cashflow?

Let me ask a question.  We all want to be financially independent right?  But how?  Most people will say work hard/get ahead, save and live comfortably.  But is it really so?  To be FI means not to worry about income and doing what you like (with a lifestyle of your own choosing).  What if you don’t have a steady paycheck anymore, can you still sustain your lifestyle?  For how long?  What if you just came out of a messy divorce, or a death/disability in the family?  What about a disease that will take all of your savings to treat?  

FI definition is affected by culture, housing price, and many other factors. In general though, learning about how money works, recognizing what makes positive and negative cashflow, and getting into investments early enough to generate positive cashflow would probably do the trick. Robert Kiyosaki puts it simply that any financial arrangement that puts money in your pocket is positive cashflow and any that takes money out is negative cashflow.  

So cashflow in real estate is a very specific concept where your investment property generates some gross income, and taking out the operating expenses and loan payments, what’s left is the cashflow.  Basically, that is your disposable cash to do whatever you like with, and imagine that you are receiving $5,000 or 10 or 20K/months and no mortgage to worry about. What kind of life will you lead?   And what if you learned how to use OPM so you do not have to save up all the cash to get into REI?

Real estate investing has the potential to bring you to that state sooner than you think.  Many multi millionaires are produced each year with REI.  I am on this journey and would welcome your joining.  But first, there are lots of financial education we need for ourselves.  Our school system did not prepare us for what is needed to be generating passive income and cashflow.

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