Money Skill #37: Generate positive cash flow

"All progress is based upon a universal innate desire of every organism to live beyond its income." -- Edmund Burke

"Positive cash flow" means you have more money coming in than going out. Much of the "financial world" is organized so many individuals, companies, and other entities increase their debts over time. The effect of this is that the many in debt have to pay interest to the wealthy few who lend out the money. My father was a farmer with a huge overdraft. He may have farmed more for the bank than for himself. After he died and the farm was sold to pay off the overdraft very little was left.

In order to generate positive cash flow you need to produce more than you consume -- see Millionaire Report #1.

In Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor & Middle Class Don't, Robert T. Kiyosaki says, "Wealth is a person's ability to survive so many number of days forward... or if I stopped working today, how long could I survive? ...Wealth is the measure of the cash flow from the asset column compared with the expense column."

It's much easier to generate positive cash flow if you work for yourself. According to Kiyosaki, "...[M]ost people work for everyone else but themselves. They work first for the owners of the company, then for the government through taxes, and finally for the bank that owns their mortgage." He devotes a major portion of Rich Dad, Poor Dad to the generation of positive cash flow.