I made up a new word: CASHFLOWNAIRE!
Cashflownaire: A person who has the positive cash flow of a million (or multi-million) dollar net worth.
As you probably know from previous posts, my financial strategy changed dramatically with the big 2008 market crash. My focus today is on monthly cash flow instead of wealth (net worth).
I don’t care about being a millionaire.
I do care about being a cashflownaire.
Having a million dollar net worth may, or may not, change your life. The reason why is the majority of your wealth will be locked up in your business, your home, or in other illiquid assets. It’s hard to eat your home equity unless you borrow it. It’s hard to eat the equity in your business unless you sell it. I sold my real estate company back in 2007 to unlock the equity trapped in the business. I sold the business for 7 figures and financed a significant portion of this sale providing a check for around $8,000 a month. Life was good!
Then the buyer defaulted and the checks disappeared.
My large net worth and monthly income vanished providing me with an opportunity to really think about what I wanted in life. Did I want to rebuild the business? Did I really want be a multi-millionaire? Did I want to work 7 days a week? Did I want to hire, train, and manage employees? Did I want the massive overhead and pressure of a large business?
Slowly but surely, I realized that I didn’t want to a large net worth. What I really wanted was the income from a large net worth-ie: cash flow. I wanted the $8,000 a month. This realization was life changing for me, because I no longer had to build a big business…read more