Why I’m Calling Bullshit on Cash is King
As our local economy and the global economy begins to enter a severe downturn, I’ve been hearing the same old line getting touted around – ‘Cash is King’. So as we undeniably fall into a recession, anyone with substantial savings is feeling pretty good right about now. But let me tell you what makes me feel good: It’s having investments that spin out income every month, quarter or year.
Many years ago, circa 1998, I sold the home that I had loved and lived in. It made what many at that time would have called a very good profit, especially as I was 23. I put that money in my bank account. I did not reinvest that particular sum of money.
In the month and years that followed, that money deteriorated. I never spent frivolously; I’ve always been careful about where money went, no matter how much I had. Regardless, I watched on as the sum subtracted by way of simply – living. The lesson for me was – if you don’t spend your money on one thing you will soon spend it on another. I count myself very fortunate to have learnt that lesson at a young age.
From then on, I learned to make sure I put any cash to work very quickly. I learnt that money needs to be moved so it can multiply. If you can’t reinvest your money into an income-producing asset where it can multiply, then it will subtract over time. When money sits still, it loses value as everything else around it becomes more expensive.
At no time does it sit more still than when it’s sitting in a bank – this is the laziest money of all.
Unfortunately, many people don’t know much about income-producing assets – investments that cash flow, not just appreciate in value but actually produce cash on a regular and reliable basis. We have been fed myths like; One is supposed to own the home one lives in, that this is an asset, an investment even! Turns out, this is so far from the truth.
In times like these, an ‘asset’ or ‘investment’ that doesn’t produce any cash flow is not an asset at all. It’s often a liability, requiring top-ups or maintenance, creating fees and providing limited access to liquidity of the supposed appreciated value.
Having cash flow is very different from having cash. Once cash is spent, it’s spent. Having cash flow means that your source of cash is recurring; it replenishes. Sitting on a pile of cash that is eroding everyday would keep me awake at night. Having multiple income streams generating cash flow is very reassuring.
It is my first-hand experience that money does nothing for you if it’s sitting around. I now know the importance of income-producing assets. Never again will I let a large sum sit in the bank, doing nothing, least of all earning an income. Once you get your head around this, you can never unlearn it. But that knowledge only hits you when you’re ready.
For you, I hope that day is today.
That’s why I’m calling bullsh!t on “Cash is King”.
It is also my first-hand experience that the best income-producing asset is a business, I have proven this time and time again as I scale businesses well beyond myself.
Owning a business and growing that business is THE best way to make money work for you. But business failure rates are high for a reason; people go in with a dream, not with a system. I can show you those systems.
If you’re still unclear about income-producing assets and how money can work for you, shoot me a message in the chat button below and I can explain.
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