Cash flow investing means investing your hard earned money in some kind of product, asset or business, which will in turn give you an increase in your cash. This kind of investment is much more profitable than putting your money in a bank account and leaving it there rotting. You can invest your money in different business. Although the end result and amount of incoming money depends on how well you are planning your investment, it is highly recommended that you must make your money circulate and generate fortune for you instead of keeping it freeze.
What is cash flow?
There are two main definitions of cash flow present on World Wide Web.
Definition 1: Cash flow is the movement of cash into and out of a business, or any other financial procedure.
Definition 2: A company’s complete estimation of spend and earned money in a given period of time is known as its cash flow.
Investing cash flow:
Most of the people mix together concepts of cash flow and capital gain. In capital gain you invest your cash thinking that the value of the purchased product, metal or property will increase in the future. Thus you’ll get more than what you have spent on that particular piece. This type of investment is a bit risky as we cannot predict future trends. It is observed that even the most experienced broker cannot predict future of the stock market correctly. In capital gain strategy there are greater chances of losing your hard earned money.
Whereas when it comes of investment cash flow we spend our hard earned money in buying different properties, hotels, shops casinos or similar things and give them on rent. Thus there is a valid and confirmed source of income guaranteed plus our money is also safe. You can sell your property whenever the price reaches up to the mark you had set, until then there is a good flow of cash out of your investment.
How to manage cash flow:
Like all other business strategies cash flow investment also require good and skilled management of the money. It’s up to you how you are managing your cash flow. You can just keep it on standby in your bank account or can reuse it in some other investment. You can simply increase the value of your purchased property by spending that extra amount of cash on it. The main and most important rule of managing cash flow is to make proper check and balance system between your earned and spend money.