Cash Flow Is Everything

If you are on the path to building and generating wealth, you have probably read Robert Kiyosaki's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom, where he outlines the major areas people fall in to in terms of money flow generation. In the event you haven't read it - buy it, and read it. It is that important.

Plenty of people think the buildup of capital in the kind of money or assets (or both) equates to the buildup of wealth. I say that unless you are planning on generating money flow that you don't must trade your time for, the buildup of capital is a waste of time. Money flow on a every day or every month basis is what is necessary for us to live a specific lifestyle. Capital is only money that can be applied to work for you, or in other words, money that is used to generate positive income.

By applying your time to accumulating capital, when do you ever cease and start applying that capital to specific tasks so that it can work for you to generate passive income in lieu of you working to generate capital?

There's numerous ways to increase the money flow abilities of capital by adding value. For example, in the event you design a product and spend capital manufacturing it, this would add perceived value. When you sell the item, it creates money flow. It can be positive or negative. In the event you sell it for over the capital expenditure it cost, it would be positive, or profit, or in the event you sell it for less than it cost you to manufacture, it would be negative money flow, or a loss.

In order to release you from adding value to the capital by adding your time and knowledge to it in order to generate money flow, you require to find out where is the best place to invest your money so that it creates its own positive money inflows without any further human input from your side. The simplest way to do this is to earn interest on the capital, safely.