Cash is king

Cash is crucial

If Cash is king the  maximising cash flow is the path to royalty. The following article explains the importance of cash flow:

Wealth is all about growing cash flow. If you delve into optimising personal finance you will find that time and time again cash flow is the most important thing to build wealth.

Income

Obviously one of the key aspects to cash flow is your main source of income from your job. You should always be pushing to grow your income each and every year. This can be done via promotions, salary negotiations, bonuses, share options, or job moves (or all of the above!).

Saving and investing

Saving a portion of your income each and every month is extremely important. Think of it as "paying yourself". You should always want to pay yourself first and as such, put money aside in savings to grow your wealth. What remains is what you are allowed to spend that month.  In essence you are artificially reducing your cash available for disposable income and increasing your cash available for investing.

Spending 

Minimising cash flow is crucial for long term savings growth. You can have an income of £10,000 per month but if you're spending £10,001 per month then you aren't building wealth. The first step is to track what you're sending, then look to where you can cope with less.

Property

Property investment should be executed with the aim of maximising the net cash flow from the rental payments each month. Ignore any promises of capital growth from increases in house prices.

Stock market

Invest in Companies that pay a dividend. This allows you to reinvest those dividends as you see fit. You should also look at investing in stocks that produce net operating cash flow each year. Avoid investing in those Companies that cannot support their own normal every day operations.

Cash flow is the key to wealth building. Ignore it at your peril.

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