True Wealth comes from Cash Flow

By John Burley

A lot of books, tapes and seminars are filled with theories on investing. The problem with people teaching theories is that theories often do not work.

I do not teach theories.

Everything in Money Secrets of the Rich, and everything that I discuss at my seminars is actual data from actual transactions completed by my students or myself. No theory. Theory is for school, and as we all know theory often does not work in the real world. I only teach factual investment techniques that are being done in the here and now.

Cash Flow Positive Real Estate
Whilst I practise a variety of investment techniques, my favourite by a long shot is real estate, and in particular what I refer to as Cash Flow real estate. This is my niche.

The Cash Flow strategy works like this: you acquire a property, then resell it with vendor financing to a new buyer (obviously, you sell the property for more than you paid for it).

The buyer makes one monthly mortgage payment to the seller. The buyer owns the home. They take care of it. They do the maintenance. They pay the rates and insurance.

The seller continues to pay on any underlying loans and makes a profit by maintaining a difference between the underlying loan payment and the new loan payment. This profit is known as the Spread. In other words, all you do is collect the money and count the profits. You are not a landlord. You are a private bank!

The Cash Flow real estate strategy provides the opportunity to develop a substantial monthly income without the burden of property management. It also frees you from the headaches that accompany property ownership. You can control the properties, for better cash flow, and re-sell the investment risks and maintenance responsibilities for the property to the new buyers.

Cash Flow Appeal
The reason I love the Cash Flow strategy so much is that it is quick and easy to execute, relatively trouble-free and provides substantial long-term passive income. The Cash Flow strategy best takes care of one of the biggest problems with money: our tendency to spend it.

For most people, the tendency to spend surplus cash is the major drawback with other positively-geared real estate investment strategies (I don’t ever do negative gearing, by the way). You have to keep going and repeating the transactions over and over again, because invariably you will spend the proceeds of each transaction on basic and extravagant living.

So Let’s Get Wealthy!
Do enough deals and eventually the cash flow from your efforts will provide that passive income that you wanted. You will have produced the cash flow to sustain yourself long term. You will have the freedom to do what you want to do, when you want to do it, where you want to do it, with whom you want to do it, without any regard to the cost. That is true financial independence.

Cash Flow, not cash is the best source of wealth creation. When you are able to retain the Cash Flow from your deals, then you are well on your way to becoming wealthy.

I recommend that you start now. Take a few minutes to write down what it is that you are looking for. What do you need? What do you want? The answers to these questions will tell you what your investment strategy should be.