IF YOU INVEST FOR ANY REASON APART FROM THIS, THEN YOU ARE DOING IT WRONG

Anyone who sets out to invest in anything chases either of these two things.?

One is Cash flow and the other one Capital gains.?

This is not something that started recently.

It has been practiced since time immemorial.?

Let us now dig deeper into each of these and understand how they are achieved by the modern day investor...

1. Cash Flow

This is a continuous income that you receive from a one-time investment.?

You cash in weekly, monthly or even annually.?

The time taken to receive cash flow from an investment purely depends on the type of investment.?

Some pay monthly while others pay annually.

2. Capital Gains

Capital gains is obtained when you sell an investment that you initially bought.?

The frequency of the capital gains depends on your ability to purchase and sell off an asset at a profit, like the flipping of real estate.

For example, you can purchase 5 acres of land at 500,000 each.?

When the value of each parcel rises to 650,000, the initial investment will have made a profit of 150,000 for each parcel hence the capital gains.

If the value of each parcel drops to 400,000, you make a loss of 100,000 on each parcel hence capital loss.?

While the aim of cash flow is to buy and hold position on an asset, capital gains aim to buy and sell the asset at a profit.