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You are here: Home / Finance / Your Ultimate Guide to Cash Flow Investments and How to Get Started
Your Ultimate Guide to Cash Flow Investments and How to Get Started

Your Ultimate Guide to Cash Flow Investments and How to Get Started

August 28, 2022 By Cade Hildreth Leave a Comment

If you’re like most Americans, the previous year was probably hard—as COVID-19 has created rolling shut-downs since March 2020.

Unemployment reached staggering levels in the midst of the pandemic, and while the situation has improved to some extent, millions of people are still struggling to find their new normal.

In this article, we’re going to take a look at cash flow investments and how they can be a great way for people to make money that can supplement their active (earned) income.

We’re not going to get too technical, but we promise that by the end of this guide, you’ll have the knowledge you need to set yourself up for a big payoff down the road.

Keep reading to learn all about the various types of cash flow investments.

What Are Cash Flow Investments?

As its name implies, cash flow refers to the amount of money that you see coming into your bank account. Businesses use cash flow to measure profit, but it applies to individual finances as well.

Cash flow is simply a measure of how much money there is (the “cash”) and the the direction it is flowing (the “flow”). Put simply, is the money flowing into your account? Or, leaving it?

Thus, cash flow investments are investments that pay you distributions at a regular interval, usually monthly or quarterly. Non-cash flow investments, like non-dividend stocks for example, can still appreciate in price over time—which is why investors buy them.

However, cash flow investments have the distinct advantage that they can grow in value over time and will pay you at regular intervals. Therefore, the main benefit of cash flow investments in comparison to other investments is that they will help you to cover your day-to-day expenses.

Remember that investments are usually a form of passive income. That means that in most cases, you won’t have to put in labor to turn a profit. That is what makes them amazing!

Common Types of Investment Income

There are dozens of different ways to generate income through investments. Some of the most common cash flows from investing activities include the following:

Dividend Income

If you’ve ever invested in the stock market, you are probably familiar with the concept of dividend paying stock.

When you buy a certain percentage of a public company on the stock market, you become a shareholder. To encourage partial owners to keep investing and to drive up the value of their share price, companies sometimes offer direct payments, known as dividends.

Dividends can give you the capital you need to invest more and ultimately make more money.

Rental Income

Cash flow real estate investing is another one of the most popular ways for people to generate long-term profit. In fact, with the right tactics and setup, you can generate a lifetime of cash flow through real estate investing alone.

However, it does take some more effort on your behalf to become a real estate investor. It requires you to be comfortable with investing large amounts of time and money. Luckily, the payoff can be worth it.

Many people use real estate as a form of active income, instead of a passive one. It can be hard to juggle being a landlord and maintaining properties if you also have to work a 9-5 job.

Rental income doesn’t have to come from real estate though. You could also be paid rental income for renting out storage space, parking space, or a valuable business asset (like a piece of machinery), for example.

Similarly, if you’re even gone kayaking or boating and you paid an hourly rate to rent the equipment, you paid the other person or company rental income.

Interest Income

Next, we have interest income. When you lend your money to someone else, you can make a profit off of it in the form of interest.

Before you put your money in any bank, credit union, or other financial institution, it’s worth researching what their interest rate is. You can earn interest income from high-yield savings account, certificates of deposit (CDs), all types of bonds, peer-to-peer lending, high yield crypto accounts, and so much more.

Anytime you lend out money and get paid a premium for doing so, you have earned interest income.

Common Types of Cash flow Investments

To achieve your investment goals, there are several concrete examples of the types of investments that you can use.

1. Bank Accounts

As mentioned, you can earn investments by simply putting your money into the right savings accounts. Keep in mind that the interest rates paid on these account are often disappointingly low (often under 1%).

The same goes for money market accounts and certificates of deposit.

Do your research to ensure that you get the interest rate you want and that you can start growing the profit you need.

2. Bonds

Bonds are another interesting form of investment you can look into. As with other investments, you can choose a riskier bond for a potentially high payoff or a safer option with limited growth.

The federal government backs some types of bonds while corporations issue others. Corporate bonds are usually the riskier ones since there’s a chance that the business will go under.

3. Dividend Stocks

The stock market is always a place where you can invest your money. There’s also a large amount of variety—certain stocks are safer options, while other ones are high risk yet high reward.

We talked above about how dividend payments can further increase your profits. Like the stock market itself, they can either be risky or safe, depending on the company in question.

Some companies take pride in offering lucrative dividends that get bigger each year. Companies that offer these types of distributions include:

  • Universal Corp – 5.72% annual dividend
  • Altria Group Inc. – 7.02% annual dividend
  • Iron Mountain Inc. – 5.63% annual dividend
  • Edison International – 4.65% annual dividend

Remember that dividends can change at any point in time. They also reflect the success of the company—if a company has a good year, they might increase. During periods of instability, however, they won’t be as high.

4. Peer-to-Peer Lending

When most people need to borrow money, they head to a bank or some other brick and mortar financial institution. But not everyone wants to do that. Some people prefer peer-to-peer lending.

Also known as crowdlending, peer-to-peer lending is when an online platform connects people willing to loan their money to people that need it.

As a lender, you determine the risk you’re willing to take, as well as whether it’s worth lending your money to a particular business or individual. In the right circumstances, you can see serious returns on your investments.

5. Rental Real Estate

If you’re thinking about investing in real estate, your goal should be to achieve a positive cash flow. You don’t want to continuously have to invest your own money into maintaining your properties—they should pay for themselves.

One thing that many people do is buy property when they’re young. Once they can pay off their mortgage, they can then profit from the money that they generate (and use it for the occasional maintenance or upkeep project).

This allows many people to have a comfortable and worry-free retirement.

If you’re most ambitious, you’ll also was to collect rental properties. These can be single family homes, which are a type of residential investment. If you’re a go-getter, you can also buy commercial assets, such as apartment complexes, mobile home parks, storage facilities, mineral or timber rich land, office space, industrial facilities, and so much more.

6. Crypto Exchanges

Finally, many crypto exchanges will pay you a yield (interest) to store your cryptocurrencies on their platform. Examples of exchanges that do this include Gemini and Midas Investments for example.

These exchanges typically pay lower yields (usually 3-5%) on cryptocurrencies, such as Bitcoin and Ethereum, while paying higher rates (often 8-10%) on stablecoins, such as Tether or USDC, for example.

The methods used by exchanges to produce interest income vary, but their approaches can include lending your assets out to others, lending liquidity to other exchanges, and staking, among other approaches.

With this said, you’ll want to be quite careful with this approach, because two major crypto exchanges  (Voyager and Celsius) recently filed for bankruptcy, freezing customer assets while the proceedings are underway.

Enjoy Cash Flow Investments for Life

Remember that in the world of cash flow investments, it can take a bit of risk to get results. If that makes you worried, then stick to safer, more stable investments.

Are you looking for more life-changing advice? If so, dig into our other financial articles here.

Ready to stay in touch? Join nearly two million other readers who are learning from Cade.
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“As an LGBTQ+ entrepreneur, real estate investor, former USA Rugby Player, and fitness fanatic, I’ll teach you what your parents and teachers should’ve taught you, but didn’t know themselves.” -Cade Hildreth

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Or, listen to Cade’s articles on the go as a Podcast.

Because it’s the New Year, let’s talk about ch Because it’s the New Year, let’s talk about change...

For a long time, I’ve thought about top surgery. I remember when I was 6 or 7 years old when I wanted to run around outside on a hot, sunny day with my shirt off…and I first saw my parents… hesitate. Ughh. 

It wasn’t their fault but I still remember that heart wrenching feeling. To their credit, they ultimately said, “Ok, go do it!” While I did “do it”, I remember the feeling of shame that crept in.

Over the years, being in affirming sporting/rugby circles helped suppress the urge to get top surgery, but it never quite “stayed down.”

So last summer I got keyhole #topsurgery. I’ll talk about recovery in another post because it was definitely weird to not strength train for months.

But in THIS post, I want to share two things:

1. I am SO grateful to my wife Erin for being the supportive and growth oriented partner that she is. 🥰🙏❤️ 

She is now following her call to get a divinity degree and she’s already working in ministry as a Pastor in Training at an incredible, inclusive Presbyterian church here in Virginia. I am grateful to her for supporting me as I become more and more of who I am—and I’m enjoying watching her do the same! Love you, babe!

2. Second, I’m grateful to get to share who I am with my family. This summer we took a trip to Madden’s resort in MN to celebrate my parent’s 50th wedding anniversary. (It was actually their 52nd, because we had to postpone it twice due to Covid.)

I was nervous to be in the pools and lakes around them, but I could feel it was my only choice because I knew I wanted them to “know me”. And, how could that happen if I “hid me”?

Ultimately, I have to tell you…it was freeing to be me, as I am, who I am. 

I had the BEST time splashing around and biking and goofing around with my wife, niece, nephew, & sister. 🌊🏖🐟

So, I suppose, this is a gratitude post to thank those who have supported me over the years as I become more and more of who I am. 

Top of that list is my wife, Erin, but there are countless others. ❤️

If you’re reading this, thank YOU for being one of those people in my life too. I am deeply grateful. 🥹
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#lgbtqfamily #nonbinary
How to set a boundary? 🤔 . . . . #lgbtqia #lgb How to set a boundary? 🤔 
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#lgbtqia #lgbtqcommunity #emotionalhealth
What do you do if you’re telling a past story ab What do you do if you’re telling a past story about someone who has transitioned? 🤔 Share a 💯 if you agree ➡️🏳️‍⚧️🏳️‍🌈
7 things I got clarity on in 2022: 1. Good and b 7 things I got clarity on in 2022: 

1. Good and bad are labels. All things are experiences. 

2. Maturity is taking full responsibility for oneself. 

3. Having a loving, conscious relationship with myself is a core value. 

4. Emotions do not mean that anything has to be done. 

5. When I am in congruence with what I want, I have it. 

6. I have permission from myself to stop doing anything that doesn’t lead to my peace and empowerment. 

7. Stepping toward emotions and being able to feel them is a superpower. It determines the quality of my life. 

(Are there any above that you’d like me to further explain?)
 
Most importantly, which # above resonates with you? ⬆️

Happy New Year, y’all! 🎊🥳
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#lgbtqcommunity #lgbtqiaplus #lgbtsupport #nonbinary #trans #selfgrowth
Interview with Jenny Nguyen, Founder of the Sports Interview with Jenny Nguyen, Founder of the Sports Bra—The World's 1st Bar to Only Play Women's Sports - shorturl.at/doGHZ

I'm excited to introduce you to today's #podcast guest, Jenny Nguyen, who is a professional chef, elite athlete, and entrepreneur.

I invited Jenny onto the podcast because she has done something extraordinary that is long overdue: She has opened up a sports bar that exclusively plays women's sports!

Despite extensive research, Jenny hasn't found another sports bar worldwide that ONLY plays women’s sports.

Given that it's nearly 2023, this is mind-blowing. As a lifelong athlete, I find her vision compelling and inspiring.

Aptly called the "The Sports Bra", the venue is putting Jenny's culinary skills on display alongside women's sports worldwide.

The Sports Bar has taken its mission a even further by partnering with and elevating other local, women-owned businesses.

Specifically, it:

1. Sources its grass-fed beef from @CarmanRanch, an ranch run by Cory Carman, a third gen rancher out of Wallowa, Oregon).

2. Sources its alcohol from Freeland Spirits, an all-women owned and operated distillery out of NW Portland.

3. Has furniture built by @girlsbuild_org, a non-profit organization headed by @ktmhughes in Portland, OR, that teaches carpentry and construction skills to young girls as a path to empowerment.

Since opening the Sports Bra this April, people have come from ALL over the U.S. and the world to experience it—including many professional female athletes.

To learn more about Jenny as she makes history, features women's sports, and elevates women-run businesses, listen to the episode here:

shorturl.at/doGHZ

Or, you can check out the Sports Bra at:

@thesportsbrapdx
TheSportsBraPDX.com/

Have you heard of the Sports Bra or been out to experience it in person?

#lgbtqiaplus #womenownedbusiness #lgbgtqia #lgbtqcommunity #womenssports #womeninsport
Over this recent holiday stretch, we… - enjoye Over this recent holiday stretch, we… 

- enjoyed some quiet time at home
- got a sauna delivered (but not yet installed)
- decorated for the holidays
- baked a bunch
- visited our favorite farm
- did some sight seeing
- and perhaps, most importantly, survived the cold snap along with our feather friends (who lived in the garage for a few days so we could heat them with a space heater) 🥶🐔

How have the holidays treated you…and did you get hit by the winter storms? ❤️🎁☃️❄️
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