Show Me The MONEY!!!
If you’ve made it here GREAT, this I considered the most important section of my blog. Why? Well as my website title alludes, I’m addicted to making positive passive cash flow, and in this section I write about how well I succeeded in making that Cheddar!!! Who wouldn’t like this section of their own blog? While many personal finance bloggers write about their monthly net worth updates, I choose to focus on my monthly cash flow.
Is Cash Flow the Same Thing as Net Worth?
That’s a big fat NOPE. Net worth is a measure of assets and liabilities (assets – liabilities = net worth) while cash flow is a measure of income and expenses (income – expenses = cash flow).
So why is cash flow important?
Well, let me ask you this. Would you rather have a net worth of $1 million that you withdraw $50,000 from a year or a net worth of $1 million that earns 5% a year? Both have the same net worth ($1 million) but the second choice will earn you $50,000 a year (cash flow) for infinite years, while not decreasing in value. While the first option would only last for 20 years ($1,000,000 / $50,000yr = 20). I don’t know about you, but I don’t like running out of money and that’s why I focus on building cash flow.
If I grow my cash flow, I’m able to purchase more assets, which in turn should grow my cash flow even further. Eventually if done correctly, I no longer need to trade hours of work for money because my assets will produce enough cash flow for me to live off of. That’s why I’m such an addict when it comes to cash flow, it’s KING!
Below you can see my quarterly cash flow reports which include how I generate the cash. If you have any questions leave me a comment or shoot me a message and check back every month for a new report!