Pros and Cons of Investing for Cash Flow

It’s one of the more hotly contested debates there is in investing.  Income, or cash flow, vs. total return investing.

Each camp has its proponents and detractors. But the facts are that the way most investors approach investing for cash flow leaves some things to be desired.

As our good friend Jim Dahle at The White Coat Investor explains in this post, there are pluses & minuses to the income investing concept & methodology, so it’s best to go into your decision making with eyes wide open & a full understanding of the process.

The basic idea behind income investing is that you only spend the income from your investments. 

What Is Income Investing?

#1 High Yield Does Not Equal High Return The first problem is that many income investors do not realize that a high yield does not necessarily equal a high return. 

5 Other Problems Income Investors Need to Consider

While a mortgage loan has significant benefits over a margin loan, there are many different ways to leverage up your stock market investment.

#2 You Can Leverage Other Investments

I’m not sure how to tactfully put this, but I’ve been surprised by the lack of basic knowledge of the tax code & the principles of investing among even relatively sophisticated real estate investors.

#3 Lack of Basic Investing Knowledge

SWIPE UP NOW TO READ MORE

How This Financial Advisor Makes Big Money with Raw Land

MORE STORIES

The Broken Clock