Treat Cash Flow Like Royalty

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Treat Cash Flow Like Royalty

Make cash flow your personal monarch. It is essential for a prosperous future. Because a key part of any wealth strategy involves using your money to make more money.

Cash flow management is central to financial planning. Think about how you lived last month. Calculate your personal cash flow by adding up your income. Then, subtract all your expenses.

Did you spend more than you made? This is negative cash flow. It means you are going to waste money on hefty credit card interest or loan charges. You also don’t have extra funds available for investing in your future.

This month, calculate your cash flow by tracking where your paycheque goes. Create a clear, detailed budget. Learn the difference between fixed expenses and variable expenses.

Add up all your variable, or discretionary, spending. It will reveal where your salary is going. You can spot ways to improve your cash flow. For example, spend a bit less on having fun and use the savings to enhance your future success.

Manage your monthly income

Prioritize paying off your bills each month. Identify inexpensive ways to enjoy life. Fun that also protects your cash flow.

If this won’t slay your bills, consider reducing your fixed expenses. Such as moving to a less expensive place until your income improves. You could take in a renter. Or switch to a more budget friendly car.

Another option is having a side hustle. A secondary job that brings in extra cash. This will provide money for your wealth creation plans. You could start a business. Enjoy the satisfaction of using your talents for your own financial benefit.

Create passive revenue

Invest in an asset that gives you passive income. A revenue stream that takes only minimal supervision to keep it going. It will enhance your cash flow and the options are endless.

You can invest in bonds or dividend-paying stocks. Buy rental property. Create an online course showcasing your skills. Write and market an e-book.

Passive income remains independent of your day job. It will entail some up-front effort and a few ongoing tasks, but multiple revenue streams are a time-tested way to build wealth.

Having passive income leads to financial security. Should anything happen with your day job, you will have alternate income to rely on. There’s money coming into your bank account without putting in a lot of active effort.

How to be your own banker

A new service called Manulife One combines together your banking, mortgage and line of credit into one account. All your monthly cash flow automatically goes into reducing your debt. This saves you time and hassles. But you can still conveniently access your cash to pay bills and cover daily, or unexpected, expenses.

It is secured against your home, so you don’t need to reapply to borrow money. It features a variable daily interest rate, but you can use fixed rate sub accounts to lock in a portion of your mortgage. This is especially valuable if you think the interest rates are going up.

Create an aggressive repayment plan focused on high interest debt. Use your monthly cash flow to automatically save a lot of interest with each paycheque.

You can adjust your payment schedule to accommodate changes in your future finances. You can even track interest costs separately. For example, if you’ve loaned money to a family member.

Make positive cash flow your priority. Experience the power and satisfaction of being in control of your money. Your Carte Financial Advisor can help you develop a plan to increase your cash flow and create more wealth.

15 thoughts on “Treat Cash Flow Like Royalty

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