Cash Flow of Rich versus Poor

Managing your Cash Flow properly will make you rich.

To make is easier to grasp what is your cash flow, you simply need to know how much is the money that comes into you ,and know also what comes out from you.

If what comes out is more than what comes in, then you are actually cash flow negative. This means trouble. You will be depleting your savings if you have any, or worse, your debts will balloon.

Our goal must be to have a positive cash flow which in turn must be invested to STOCKS and MUTUAL FUNDS which will generate more cash to add to the income.

Cash flow negative is like a pail with holes being filled up. The water that comes into the pail is the income, while the water that comes out of the holes are the expenses. If the inflow of water is less than the outflow in the holes, the pail will never be filled up, thus cash flow negative. Result... you'll never have water in pail.... you'll be poor.

Most people who are poor are like owners of the pail with holes. Instead of plugging the holes, the poor continually drills additional hole in their pail thus, creating more holes where the water will come out faster than the water that gets in. Thus, ending up poorer in the process.

On the other hand, the rich also owns the same pail of water with holes, however, instead of drilling additional holes, the rich finds another source of water to fill the pail faster.

The poor spends more money to deplete his income faster- more holes into his pail, while the rich invest more money on MUTUAL FUNDS and STOCKS to generate more money- more faucets to fill up his pail.

The poor spends money on liabilities which pulls more money from his pocket, while the rich invest more money on assets that in turn puts more money into his pocket. That is the differentiators between cash flow of rich and poor.

Which one are you?

God bless!