Understanding What’s Important — It’s Usually Not a Bunch of Cash Flow
Posted @ 9:19 pm - Filed under Capital Growth, Cash Flow, Investment Lessons, Purposeful Planning, Retirement Income
Just a thought as we move to the weekend.
You’re 15-30 years from retirement. You, or maybe you and your spouse, make more than enough money to live. In fact, you’re saving at a pretty impressive clip. What you haven’t done yet is take your retirement very seriously. Sure, you’ve been salting away money at work. (Another post entirely.) That hasn’t done much for you though.
You need to see some improved results.
You want the arrow on the chart to show your net worth growing, not your cash flow. That comes later — when you most need it — and it’s in big supply.
Here’s today’s lesson.
If Capital Growth Is The Goal — Thou Shalt Not Become Enchanted With Cash Flow Before Its Time.
Here’s why.
The more cash flow you wish to create, the more initial capital is required when first buying the property. This results in the acquisition of less property at the beginning of your march toward retirement. The difference between demanding cash flow and satisfying yourself with a break even or a cash flow trickle, will, in terms of net worth, end up costing you a dollar figure requiring two commas.
No kiddin’. 
Why? That’s easy. The investor chasing cash flow when capital growth is the way to go, winds up at retirement with some permanently missing pieces of his retirement puzzle.
Done at the front end of a Purposeful Plan, the ill advised pursuit of unneeded cash flow will also, with terrible irony, result in a reduction in retirement cash flow — a huge reduction.
If you began with $200,000 — in 20 years it is almost inevitable it would cost you six figures yearly from the day they retired until the day they died.
No kiddin’.
Chase cash flow and you’ll end up getting what you wished for. Yeah, you want cash flow. I do too. Just wish for it to show up at your retirement party. It’ll be more crowded with the extra cash flow there, but you’ll figure a way to make room. 
This entry was posted on Friday, November 9th, 2007 at 9:19 pm and is filed under Capital Growth, Cash Flow, Investment Lessons, Purposeful Planning, Retirement Income. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
