For What should you Invest? For a Capital Gain or a Cash flow? Well, first of all let us understand the meaning of this question. Well, most of the people invest for Capital Gains. Investing for Capital Gains means you invest in some assets and hope to go its price go up. It means that “Buying low & Selling high Strategy.”
Capital Gain means the difference of price of Asset at one time and the other. Say for Example, When you invest in stock market for hoping it going up, you are investing for Capital Gain. When you invest in Mutual Funds or Real estate piece for hoping its price going up, you are investing for Capital Gains.
90% people around this world invest for Capital Gains because it is easy and in the up economy, it makes huge profits. But when the economy is down, this strategy don’t work. So the ideal strategy for investment is Invest for Cash flow.
Say for Example, When you Invest in Real Estate only after confirming that, it will provide you a positive Income after deducting all the expenses, it means you are investing for Cash flow. When you invest in any Business for regular Income, it means that you are investing for Cash flow. And Sophisticated Investors always invest for Cash flow and that’s why they are least bother about market fluctuations.
Of course, it is really easy and profitable to invest for Capital Gain. But not in all the economic cycle, this strategy is beneficial for you. Intelligent Investors only invest in those assets which provide cash flow (Steady Passive Income) to him / her. And that’s why when the market sinks, they don’t have to worry about it. Because their all the Investments are Cashflow (Income) providing investments so they don’t feel discomfort during the down market.
So always Invest for Cash flow like intelligent investors. Never Invest only for Capital Gains.
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