Why Cashflow Is King!
Hi! As I write this, the water supply in my town of Seremban, Negeri Sembilan, Malaysia, is disrupted. Sigh!My office hasn't had running water all day and my home is experiencing low pressure in the mains.
Apparently, there's some work being done on the pipes at a nearby reservoir, so I believe we should get back our normal water supply within a few hours. Until that happens, we'll need to rely primarily on water stored in the reserve tank.
This situation has got me thinking about the tremendous freedom people experience when they have strong sources of income pumping cashflow into their lives, and of the extreme terror they experience when they go through a phase of having little or no cashflow.
There are essentially two primary categories of cashflow - active and passive.
The terms are self-explanatory, but for the sake of completeness let me just elaborate a little:
- Active cashflow comes from the sweat of our brow - from our salary for a job or profits from a business we run directly.
- Passive income, which is by far my favourite - flows from our savings and investment portfolios, rental properties and businesses we don't need to get involved in regularly.
So, which type of income contributes mainly to your current economic wellbeing? Which type would you like to come to the fore in the next five or ten years?
It may be depressing, but it is vital that each of us bites the bullet and asks this painful question: "What's the situation in my life right now?"
In case you want it, here is a follow-on question you can then ask yourself...
"Am I in the happy position of being able to say that if one particular source of money dries up, I'll have a few others that will tide me over as I look for ways to unclog the problematic channel or even to lay a fresh pipeline from some other source?"
What's tragic is that the average person simply isn't prepared for the possible drying up of his or her primary source of cashflow. While I was thinking about this, I did a bit of surfing and came across an awesome blog entitled 'In Cash Flow We Trust'. It's written by Steve Mertz of Denver, Colorado, USA, who used to be an investment advisor. He now speaks on money across the US. I think you'll enjoy Steve's blog. Here's how to get there:
http://incashflowwetrust.blogspot.com/
Just in case you plan on returning here to The Cool Time and Money Blog, you might want to try the old faithful keyboard combination of Control + D to bookmark this page. If you do that, I suggest you also organise this bookmark under some appropriate heading like 'Rajen's blog' or 'Useful blog' or 'Blog to free articles'... whatever makes sense to you.
OK, if you are serious about wanting to make a start on expanding your cashflow resources, you're welcome to read this free article entitled Create Many Income Streams For Yourself. And if you're super-serious about putting together a goal-setting programme that will help you move toward that hoped for destination of achieving true financial freedom, then the lessons taught in my goal-setting ebook UNLEASHED might be helpful to you.
Have fun reading. I wish you all the best in your push toward true financial freedom.Warmest regards,
Rajen
Rajen Devadason is CEO of RD Book Projects and its sister company RD WealthCreation Sdn Bhd. He lives in sunny, peaceful Malaysia with his gorgeous wife Rachel. He's a Malaysian Securities Commission-licensed financial planner, a life planning consultant, a professional speaker and a serial author... which probably explains why he's so exhausted! Some of his books are available here.
posted by Rajen Devadason at 10:09 PM
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