The typical formula for financial planning is to earn enough income, so you can invest a portion of it with Wall Street in hopes that one day you'll accumulate enough wealth to retire. The plan is to sock enough money away over 30+ years and pray these investments eventually grow ample enough for you to stop working and live off the interest.
This “accumulation” model is based on Wall Street's promise: Give us control over your hard-earned money for 30 years, and through the magic of the market and compound interest, one day you'll retire rich.
At least that's the plan anyway.
But as we all know, whether its due to market downturns, poor investment strategies, or other unforeseen risks, this promise often falls flat. Plus, it takes all of the control over your future out of your hands. Even worse, the mistaken belief that accumulation is the only way to generate retirement income leaves people blind to the numerous other investment options available.
A cash flow mindset
What if instead of investing your money so that one day you might have enough income at the end of your life, you could generate more income now and know you can rely on it continuing for the rest of your life?
What if instead of giving control of your investments over to Wall Street and bankers, you could retain complete autonomy over your financial reality? And what if all you had to do to achieve these goals is to change your mindset about investing?
This new mindset simply requires you to stop focusing on accumulation and begin focusing on cash flow.
To generate increased cash flow, you could invest in income-generating assets that aren't tied to the market's interest rates, but instead to that which you're connected and control. These kinds of investments can provide you with income in the near term (often on a monthly basis) rather than decades down the road—and it continues for life.
A self-sustaining model
At some point, the cash flow from these assets becomes self-sustaining. When this happens, instead of waiting 30 years to retire from your business, you can retire into your business in 5-10 years or even sooner.
When done well, creating a cash flow model centered around what you truly enjoy, you may not want to retire from your business for a long time, if ever. By focusing on cash flow instead of accumulation, you don't have to sacrifice your happiness now and wait until your 60s to really live life.
Cash-flow-based investing lets you enjoy life now, with the peace of mind that your financial objectives are already being met.
Keep your money in motion
Just like water stagnates when it's left to accumulate, so does money. The key to cash-flow investing is to keep your money in motion. Rather than letting it sit in retirement accounts for decades, while your banker and broker uses it to make more cash for themselves, you could leverage your money to generate income for yourself now.
Investing your money in cash-flow-generating assets is absolutely doable, and the exploding popularity of the “side hustle” shows that just about anyone can do it. Best of all, since you're already a business owner, you know you're capable because you've created at least one successful income stream already.
Some of the most popular of these assets include rental properties, equity investing, and cash-rich small businesses like car washes and coffee shops. Today, however, web technology has created a boom of new opportunities through online crowdfunding, eBay, peer-to-peer lending, Uber, online business, and many others.
And though you may think you should invest in an entirely new business, it's often easier and more efficient to produce multiple income streams from the business you already own. For example, if your business has a website, there are all kinds of potential revenue sources, from online ads and affiliate marketing to podcasting, e-books, and membership programs.
And no matter what kind of company you run, you can always use your business expertise to make money through consulting, public speaking, book royalties, and franchise opportunities.
Shift your strategy today
With so many investment opportunities to choose from, it's never been easier to secure your financial future by creating multiple income streams. If you're ready to shift your investment strategy from accumulation to cash flow, contact us so we can help.
We'll ensure your current business is as financially sound as possible, so you have ample cash on-hand to fund new ventures. Then we'll help you find ideal new assets to invest in, and work to ensure that each one generates maximum income with minimal risk.
We can coordinate your legal strategies, tax planning, insurance policies, and financial systems for all of your business assets, so you can keep your money in constant motion and working for you, not Wall Street.
We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.