Why is Cash Flow King?
What means cash flow, why it is so important and why it could be the first step into financial freedom, we cover in this blog post. Because cash flow has never been as important as in times like these!
What does cash flow mean?
Cash flow is the amount of money that comes in from investments minus the money outflow or in other words every expense you have. We all aim for a positive cash flow. But what is positive and negative cash flow anyway?
Positive cash flow means having more income than expenses. A negative cash flow always occurs when you have more expenses than income. The danger is that you accumulate more and more debt and at some point you can no longer get out of this situation. That is why it is so important not to generate a negative cash flow.
What do you need cash flow for?
Cash flow is the proverbial fuel for our economic engine. So, it can pay for your rent and food, help to pay down debts or save for your financial goals. And this mechanism is the base and the first step to becoming financially free.
How to generate and increase cash flow?
There are two ways to increase cash flow.
- reduce monthly expenses
- increase income in an active or passive way
Let’s start with reducing monthly expenses.
The possibility to increase your cash flow by reducing your expenses is very limited. Because it is not possible to eliminate all your expenses. However, there are always costs that can be saved and that have an effect on your cash flow.
This can be unused subscriptions like Netflix, but also the gym that is paid but not visited. Just like cutting down on expensive vacations, shopping trips or eating out can positively impact your cash flow.
Let’s get on with increasing your income through active elements.
This is possible by working overtime or getting a second job to increase your income. This option is also limited in a way because it is time for money, and we know that everyone has only 24 hours a day.
Now we come to the more interesting part — increasing the income through the passive way.
This way leads us mostly through investing, but it must be investments that generate cash flow. Here there are several possibilities.
1. Real Estate
Real estate generates cash flow through rental income. That means you buy a property, rent it out and generate cash flow. However, real estate also requires a certain level of expertise. Because there are many points such as condition, location and much more that must be considered so that in the end not more costs than income arise.
2. Stocks
Stocks can also generate cash flow, but only those that pay dividends, which means that as a co-owner of the company you receive a portion of the profits. Here it is important to know what you are doing and not blindly buy any shares just because they pay a dividend. For example, it is useless to receive dividends of 5% per year, but the share loses 70%
3. Bonds
Bonds are debts you owe to governments or companies, which means you lend them money and receive interest payments in return. Often you get low yields on bonds, but they also have a lower risk.
4. Cryptocurrencies
It is also possible to build up cash flow with cryptocurrencies. There are many options like staking, lending, liquidity mining and many more. As the number of options alone shows, it is very important to be very familiar with these ways to generate cash flow, because otherwise you can lose a lot of money. And this is where JAVLIS comes into the game. JAVLIS is your personal cash flow butler which assists you in earning a passive income with cryptocurrencies without you having to deal with it.
As you know now after this blog post, it is important to build a positive cash flow, in the best case of course a passive one. However, there are many options and risks, so with JAVLIS we want to offer you a way to generate passive cash flow without much knowledge or work.
Are you interested? Then visit javlis.com for more information.
