We've been talking about cash flow in the past few blog posts (Why the American Dream is wrong, Cash flow optimization: Spending Less, Cash flow optimization: Earning more). And in the last blog post (Cash flow optimization: Earning more) I talked about how a single real estate deal might not seem like a significant income-generator (when you subtract some of the property management or mortgage costs)...
... BUT when you add one deal after another, you can end up with some significant money. In the fictional example I gave in the last blog post, I suggested that you could have $28,800 by doing 12 deals and earning $200 (after expenses) from each deal. (Again remember: These are just example numbers to illustrate my point. Your deals might be different).
It might not seem like a lot (at first) but...
Now, some of you might be looking at me and thinking: $28,800 is okay but it's not going to get me a gigantic yacht or that super-powered sports car or that all-expenses-paid year-long luxury cruise around the world. In fact, $28,800 is about half of the national income average (approximately). Keep in mind: This is if you only did 1 deal a month. What if you did 2?
I promised to reveal something very important about cash flow that I hadn't mentioned yet (although you may have picked up on my hints in the last blog post)...
Sure, this $28,800 isn't a lot. But...
- It's a start (your real estate investing career is just taking off!)
- It's only one of the three Trifecta Profit opportunities where you'll make money in each deal
- Most importantly: It's MONEY YOU EARN WITHOUT WORKING.
That third point is huge. That's the real key. Increasing the income portion of your cash flow is important but it becomes even more valuable when you can increase it without working more.
Time is money
Your time is valuable and the best use of your time is creating cash flowing income that doesn't require you to do a lot of ongoing work. This lets you do even more deals and make even more money without doing a lot of extra work.
So you COULD march into your boss's office and ask for a raise. Or you COULD start a business and work extra hours to make more money. But neither of those things will give you the advantages that you'll get from regular cash flow you receive without having to work for it – passive income.
Okay, one more thing I need to tell you about cash flow... stay tuned for the next blog post…
Your passive-income-magnet mentor and friend,
Mark Evans DM,DN