MONETARY STREAM - WHAT IS IT?

Cash flow is the difference between your assets and liabilities, between what you spend and what comes to you.

If you imagine a cup, then money flows into it, they flow through the assets.

Assets bring us money. The asset can be our active work, for example, work. We, ourselves, as an employee, are an asset and bring money. It could be real estate, it could be a deposit, a business that we created, etc. All this is what flows into our cup.

In parallel, something leaks out of the bowl, that is, we spend something permanently - this is the passive. In a word, liabilities are what takes money from us. For example, the passive is our apartment, for which we constantly pay taxes, monthly payments, etc. Passive is a machine, passive is a dacha, for which we pay monthly, it's something else that pulls out money from us.

Cash flow can be positive when it flows into us, more than flows away and we have the opportunity to invest, create reserves, invest. It can be zero when we live in zero, that is, how much we earn, we spend so much, but at least not more. And the most unpleasant situation, in which, unfortunately, there are about 2/3 of the country's population is when the cash flow is negative, ie when we begin to dig deeper and deeper into debt. This difference is very important to understand.

To acquire financial freedom, it is necessary to minimize liabilities, that is, to close loans, not to take out new loans of bad ones and to maximize assets, i.e. to save part of the money, to let them into the business, so that they make more and more money and accumulate positive debts that make us new money.