If you want to build your positive cash flow so you live on less
than you earn here are a few ideas.
Just to remind you this is about living on less than you earn so
you have a surplus to invest. These living expenses include all your
consumer debt payments such as home mortgage, car loan, credit card
repayments etc.
This route takes self discipline.
The Richest Man in Babylon suggests that you simply take
10% of your of your earnings and put it away for investment. That
leaves you the other 90% to make your debt repayments, buy food and
so on.
A drastic expense cutting option is to sell a major asset that isn’t
bringing you cash flow. For example maybe you own a larger house than
you need and you can downsize. I know a few people who have done this.
Or maybe you can sell in an expensive area and move to a cheaper one.
But maybe you don’t own a house – or you don’t
want to move. And maybe the idea of selling the family home is a bit
drastic for most people. If you have too much debt you might instead
seek professional advice from a debt specialist. Often there’s
a way to restructure to your advantage.
Of course all this cost cutting is simply to get you into a better
financial position in the future – a future when you can afford
to buy what you want without incurring consumer debt.
Another strategy is to increase your income. If you already have
a job you could perhaps create another source of cash flow – like
a part time business.
Some people have tried property investment. If you go this route
then make sure to study the skills needed. The
Hybrid Real Estate Game is one way to get started on this.
In thinking of different sources of income, it’s useful to
read about Robert Kiyosaki’s cash
flow quadrant. |
