Do you want to be a Cashflow Investor… or … a Capital Gain Investor?
The real answer to this question is … it depends!
It’s important to understand the differences between the two kinds of ways to invest in order to decide what kind of strategy best suites your investing goals. Let’s describe the two types of investments for you.
Capital Gains Investing
As the words imply, this is income derived from a gain in the value of an asset. It involves profits made from the buying and the selling of an asset like a stock, a commodity or a piece of real estate or even a business. Income derived from capital gains is often referred to as “Portfolio Income”
What are some of the things to think about when considering Capital Gains Investing ?
– you are buying something and then selling something to create income
– the ability to make income is totally reliant on your ability to make good decisions in the buy and the sell of the asset, clearly you want to “ buy low and sell high “
– often there is a fair bit of speculation or what I like to call a “buy and pray” approach to this investing
– income comes in lump sums , hopefully positive lump sums
– creating capital gains takes time … sometimes very little time ….. and sometimes very long times
– the amount of money you invest in assets can be at risk, your capital value can change without you being able to do anything about it
– people who do well with capital gains investments tend to be really well educated in the asset they are investing into and understand how the asset works in order to make good buying and selling decisions
– capital gain investments tend to carry a lower level of control and thus a somewhat higher level of risk for the investor
Cash Flow Investing
The words cash and flow are two if the most important financial words to understand. Understanding how cash flows is of huge importance when investing successfully. Cash-flow Income is also referred to as “Passive Income”
– Cash Flow income can be described as making money while you sleep, having money flow into your pocket every day/week/month of the year
– it’s the kind of income that can either add to the income from your job or replace the need for a job
– it has a higher level of control and thus brings with it a lower level of risk
– it’s money you can count on coming in on a regular basis … a fixed amount every month verses a lump sum every now and then
– the money you invest in cash flowing assets is not at risk of losing it’s value as much as capital gain assets
– you can be fairly accurate and be able to predict the returns of cash flowing assets
So what kind of investing suites you?
I think the right answer to this question is both types of investing together. The ideal investment is one that can produce cash-flow on a regular basis but as has the potential to increase in value as time marches on. You guessed it!! This is why Real Estate is the choice of many millionaires to grow wealth because of its unique ability to create passive income from rents and portfolio income from the increased value of real estate over time.
I also believe that your age and stage of life has a lot to do with your preference of Cashflow vs Capital Gain assets. This simply has to do with how much time you have to maximize these investments. Younger people tend to lean to more capital gains type of investments simply because they have time on their side for these investments to grow. Older people, have less time and are more concerned about not losing money, having enough money to live on and most importantly having enough money to live on for the rest of their lives. That’s why cash flowing assets tend to be more favourable to them.
Personally, as I increase my financial education each day, I’ve learned that cash flow is more important that capital gains. My CASHFLOW ( my income less my expenses) is much much more important to me than my NET WORTH ( what I own less what I owe ). I love the concept of being able to count on making money while I sleep, day after day, week after week, month after month, year after year. If my monthly passive income from cash flowing assets is greater than my monthly expenses …. I am financially free … I no longer need that day to day, 9-5 JOB anymore. That makes me feel really good and allows me to live the lifestyle I choose and create.
My question to you is this … isn’t it worth spending time to educate yourself on Cash flowing assets in order to create financial freedom? I really believe that is time well spent.
Many of you have invested with us in “Glenroe Lending”. We provide cash flowing assets for our investors using first place mortgages in housing projects in different parts of Canada. This has become a fantastic opportunity for over 80 clients now in less than year. We believe we have created a winning cash flowing strategy that is highly controlled, has very low risk and provides a great return on your investment every month to help you pursue your own financial freedom.
If you would like to learn more about how Glenroe Lending can work for you please feel free to be in touch with me. We are always look for ways to serve as many people as possible by offering financial education and cash flowing assets to invest in. We look forward to hearing from you!
Kind Regards,
John Heeney
Glenroe Lending
“We build LEGACY to create TRANQUILITY”
john@glenroelending.ca
519 808 7370
