{"id":298,"date":"2012-05-31T10:34:18","date_gmt":"2012-05-31T14:34:18","guid":{"rendered":"https:\/\/www.cashflownavigator.com\/blog\/?p=298"},"modified":"2013-07-02T20:46:43","modified_gmt":"2013-07-03T00:46:43","slug":"cash-flow-is-better-but-wealth-is-still-good","status":"publish","type":"post","link":"https:\/\/www.cashflownavigator.com\/blog\/2012\/05\/cash-flow-is-better-but-wealth-is-still-good\/","title":{"rendered":"Cash Flow is Better, But Wealth is Still Good"},"content":{"rendered":"

You Need Both to Complete the Picture<\/h3>\n

\"\"<\/a>You might have noticed that we devote much of our time and attention to the topic of cash flow.\u00a0 It\u2019s the lead subject of our e-booklet, a key component of our measurement tool, and is regularly featured in our blog articles. We do this in large part because cash flow tends to be neglected in most personal finance plans and resources.\u00a0 Instead, the focus is usually on wealth building\u2026increasing your net worth. <\/p>\n

To be fair, building wealth is critically important; in fact it\u2019s the first step in the two-step process of becoming financially independent.\u00a0 But there are many paths to building wealth.\u00a0 Some involve taking on substantial debt, others don\u2019t.\u00a0 Sometimes debt is used in a positive way to leverage an investment (such as an investment property or business), other times the debt<\/p>\n

Many personal finance resources do address the<\/strong><\/p>\n

wealth\/cash flow connection near the time of<\/strong><\/p>\n

your retirement.\u00a0 But why wait until then? That<\/strong><\/p>\n

approach carries with it a 40+ year opportunity cost.<\/strong><\/p>\n

carries with it a heavy burden in the form of negative cash flow.\u00a0 It\u2019s that cash flow connection to your wealth \u2013 specifically, to your assets and liabilities \u2013 that will largely determine how and when you achieve financial independence.\u00a0 That\u2019s the missing piece, or rather the missing connection \u2013 the connection between wealth and cash flow \u2013 that deserves greater attention.<\/p>\n

It\u2019s true that many personal finance resources do address the wealth\/cash flow connection near the time of your retirement.\u00a0 At that time a plan is typically developed to convert a portion of your wealth (certain assets) into regular income streams.\u00a0 For example, placing some funds into CDs that pay quarterly interest and stocks that pay quarterly dividends, or perhaps putting some funds into an annuity.<\/p>\n

That\u2019s fine, but why wait until then?\u00a0 That approach carries with it a 40+ year opportunity cost.\u00a0 Instead, why not start earlier?\u00a0 The earlier you start, the sooner you can make financial choices that build wealth while also optimizing cash flow<\/em>. That\u2019s a path that can take you more quickly through all of the stages of the financial life cycle.<\/p>\n

\"\"<\/a><\/p>\n

So we hereby set the record straight: Wealth creation is a very important part of a sound financial strategy.\u00a0 But it\u2019s just one part. \u00a0To complete the picture, generate wealth in a way that builds sufficient, sustainable cash flow.<\/p>\n","protected":false},"excerpt":{"rendered":"

You Need Both to Complete the Picture You might have noticed that we devote much of our time and attention to the topic of cash flow.\u00a0 It\u2019s the lead subject of our e-booklet, a key component of our measurement tool, and is regularly featured in our blog articles. We do this in large part because […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,17,16,8,21],"tags":[116,27,24,92,53,113,114,25,23,115,91,28,26,74,48],"class_list":["post-298","post","type-post","status-publish","format-standard","hentry","category-cash-flow","category-financial-independence","category-financial-life-cycle","category-net-worth","category-wealth-accumulation","tag-annuity","tag-assets-2","tag-cash-flow-2","tag-cash-flow-navigator","tag-cashflownavigator","tag-cds","tag-dividends","tag-financial-independence-2","tag-financial-life-cycle-2","tag-income-streams","tag-keith-whelan","tag-liabilities-2","tag-net-worth-2","tag-retirement-2","tag-wealth-2"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/comments?post=298"}],"version-history":[{"count":11,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/298\/revisions"}],"predecessor-version":[{"id":328,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/298\/revisions\/328"}],"wp:attachment":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/media?parent=298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/categories?post=298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/tags?post=298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}