=> Your Net Cash Flow

By Dick Joubert

"What's your net cash flow?" my friend Erich asked me one day.

I was recently graduated, got a great job and had a terrific salary. I was feeling pretty OK about my financial position for a 23 year old guy.

"Great!" I replied.

"But you're not answering the question" Erich said.

"What's your NET cash flow?"

Now I realized that I didn't understand the question. So, without trying to show I did not understand, I asked

"OK, tell me... what do you really mean?"

"Many people think that earning a big salary is the same as having a big remaining cash flow."

That's when I realized I've been totally mistaken.

Net cash flow is simply money left over after everything possible have been deducted or spent.

Let's look at our Cashflow Pipe to understand this concept.


Your net or disposable cash flow is F(ree)... surplus or remaining money. It's not money for CD's, MP3 players and other luxuries.

From our diagram...

Your net cash flow (F) = salary (W) + passive income (P) - all expenses (E)

I can already hear you ask...

"But why do I want Free money?"

To build assets. To use your disposable cash flow to earn again and again.
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Money tip
The fastest way to create Free money - take an amount from your paycheck the moment it's paid... before spending a penny. Then deposit this amount in a separate account as a nest egg for building assets.

Spend only the remaining part of your paycheck.

More about your net cash flow...

=> Free Cashflow Definition

By Dick Joubert

When we're talking about a free cashflow definition we're NOT talking about a totally new thing. We're still talking about cashflow. But just a specific part thereof.

Let's start off by looking at our Cashflow Pipe.


We've already said that cashflow is the money flowing into and out of an account. That's true whether we're talking about you or your business.

But for most of us money flowing into our accounts come from paycheck income -- W(ork) money!

But where most of us royally mess up is when we believe all incoming money is there to spend as we like. So what you're effectively doing is to increase E(xpenses) until it equals W(ork) money.


Although you may think so, the truth is... that's not true! And that's what our free cashflow definition refers to.
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How to create free cashflow
Let's just assume you earn US$10000 per month -- W(ork) money flows into your account.

Now, "You" control how much money E(xpenses) take from your account.

These E(xpenses) include many different compulsory rates, taxes and levies. And then there's also many other day-to-day expenses and luxuries taking money from your account.

The sad thing is...

You regularly allow Expenses to take every single penny from our account... leaving NO Free money!

You literally take $10000 (or sometimes even more) from your account.
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Here's the important part...

Free cashflow can only be created by controlling Expenses, and...

Keep Expenses less than amount of money in your account!

The money that remains in your account is the F(ree) cashflow bit. It's that part you can truly use to create a bigger cashflow stream into your account.

But now you may be asking why this free cashflow bit is so important. Click here to get the answer or send for the best cure for a permanent money stream by clicking here.

Once you've created Free money the biggest skill is then to know how to reuse it to increase the cashflow into your pipe. Click here to learn about some of the assets that continues to put money in your pocket - regardless of whether you work or not.

Sourec: http://www.cashflowclever.com/freecashflowdefinition.html

=> Short-and-to-the-Point Cashflow Definitions & Business Glossary

By Dick Joubert

Many a business glossary and cash flow definitions are made too technical and difficult... leaving you even more confused and none the wiser!

So, I've put together this short-and-to-the-point word list. None of them are high-tech. All of them are practical. And all of them somehow refer to our Cashflow Pipe which is aimed at understanding why building a permanent, nonstop income stream IS a reality.

Here's our simplified Cashflow Pipe to explain why this is possible.


For more on the Cashflow Pipe and how it applies to building an income stream, click here.

Now, read more about the everyday terms, lingo and money flow jargon...

Cash flow

Cash cow

Free cash flow

Residual income

Discretionary cash flow

Passive income

Cashflow diagram

Earned income

Asset

Your net cash flow

Residual income sources

Source : http://www.cashflowclever.com/businessglossary.html

=> Discretionary Cash Flow

By Dick Joubert

Definition of Discretionary Cash Flow

In it's simplest form, discretionary cash flow - often also called free cashflow - is money over which you have complete control. You can decide where and how to use it.

Rather than giving you the same information as in the free cashflow definition, let's look at the principles of increasing your discretionary cash flow.

Our Cashflow Pipe diagram shows that discretionary cash (or free money) is your total income (passive income plus salary) minus all your expenses.

Definition of Discretionary Cash Flow Applications

3 Ways to increase discretionary cash flow

Increase your pay check

Most of us, by instinct, see only one answer when looking for ways to increase our discretionary money. That's increasing our income. In fact, it's become almost an automatic reaction to take on a second part time job, or to put in more hours at your current job.

Although this option works, it's also the most difficult way of doing. It also keeps you trapped in the time-for-money trap.

Fortunately there are easier ways of getting the same result.

Reduce expenses

If you've been working for a few years chances are that you're earning more than when you started. Yet, you still have too little or no free money.

It's a natural thing for people to increase expenses as their incomes increase. We simply buy more luxuries.

If you closely look at your expenses, there are ones that you can immediately cut back. Problem is, you and I tend to make emotional decisions when it comes to money. And somehow we always find excuses why it can't be done.

You may not like what I'm about to suggest, but ask a friend or family what expenses you can cut back. And then do it!

Oftentimes an outsider is the best person to make a totally objective decision.

The quickest way to increase discretionary cash flow is by reducing expenses...

that applies to you and me as well as in business.

Increase passive income

This option is the most difficult one to do. But if you can keep your expenses under control, it' surely the most rewarding. And in my opinion, the best route.

Only problem is, increasing passive income isn't a short term solution. It takes time to see significant results. But it also holds many other major long-term investment advantages.

Increasing passive income is THE option if you plan on building and increasing your free cashflow and wealth.
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Once you've increased your discretionary cash flow, the real trick is to reuse it to further increase your income. The ultimate goal is to build a permanent income stream that keeps on flowing into your account - regardless of whether you work or not.

I strongly suggest you click here for a few tips, tricks and strategies to build your permanent income stream.

Source: http://www.cashflowclever.com/definitionofdiscretionarycashflow.html

=> Cash Cow Definition

By Dick Joubert

No cash cow definition refers to cows! It's simply a figure of speech.
What we're talking about is an asset that consistently churns out money with very limited... or preferably no effort from you.

It's almost like having a goose that lays golden eggs. And it gives you a constant cashflow stream.

Read more about getting a constant money stream into your account by clicking here

What's great about finding and having a cash cow is that it's often reasonably cheap to buy. And requires very time and effort to maintain. Click here to read more about the 3 things you need to create a residual income.
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Importance of cash cows
But the most important thing about cash cows is... they steadily...

Put money in your pockets for years to come

In short...

Cash cows are assets giving you a P money stream... and you almost do NO work to get it!

Now this is exactly where the real strength of a cash cow asset lies. And why it's so important to have at least one!

The clever person knows that you don't just spend the "golden eggs" on luxury items. You rather use them to find more cash cows!

The truth is, finding a cash cow is rare and doesn't happen every day.
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OK, you've read my cash cow definition.

So let me ask you... suppose you find an asset, how do you know it's cash cow? Click here for the answer

Cash Cow Definition >> How to Start Earning Residual Income

You and I are conditioned to believe that the returns on assets are typically 3-5%. What's more, we "think" that 15-20% returns are actually quite great.

But what do you say if you know there are assets "out there" giving returns of 100% and more... like clockwork! Some of you will immediately say my calculations are wrong.

Not so!

Even well-known authors like Burke Hedges spotted and commented on these "cash cow" opportunities for you and me. Click here to learn what type of asset he was referring to and how you can also get such a "cash cow."

Source : http://www.cashflowclever.com/cashcowdefinition.html

=> A Useful CashFlow Diagram

By Dick Joubert

I've often used my cashflow diagram to explain money concepts to my children and friends. This diagram originated from many simplified sketches and drawings I've made trying to explain the somehow difficult cashflow concepts.

Cashflow Diagram


Imagine a long, cylindrical pipe. Now imagine that our pipe moves money to and from your account.

By the way, what's great about this sketch is it can be used for your personal account or that of a business. Now let's look at the essential parts of our diagram and how it applies to your personal account.

Money inflow
Money can only flow to your account on two ways. There's no other option to legally get money into your account. You either Work for it, or you earn it by NOT working for it... thus Passive income.

Working...

The most common inflow... is when you WORK for it. For most people that means earning a salary. Click here to learn more about earned income.

Of course it's also possible that you're self employed and still earning an income by "working" for it. But the bottom line is, you're still working for your money.
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What's the easiest way to know whether you're "working" for you money?

Ask yourself this... if I stop doing what I'm doing, does my income stop. If the answer is "yes", well then you're definitely "working" for your money. Click here to learn about the common cashflow pipe for "working" people.
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Passive income...

In it's simplest form passive income means getting money while you sleep or do nothing. The most common methods are from...

* interest on savings
* rent from properties
* dividends on shares
* royalties and patents, and...
* various business incomes

Click here to learn more about passive income and residual income.
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"You" distributor
The next step in our cashflow diagram is where passive and work incomes both flow into the "You" distributor (Y).

The "you" distributor is your account. But I've termed it the "You" distributor since you completely control how money in your account is distributed. Click here to learn how the "You" distributor can increase Free money.
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Money outflow
Expenses...

Every single penny you spend to pay bills, make loan and mortgage payments, for day-to-day necessities or even personal luxuries are Expenses... or E for short.

The important thing to realize with money flowing out of our cashflow diagram through E is... this money is lost forever. It's wasted and cannot be used to increase your current money inflow. Click here to discover how much you can really win by limiting E money wastage.

Free...

In our cashflow diagram Free (F) is money available to you for reuse. You can use it to increase cashflow into your account. Click here to learn what's needed to increase money flow to your account.

Remember...

Y(ou) control the amount of F(ree) money!
But here's the important thing... you can also waste F money by spending it! F money then becomes E money. You do this by opting to spend F money on luxuries (E) rather than reuse it to increase your money inflow -- a classical mistake!

Click here to learn more about Free money

Click here to go from this cashflow diagram overview to increasing money flow in your cashflow pipe

Source : http://www.cashflowclever.com/cashflowdiagram.html

=> Residual Income Sources

By Dick Joubert

"Build many residual income sources."
That's probably the very best advice I got from one of my father's wealthy friends when I was 15.

At that time I didn't really know what he was talking about. But having studied and discussed making money with so many wealthy people, I've come to realize 2 important things:

* Most prosperous people have more than one residual income stream. Many have 5 or more money streams.

* Passive income is an extremely powerful tool to become truly wealthy.
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Let's look at a few things that'll work for you even if you're on holiday or sleeping.

* Savings

* Stocks & Bonds

* Certificates of deposit

* Shares

* Mutual funds

* Rental property

* Patents

* Royalties (videos, games, books, ebooks, software, films)

* Commissions

* Businesses

* Franchising fees

* Internet businesses

* Any other ongoing income where you work once and gets paid again and again.

Source : http://www.cashflowclever.com/residualincomesources.html