Cashflow vs Capital Gain

When investing in assets it is important to ask the question of what it is you want to acquire. You need to have some very clear goals on what you want your investments to accomplish. 

There are two types of assets to consider…

Cashflow Assets are investments that put money in your pocket on a regular basis every week/ month or year. 

  – mortgage products, positive cash-flowing rental properties are some examples.

Capital Gain Assets are investments that put larger amounts of money in your pocket usually spread out over a longer period of time (months or many years).

  – selling / refinancing your rental property, buying and selling stocks, and shares of companies are examples here. 

Based on my experience and education here are some important things to consider. 

Cashflow Investments…

– consistently put money in your pocket 

– return on the investment is calculated and predictable 

– are something we have a level of control over

– usually are less risky and are more secured 

– can be thought of as a “buy, hold and predict” investment 

Capital Gain Investments…

– are dependant on time to be fulfilled 

– have a longer time frame to be exercised 

– are often used with retirement in mind 

– can be thought of as “buy, hold and pray investments” (buy them, hold them and pray that they turn out in your favour over time) 

– we don’t have a lot of control over the result of the investment 

– can’t be easily measured or predicted 

Some key thoughts to remember…

Capital Gain investments don’t solve short term Cashflow problems. 

The quicker you can have income (cashflow) from your investments exceed your living expenses the faster you will reach financial freedom and can quit your JOB!!! 

In my opinion, I would encourage you to invest in Cashflow Investments first in order to acquire Capital Gain Investments down the road. Ideally, it’s best to have a mixture of both types of investments but my focus is always prioritized on the Cashflow I can create. 

I would much rather be a Cashflow Millionaire than Capital Gain Millionaire. 

Please reach out with any questions or comments. I would be glad to help guide you through some of these investment choices that best suit your goals and expectations.

Kind Regards,

John C. Heeney, CEO Glenroe Lending

Glenroe Farms Limited ( Private Lending )

We build LEGACY to create TRANQUILITY

john@glenroelending.ca

519 808 7370