Colli Real Estate

Cash Flow: the only sensible investment strategy for the XXI Century

First, the disclaimer: This is a provocative article on the basis of actual examples, articles, books and websites available to the public. This article is not intended to provide investment advice. Any action you take to the market must be the result of their own financial education and consultation with a licensed professional.

That's the conclusion Series 3 started with me that Home Ownership: The most important financial scam of the century and was followed by parts one and two of the stock market: The second financial scam greatest twentieth century.

What flows Cash? That cash flow is cash flow. The positive cash flow or income is income that a person has a job, investment or business. Most people get their money from their jobs. To the extent that they come to withdraw money from investments or business and is the measure in which they will be financially free when your working years are over. The negative cash flow is that the person loses income because of an investment or business.

Most people learn to invest capital gains instead of positive cash flow. Investment success depends upon the satisfaction of the asset underlying? rather than revenue generation. This is the basis for? Investing? in a principal residence or establishment of stock markets wealth. However, the success of the investment strategy of capital gains is not assured. Nobody can guarantee that assets appreciate in value, despite the tendency to cite the historical achievements to justify an investment today. In the current crisis in the housing market and highlight the fallacy of relying on capital gains to create wealth. Crisis housing only destroy billions of dollars of personal wealth. From 25 October 2007 Report of the Joint Economic Committee:

The report found that JEC subprime disaster is likely to accelerate the downward spiral of housing prices. Based on statewide data, the report estimates that by 2009:

? 2 million foreclosures will occur at the lowest mortgage risk rating adjustable rate (ARM) to zero this year and next.
? Approximately $ 71 million in housing wealth will be directly destroyed because each foreclosure reduces the value of a house.
? More $ 32 million in housing wealth will be indirectly destroyed by the contagion effect of the crisis, reducing the value of neighboring properties.
? The States lose more than $ 917 dollars in income taxes resulting from the destruction of housing wealth seizures caused by subprime mortgages.
? The ten states with the highest estimated number of foreclosures include California, Florida, Ohio, New York, Michigan, Texas, Illinois, Arizona and Pennsylvania. But there are several others are not far behind in the standings.
? In addition to losses due to the crisis This report examines a 10 percent drop in housing prices would lead to an economic loss of $ 2.3 trillion.

The power of positive cash flow is that it guarantees the value of an investment, regardless market. Imagine the difference between a real estate investor who bought a camera set to increase its value against the investor who bought the cash flows. Earnings investors buy in very high premiums in the market, such as the income received does not cover their investment costs. Now, the investor must find a buyer who has paid more than what he has to make a profit. If the market decline as investors feel that they can stay and probably suffer a substantial loss to clear property and limit their losses for a month. The fate of investors' money is much safer. Positive cash flows generated by the assets will continue regardless of market activity. If the falling market, Treasury will continue, the investor benefits of resistance and continued in a bear market. More importantly, Most, if not all of the positive cash flow shall be protected by property tax depreciation. In summary, cash flows, not capital gains on property generally will be tax free. Prevention of unnecessary tax is one of the best strategies for accelerating the wealth you can use. In the words of David Swenson success unconventional? Taxes affect the accumulation of wealth.?

The cash flow strategies can also be applied to the bag values.

The cash flow problems of investment is required to have a financial education. Cash flow from investment requires appetite constant specific financial knowledge of their chosen field generating cash.

The strategy encourages capital gains financial ignorance. Tempting the investors called to treat her as a fund investment in money proposition. Actively looking for financial education is the only way that an investor Cash will be successful. However, the odds are against you. Not that financial education is difficult to achieve, no. The odds are against him because of personal financial sales to all candidates meeting the investors pay commissions based on their ability to sell products and most of these products are intended for capital gains rather than cash. I found one or two real estate deals a year that the performance of positive cash flow sufficient to me to hear the case, but I'm often encouraged by agents to ignore my cash and investing criteria of more capital gains.

The strategy requires cash that you learn to work with people to build a team and generate benefits for all. A strategy of capital gains are people so focused on profit maximum not succumb to greed to exit an investment at an appropriate time and see a financial loss.

Even today? S Cash economy Bank is not a source of comfort that investors view their statements destroyed by the reduction in interest rate policies of the Federal Reserve. People who rely interest savings to provide income for retirement saw their incomes vanish as the Federal Reserve to sacrifice their incomes to rescue Wall Street banks and markets derivatives.

The actions of the Fed and the behavior of banks and Wall Street have shown that cash flow, rather than cash is king.

About the Author

Ouida Vincent is an active real estate investor and entrepreneur who has watched her friends and family members struggle under the burden of home ownership and poor returns in today

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