It has been a few months since I have last updated this blog. I am seeing a huge change in my life in terms of spending habits and focusing on having more positive cash flow on a monthly basis. Why is it important to have a positive cash flow at the end of the month?
Regardless of whether you are an employee or self-employed, you are already a step ahead of many other people in the world. It is a blessing to have a positive cash flow to allow you to build cash generating assets over a period of time.
Recently I have been reading blogs from private investors like dividendmantra.com who have managed to amass a 6 digit portfolio in a matter of fewer than 3 years and starting off with $5000.
He liked most of us are from the middle income group and understand the importance of cash flow. It is really just a simple formula. Spending way less than your current income.
Should You Spend Less Than You Make?
Even though it sounds simple, a lot of us do not have the patience for delayed gratification. There is a lot of temptation out there for you to part with your money.
Whether is it an overseas trip or emotional purchases for your kids, it is easy to spend but it is difficult to keep your money and let it have a chance to grow.
We are brought up in a consumption based society where we need to have big cars, and fanciful houses which to me are impractical and useless.
You are just working harder and harder for things you may not need but bowing down to social pressure. Those people that seem wealthy may even be living paycheque by paycheque while someone earning maybe 3k/mth is able to enjoy financial freedom 10 – 15 years down the road.
Recently, I have spoken to my ex-colleague who has the mentality that you need to have lots of capital to make more money. She felt that starting small, the returns are insignificant.
In fact, most private investors started small and allow their portfolios to grow and snowball over time. Of course, having a huge capital on hand would allow you to have a head start over others.
However, the most important thing is to start now and allows your assets to grow over time. Yes, the most precious asset is time. The saving of 10years pays more than saving for 40years.
The Eighth wonder of the world, the power of compounding.
Looking at my portfolio that I started building at the start of the year 2016, it had been a fun journey choosing and having a stake in good quality businesses over the world.
Changing a new job has allowed me to enjoy extra cash flow on a monthly basis so that I can put them to work immediately.
I treat every dollar as my soldier who is building a better future for me on a 24/7 basis. I am forecasting free cashflow from my online businesses and dividends income for 2022 would reach more than $4000 USD for me.
This is really amazing and I love the feeling of doing nothing but constantly receiving payouts from quality business periodically.
I am looking forward to the day that the payouts are enough to cover my monthly expenses and I know the importance of cash flow to achieve my end goal.
[Related Article: Is It Worth Being Frugal? Why Can’t I YOLO And Spend All My Money?]