Tuesday, February 28, 2006

Why Cashflow Is King!

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.

7 Comments:

Blogger Steve Mertz said...

Good morning Rajen-Greetings from Denver, Colorado USA! Thanks for your kind words and I think your readers are fortunate to have someone who focuses on Cash Flow. Wishing you all the best and I look forward to communicating with you in the future. Best Wishes, Steve Mertz

Wednesday, March 01, 2006 12:26:00 AM  
Blogger Rajen Devadason said...

Dear Steve,

I should thank you for your excellent material. Keep up the good work in your very large corner of the world.

Warmest regards,


Rajen

Wednesday, March 01, 2006 2:07:00 AM  
Anonymous mirsad todorovac said...

I am so thrilled with series of articles GET BETTER that I decided to buy Malaysian paln oil to try to return To Malaysia for giving us Rajen, besides replentishing my body's Omega-3 fatty acids :-)

In fact, Lord is the King, and cash is not everything, but Lord expects us to save and invest wisely instead of wasting money. I can simply feel His approval and blessing since trying to save and manage my money. And it is supported with verses from Ecclessiastes and Proverbs (anyone interested in a text on this?)

Rajen's article reminded me I have nothing except debts ater 10 years of working. By now I am already getting better: my cashflow investments are equal to my debts, plus I have nearly $1500 of apartment and retirement savings, which I also started after reading Rajen's articles.

I have felt motivated to seek investment funds and to invest half of my salary each month because I could not qualify for apartment loan.

My passive earnings this far are about $20 on $500 investments since beginning of January, but I felt very proud of that increase.

Wishing you well and looking forward to next creative article. And taking that healthy palm oil! Mirsad

Wednesday, March 01, 2006 9:46:00 AM  
Blogger Rajen Devadason said...

Dear Mirsad,

Thanks for the kind words. Glad your financial situation is improving. It sounds like you've made tremendous progress in your bid to generate passive income.

What were those Bible references you hinted at from Ecclesiastes and Proverbs?

Note to other readers: the GET BETTER reference that Mirsad made is to my free weekly ezine. If you're interested, you'll find out more about it at:

www.FreeCoolArticles.com

...you can either read that page and wait for the ezine invitation to come up or if you're in a hurry just click on the GET BETTER ezine link on the left of that page.

Warmest regards,


Rajen

Wednesday, March 01, 2006 12:43:00 PM  
Blogger mrsad todorovac said...

Hard work, saving and gathering are supported in Proverbs 6:6-11

6 Go to the ant, you sluggard;
consider its ways and be wise!
7 It has no commander,
no overseer or ruler,
8 yet it stores its provisions in summer
and gathers its food at harvest.
9 How long will you lie there, you sluggard?
When will you get up from your sleep?
10 A little sleep, a little slumber,
a little folding of the hands to rest-
11 and poverty will come on you like a bandit
and scarcity like an armed man.

Saving for the rainy day:

Ants are creatures of little strength,
yet they store up their food in the summer; (Proverbs 30:25)

But a warning:

10 Whoever loves money never has money enough;
whoever loves wealth is never satisfied with his income.
This too is meaningless. (Ecclessiastes 5:10)

About patience in waiting for results:

8 The end of a matter is better than its beginning,
and patience is better than pride. Ecc 7:8

Remembering the needy:

1 Cast your bread upon the waters,
for after many days you will find it again.

2 Give portions to seven, yes to eight,
for you do not know what disaster may come upon the land. (ecc 11:1,2)

My favourite (dilligence and excelling in eveyrthing we do)!

Ecc 9:10

Whatever your hand finds to do, do it with all your might, for in the grave,
where you are going, there is neither working nor planning nor knowledge nor wisdom.

Ther is also a Proverb verse saying that one who excells at work will be seated before
kings, but I could not find it right now with the Biblegateway.

I hope this helps!

Mirsad

Friday, March 03, 2006 10:32:00 PM  
Blogger Rajen Devadason said...

Dear Mirsad,

Great use of Old Testament
references to highlight
the tremendous value of
hard work and thrift.

I'm so glad you shared
what you did from the Bible.

What I write here will pass
away, but what's in God's
Word will never pass away.

Stay well and do continue
to be a part of this online
dialogue.

Warmest regards,


Rajen

Saturday, March 04, 2006 12:19:00 AM  
Anonymous Anonymous said...

Hi Rajen,

I am sorry to hear about your father and hope that you, Rachel and your family are coping well.

Your blogs and articles are great. I graduated in 2005 from the UK and have been working since then in KL. I have been spending less than I earn but the build up is too slow for me to invest in any property/funds. Also, there is a fear to lose all the hard earned savings.

How do I overcome the fear of losing my money and get started with earning passive income (other than the poor 3% fixed deposits interest banks give us here)?

Look forward to your advice.

Thanks!

Geetha

Friday, April 18, 2008 7:27:00 PM  

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