Excerpt 3 from Wealth Is Good. Cash Flow Is Better©

Some Assets generate cash flow, others don’t.
For example, a savings account generates cash flow in the form of interest income. Similarly, some stocks generate cash flow in the form of dividend payments.

A car or a boat, on the other hand, generally doesn’t generate monthly income. And each depreciates in value over time as well.

What about a rental property? That’s an asset that not only appreciates in value but also generates cash flow (from monthly rental income).*

So adding Cash Flow into the mix allows us to create – and rank in importance – three types of Assets:

1. Assets that BOTH appreciate AND generate cash flow (Best)
2. Assets that EITHER appreciate OR generate cash flow but not both (2nd Best)
3. Assets that NEITHER appreciate NOR generate cash flow (Worst)

Here are some examples of the three types of Assets.

Asset	Appreciates?*	Generates Cash Flow?*	Asset Type
Rental Property	Yes	Yes	Best
Business Ownership	Yes	Yes	Best
Stocks	Yes	Yes	Best
Savings or CD Account	No	Yes	2nd Best
Primary Home	Yes	No	2nd Best
Car	No	No	Worst
Furniture	No	No	Worst

* These examples are only generalizations intended to illustrate the concept of different asset types. Not all real estate or stock appreciates, and not all stocks pay regular dividends. Nor do the examples take into account different levels of risk.