Capital Growth – Video

Ask yourself: What role should capital growth play in your Purposeful Plan for retirement? Here’s my take.

 

Transcript:   Hi I’m Jeff Brown, you probably know me as the “BawldGuy”. Today’s video we’re going to talk about the timing of cash flow versus the timing of capital growth. Cash flow has just gotten too much press and people tend to do what I call worshiping at the altar of cash flow. They’ve already proven, by the mere fact that they have enough cash to buy investment properties, that cash flow is not their problem. They have to stop and think: when do I want the most cash flow? Why am I investing for cash flow? For retirement! Therefore, you want to maximize that cash flow at retirement, not when you need it the least. So here’s the idea: first let’s talk about what yield is — and this is a captain obvious alert — but nobody really stops to think about it. The definition is this: yield is just a return on your capital. Your capital is a pile of gold. The man with the bigger pile gets the biggest yield in terms of dollars. The yield is the same for him; it might be 6%, but he’s making more in retirement on his income from that yield because he has three million and his next door neighbor has one million. It’s the same 6% but which income would you rather have? The one with the three million put cash flow second on his list and he grew his pile of gold. If you keep that in mind — I’m not saying to avoid cash flow, I’m not saying, God forbid, that you have negative cash flow — I’m saying make it a prudent investment. Have cash flow, but don’t drown yourself in it, you don’t need it. What you need to do is grow your investment capital; keep growing it. Time is your friend, take that time, make it a bigger friend than ever by increasing your pile of gold every year. If you adhere to that axiom and build your pile of gold and only go for the cash flow at retirement, you’ll get the maximum cash flow exactly when you want it. Join me next time for our next video thanks for coming in today.

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About BawldGuy

I'm second generation real estate, first licensed in fall of 1969. Having been mentored by several iconic brokers, I'm also CCIM trained, having completed all 200 hours back in 1980. Have successfully executed well over 200 tax deferred exchanges, many of which have been multi-state in nature. Strong points are analysis and the creation and real world application of Purposeful Plans employing several strategies synergistically. The idea is to arrive at retirement with the most after tax income possible, backed by the largest net worth.

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