You’ve probably heard me talk a lot about how your true financial goal should be generating Cash Flow rather than net worth. I’ve explained why net worth isn’t what you’re going for in Financial Freedom, but if you’re still wondering why Cash Flow is what you want to cultivate, I’m going to dig a little deeper today!
Cash Flow is an abundant passive income stream.
Imagine a scenario where you spend every day living your dreams, while your bills are paid automatically. Sounds impossible, right? Wrong! That’s exactly what Cash Flow is. Cash Flow is income that pays your bills but is passive in nature. You don’t have to work to generate Cash Flow, because you’ve invested wisely, built a strong Freedom Generator and your money is working for you.
Cash Flow is working assets that provide regular income.
A big mansion might be fun to live in, but it won’t pay you money every month. In fact, an asset like a home or a car is more likely to cost than to generate money. That’s why we refer to these as Lifestyle Assets rather than working assets. You need them to live, but they don’t produce income for you. (And you probably don’t need a big mansion) Working assets like cash, income or growth assets generate Cash Flow you can live off of.
Cash Flow is money in your pocket every month!
We all need income to support our lives and families. But we don’t have to get that income by working. Financial Freedom means the income you generate from investments pays your monthly bills. You no longer have to exchange your time for money, because you’ve invested your money in quality assets that generate Cash Flow.
Through the media, advice from others and possibly even from financial advisers, almost everyone has been taught that net worth is what you want to strive for. Understanding the reality of what net worth is versus how Cash Flow works will change your entire approach to money and set you on the path to Financial Freedom.
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Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.