Capital Gains vs Cash Flow?

Are you investing for capital gains or for cash flow?

A lot of people only invest for capital gains mostly because that is all that they are aware of. Investing for capital gains is similar to gambling in that an assets will appreciate and you will be able to capitalize on the gains. The problem is that every assets value fluctuates biased on the the the markets demand. As many want to be investors as well as some long time investors found out when the housing bubble burst, that values are not biased on facts, but biased on others investing for capital gains. When the momentum stops, a lot of people loss.

Investing for cash flow means that you value an asset biased on it's ability to generate cash, every month, every year. People that invest for cash flow, buy assets with the understanding that it will make them money now, and then if they ever sell it, maybe it will be worth more than. Warren Buffet said that his ideal time to hold a stock is forever. Why would you sell an asset that makes you money every month?

When you a investing you money, your time and your energy, look at the cash flow of what you are investing in. If you do you job the right way the first time, you can get paid forever, and over and over. If all you ever invest only for capital gains, when you do your job once, you only get paid once. Whether it is a business, real estate or the the stock market, look for cash flow first and capital gains second and get your self out of the rat race.