Do you want financial freedom?
Everyone will certainly work in this world, in some industries, develop their own business, or profession.
There is a saying well, called the money is not everything, no money totally unacceptable.
Of course, the purpose of our work is not just to make money, but to gain financial freedom!
What is the financial freedom it?
Personally think it is a state of life, it can be said to be the result of a successful, not just financial freedom.
Each person's understanding of financial freedom is different, because you need to really understand, what is your real wealth.
If so, perhaps giving, give, give .
After all, we will one day leave this world, material things can not go with one that can take away the only experience.
Reflect more representative of the wealth is freedom: freedom, happiness, joy, health, longevity, wisdom .
Or is your goal!
For example, the theme of my article: If you want financial freedom, we must first financial freedom! Financial Freedom became the first goal of free starting wealth!
So what is financial freedom?
financial freedom
I can create and buy assets that generate cash flow. My assets generated cash flow will be used to pay for my living expenses. When my monthly assets generated cash flow is equal to or greater than my monthly living expenses, I have achieved financial independence, achieved in financial freedom, because my assets to generate cash flow, it worked for me I no longer need to work for money.
I am free to do what they want to do, whether it is a leisurely enjoy life or start a new career, my time is really my own.
assets
Assets even if you stop working can put money into your pocket things.
Assets may be able to generate cash flow rental (apartment), it may also be able to bring an annual cash flow of the business (enterprise) for you.
The key is that you can regularly get money from this investment, it generates positive cash flow.
When acquiring assets, I will focus on cash flow.
If you invest in real estate, for example: you down 100,000 yuan to buy a total of 30 million small apartment as a rental. The monthly rent received in payment of property charges, after a month for the loan, leaving $ 300, your net income is 300 yuan.
$ 300 is your cash flow, it will continue to flow into your pocket.
Liabilities
Liabilities are money from your pocket and out of things.
For example, if you do not work, your car each month will pay out of your pocket, you have a car payment, gasoline, parking fees, fines and maintenance costs. Your house is also money each month from your pocket to pay monthly mortgage repayment. These are the negative cash flow.
Cash flow or capital gains
The aim of most people's investments are: cash flow or capital gains.
Capital gains are one-time gains. Cash flow is sustained earnings.
For example, you buy a house $ 300,000, $ 500,000 sold. After payment of all fees and commissions to real estate agent, your net profit is $ 150,000. $ 150,000 is your capital gains.
If you buy a stock at 20 yuan per share, and sold at 25 yuan per share, the profit is earned capital gains.
In order to obtain capital gains, you must sell your investments or assets. To obtain more capital gains or profits, you have to continue the sale of investments or assets.
And as long as you have assets (and properly managed), then the cash flow will continue to flow in. Once you have sold the asset, the cash flow is over. If you sell the investment project, part of the profits from the sale of capital gains.
The reason I like the positive cash flow, no matter whether I work, every month the money into my pocket.
My apartment building each month to put money in my pocket; my office on time every month for my sent huge returns.
My primary goal is to get cash flow inflow is greater than the cost of living expenses. I want to buy and I can create something without the need to generate cash flow for its work. We call assets.
I want my assets to work, not my work for money.
Therefore, capital gains income is secondary for me, but not the main task. Because to get capital gains, I have to sell assets. And the money will run out sooner or later, the cost of living is enough to deplete it, then I have to find another investment, then sell after buying it, be spent again, and so on ad infinitum, I can never really achieve freedom .
We have only one goal: to create and purchase assets can be paid monthly expenses of our cash flow.
We did it, "honorable retirement"!
The beauty of this one is that you do not need Financial Freedom Trail invested large sums of money. If I get a monthly income from the investment is $ 10,000, and our monthly expenses are $ 3,000.
Monthly inflow of money is much higher than our living expenses.
Of course, we do not intend to stop there, we continue to buy and create assets. With the growth of our cash flow, our living expenses have been increased, our quality of life and thus has improved.
How to calculate cash return of cash
The calculation method is very simple, expressed as a percentage, usually take annual data calculated as follows:
For example, I bought a rental price of 30 yuan, down 30%, or about 10 million. It brought $ 500 per month positive cash flow for me 6,000 yuan per year. This is 6000 yuan divided by 100,000 yuan (my investment in the real estate money) equal to 6% cash return on cash.
Let's look at the current savings, the savings rate is about 2% to 3%, in turn, projections, if you save up to 1000 yuan, a year then you will get 20-30 per bank earnings.
The reason for the focus on cash flow, because you want your money to work for you, so you do not need to work hard for money.
The role of cash on cash return is dedicated to measure the extent of your money work hard for you, and compare the performance of your investments. If you only get a 2% rate of return, then obviously it is not trying to get to work; if the investment rate of return of 50%, then it is doing pretty well.
Definition of wealth and the rich degree of
how much wealth is not money, but if you do not work From today, you can survive many days?
Full degree = (cash + non-operating income) / expense monthly
financial freedom is full of infinite extent, it seems very difficult, but in reality is simple, you do not have hundreds of millions of family property, through a steady stream of non-operating income (positive cash flow) to realise. Let us work together to start buying assets!
Earn cash flow! Earn passive income (non-operating income)!
The next serial tells you how you are earning, I found that many people do not know!
stay tuned!
