Retiring with Cash Flow

Retiring with Cash Flow

What is your end result for any investment or, investments you are thinking of?

Many people have money invested in managed funds and property, hopefully to be able to retire on an assets that they can draw from over their retirement. As many wealthy people continue to tell everyone is cash flow is what the rich retire on. The never have to draw down on the principle to keep the lifestyle they have.

What is more amazing is the rich don't usually get affected by market downturns because their property or other investments are based around getting cash flow not capital gains.

There are many books on this topic and many seminars to teach you about this idea. The concept though is a fairly simple one and you can use a basic financial statement to work this out on any investment. For those of you not familiar with a financial statement it is oddly enough what any and every bank and financial institution will ask for when you go to get a loan or credit card.

The basic principle is what are you making/ earning minus what you are spending or must spend. An investment's financial statement is identical. In the investments case its money out verses money in. Now if you purchase stock for capital gain you will find the cash flow is zero (Excluding dividends which are minimal usually anyway). This is because the whole idea is to use it for capital gains.

Obviously though if markets change direction capital can be lost. The reason behind trying to get investments with positive cash flow is to be able to continue to pay for your lifestyle no matter what the market is doing.

One such way is to invest using property and in particular Commercial Property. Property has a known rent and a known cost when you purchase. Commercial property is very a good positive cash flow choice due to it usually having a higher yield; commercial property yields can reach up to 10%.

The next thing to make sure you are maximising cash flow is to purchase or own a property at the lowest cost possible. This is where using vendor finance, joint ventures and even property developing can get you properties at a much reduced cost and increase the cash flow you receive. With more cash flow you can further increase your property portfolio.

To see how people are doing this and see the results some people are having visit: www.morethanapropertyinvestmentcourse.com

Article Source: http://www.articlesbase.com/real-estate-articles/retiring-with-cash-flow-2456589.html

I am an experience investor with many years in both Stock and Property markets.