Capital appreciation is great, but cash flow is better.

The best investments pay you money to hold them.

Think dividends, rental income, royalties, business profits, interest.

We live in a unique market, where seemingly everything continues to go up.

Because of this, growth is prioritized over income.

But people who have been investing longer than a decade or so understand growth is never guaranteed.

Markets move up, sideways, and sometimes down.
Net worth is a bad measure of wealth.

If your net worth is 2 million, but your portfolio pays you nothing to hold it, the only way to access your money is to sell those assets.

Selling your assets, especially during down market cycles, could result in a loss of future income.
Inversely, if your assets provide you with consistent cash flow, you have no need to sell your assets.

In fact, it is the cash flow itself that encourages and rewards you to buy and HOLD.

That cash flow even has a chance at growing over time (and so does the asset value).
Think of it this way:

What if instead of a 2 million dollar net worth that pays zero cash flow, you had a $80k net worth and assets that paid you $80k a year.

Would you even care what your net worth was if all your expenses were paid yearly by your assets?
You might say, “Well yeah, but wealthy people can borrow against their assets rather than sell them.”

The point this misses is: you have to have cash flow to pay back the interest and eventually the loan.

A good farmer sells the fruit a tree produces, not the tree itself.
Collect assets that pay you to hold them.

Use that cash flow to purchase more assets until eventually you’re free.

You’re free when your cash flow pays your expenses.

- Dividend Stocks
- Rental Real Estate
- Interest
- Royalties
- Profitable businesses

Cash flow is king.
My favorite form of cash flowing asset is one of the most passive — dividend paying stocks.

Learn how to select your own portfolio of them from the resource I used, @DivCultivator guide.

Grab it here via my affiliate link 👇🏻…

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More from @finance_hipster

11 Jul
What is good debt?

There are 3 ways you can leverage your assets to borrow against them:

🏠 Borrow against your property
📰 Borrow against your life insurance
📈 Borrow against your stock holdings

Why would you do it?

All three provide opportunities you can’t get elsewhere 👇🏻
Im not big on owing someone something. But I can’t ignore math.

I decided to finally try one: borrowing against my stock holdings.

This debt is good debt because you have the collateral, and can leverage a great interest rate because of that for further gain. 👇🏻
I have an account with @M1_Finance that allows me to borrow up to 35% of my account value at 2% interest.

That’s a really good rate!

And instead of selling my holdings to generate cash, I can leave them alone and borrow, allowing them to grow while I still use the cash 👇🏻
Read 12 tweets
29 May
If you have your heart set on financial freedom, but all you do is plan out ways to spend your money,

I promise you that your goals and actions are not aligned.

Home deco, wardrobe updates, landscaping, hobbies, etc. all provide opportunities to to spend IF you let them.
At some point you have to make a choice to STOP.

For me, it was such a strong choice that I actually had to talk myself into spending.

Before it was the opposite.

It was an argument not to spend. Then it became an argument to spend when I noticed myself being too cheap.
But just like any life changing decision, it’s going to take a 180.

Dieting and getting in shape — you can’t half do it. You have to go all the way to find success.

And the same is true for money. The beginning is NOT going to be easy.
Read 4 tweets
23 May
I have a confession:

I do NOT own a home. I’m renting.

A few reasons:

☝️I think the market is high
☝️Renting allows me flexibility
☝️Renting takes away pressure while looking for a property I really want
☝️I think the market is high (worth saying 2X)

A few facts scare me about the housing market.

• There are currently more realtors than homes on the market
• Foreclosures and properties are being held off the market due to mortgage/rent relief
• Home prices were rising as high as 13%+ a year from bidding wars

People are feeling pressure to buy NOW, or risk losing out on current prices and getting locked out.

They’re rushing off to lock into a mortgage far and above what they originally expected to pay just a year or two ago.

I don’t want to be rushing into a $300k+ decision.

Read 10 tweets
21 May
5 money moves that will take you from broke nobody to rich somebody in 7 years (or less) 👊🏻💥


Save $1 of every $10 you make. Start here, and as it becomes easy move to $2. Then $3, until you get to saving $5-6 of every $10 earned

This will ensure you’re consistently saving and putting more of your money to work

More money saved = more money to invest

Get rid of consumer debt NOW (other than a mortgage)

Owing others money and having monthly payments zaps your cash flow

Building your monthly cash flow (amount extra you can put to work) is a key to building wealth FAST

This frees up money that goes to work FOR you
Read 8 tweets
21 Feb
Here are a few REITs (Real Estate Investment Trusts) that I own shares of:

$O - Div/Yield 4.6%
$STAG - Div/Yield 4.53%
$CUBE - Div/ Yield 3.7%
$NHI - Div/Yield 6.45%
$MAIN - Div/Yield 7.13%
$LAND - Div/Yield 2.89%

Each pay a nice dividend yield, with several paying monthly.
As a renter, I love REITs because they provide me real estate exposure that I otherwise wouldn’t have the capital to invest in 🏡

You buy shares,

get paid dividends and capital appreciation,

and someone else has to fix the roof and toilets and collect the rent.
If researching and picking out one individual REIT company scares you due to risk,

you can also invest in multiple through an ETF.

Two REIT ETFs that I own:

🔘 $VNQ (vanguard US Fund, low cost) 3.89% div/yield
🔘 $SRET (riskier, global, higher yield/cost) 8.74% div/ yield
Read 5 tweets
23 Nov 20
We discuss a lot of books on here with money knowledge —

But films 🎥 are more rare.

That doesn’t mean you can’t learn anything though.

On today’s reel, Wall Street (1987).

Get in the car —

Gordon Geeko is teaching class today.

This film is full of fast money and stock market pump and dumps 📈 📉

Classic insider trader moves and back restaurant deals.

But buried in there are actual real money and trading gems 💎

I’ve pulled a few out just for you (because I like you, that’s why)

“I look at 100 deals a day, I chose one.”

When you first start investing, every deal looks good 🤑

You want to jump on every opportunity because to you everything looks like money.

It isn’t.

Learn to sift through the junk, and find the one.

This has saved me money.

Read 12 tweets

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