Myles of Investments

Read about my successes and failures. Learn from my experiences and gain insight without losing any cash!!!

Lesson: Catching a Falling Knife
Lesson: Currency Exchange
Lesson: Mutual Fund
Lesson: Paid to Wait
Lesson: Pricing in a Downturn

This is where you’ll find find my Blog. I will comment on the latest news relating to investing, real estate, and the financial markets.

Buy Cashflow Cheap!

The secret for you to buy cashflow cheap is simple – pay debt! You would be amazed if you look at how much cashflow all types of consumer debt costs per month. If you have two cars that cost $600 each, you could own a $1,200 mortgage on another property that makes you money! Debt payment is a 100% guaranteed investment that can give you huge gains in your monthly cashflow. I don’t know of many ways to get a guaranteed investment with big returns, but if you pay off a credit card that is what you are achieving.

Let’s continue with an example: let’s say you use a line of credit to buy new furniture that costs $5,000. Even if you paid the minimum payment plus whatever extra you have that month, lets say $100, you would immediately see the line of credit payment drop by $3 per month.

Can’t buy cashflow cheap? Watch how! Keep focusing on the pennies, and the dollars will follow.

The line of credit has $5000.
The interest rate is 7%.
The minimum monthly payment is 3% of the balance.

This means that each month you’ll have to pay about $150 per month. If you were to pay an extra $100 one month, you would save $3 per month for the rest of your life.

Sounds like pennies doesn’t it? But it isn’t. Your return on cashflow here is huge. In this example, you’ve earned a 36% return on cashflow, since your $3 savings is multiplied by twelve months. Where can you find an investment that good?

Here’s a personal example:
I bought a condo that needed many repairs, as it would not sell unless I fixed it up. I received a gift of $2,000. I could have done a lot with that money – and I did, but not what you think! I paid this amount off my line of credit and as a result it bought me $60 per month for the rest of my life. Every month after that my wife and I could go out for a $60 night out and feel a bit of relaxation. It might have been fun to go on a spending spree, but now that money is working for us every month. We can rest easier knowing that debt is gone for good, and we are $60 richer each month. The lesson here is to stay focused and search the couch for loose change to buy cashflow cheap!