What is Cash Flow? Here it is... De-mystified...

Understanding "what is cash flow" is one of the basic principles to obtaining financial freedom.

Many would have you think it's a complex, financial term that is beyond the understanding of your average, everyday folks.

Wrong!

Cash flow is simply, the money that comes in minus the money that goes in any period of time.

If you make $1,500 dollars in a week and spend $1,200 - your cash flow is $300. Pretty Simple.

Cash flow is the fuel that feeds the fire of your wealth, or the fuel that burns your financial house down to ashes.

If you're cash flow is negative, you're in the process of burning your financial house down.

If it's positive, now all you need to do is manage the cash flow in the right way, and you'll be financially free in no time.

Correctly Managing Cash Flow

In an ideal scenario, cash flow would be your income minus the necessary items you need to live on, food, clothes, shelter.

The difference between these dollar amounts (your cash flow) can now be used at your discretion. You essentially have 2 options for disposing of your cash flow.

1. Buy the things you want.
2. Put your Cash Flow into Savings.

Here is a key point to make. Poor people use the cash flow to buy wants. Therefore, they never get ahead because they always use the excess money to spend on things they want now.

Wealthy people, however, use cash flow to put into savings. They do this because they know they can use their savings to purchase investments that will produce cash flow - so they don't have to.

They can then use the cash flow produced by their investments to buy the things they want later.

Both the wealthy and the poor end up getting what they want, Only difference is, the poor are slaves to their stuff while the wealthy maintain their time freedom.

The Better Choice

Once you've decided to use your cash flow to buy investments that will purchase the things you want, you begin to get excited about the prospect of actually have time to enjoy other things in life.

You realize that the bigger your cash flow, the faster you can get to your goals.

How to Improve Cash Flow

Here's the formula...

1. Reduce Expenses
2. Increase Income

Follow those two steps to the best of your ability and watch out! You're cash flow will grow to be an unstoppable snowball that get's bigger and bigger crushing all you're financial obstacles in it's path.

YIPPEEEEEEEEEE!

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