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Positive Cash Flow is the Only Budget Goal

By Virgil Jones

Cash flow is the money going in and out of the till on any given day, week, month or year. Positive cash flow means that more money is going into the till in any given time period than is going out for expenses and free spending. Negative cash flow means that more is going out than is coming in.

Many people’s image of financial success is “large cash flow”. They don’t know or don’t want to know if it is positive or negative, just a long as it is large. They can put on a great show with large cash flow. They can have nights out in fancy clubs, have cool cars, have a luxurious place to live and spend money on an entourage of “hangers on”. If the “large cash flow” is positive, this can go on for ever.

However, a lot of people with “large cash flow” also have negative cash flow. Negative cash flow is a ticking financial time bomb. Negative cash flow is always supported by debt. Because of the negative cash flow, it is high cost debt which builds to make the cash flow even more negative. Sooner or later the creditors call in the loans, want their cars back and want the house. The party is over and the hangers on are all gone to look for another cash ride.

Positive cash flow means that there is something left over in your budget at the end of the day/week/month/year. This means that you are saving and then you will be investing. Proper investing leads to increased positive cash flow. These compound interest savings and investments are assets. To have lots of assets is the sign of true wealth.

You may have a more modest party but it will be able to continue for forever. That is why positive cash flow is the best budget goal. Any other budget goals are set to support and finally achieve the budget goal of positive cash flow and a positive cash flow that increases as time goes by.

Virgil Jones is a consultant in the area of personal finances. Virgil has writen for online ezines such as How to Compund Interest on the website Thinkyourmoney.com

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Article Citation
MLA Style Citation:
Jones, Virgil "Positive Cash Flow is the Only Budget Goal." Positive Cash Flow is the Only Budget Goal. 18 Jan. 2011. uberarticles.com. 30 Jul 2015 <http://uberarticles.com/finance/positive-cash-flow-is-the-only-budget-goal/>.

APA Style Citation:
Jones, V (2011, January 18). Positive Cash Flow is the Only Budget Goal. Retrieved July 30, 2015, from http://uberarticles.com/finance/positive-cash-flow-is-the-only-budget-goal/

Chicago Style Citation:
Jones, Virgil "Positive Cash Flow is the Only Budget Goal" uberarticles.com. http://uberarticles.com/finance/positive-cash-flow-is-the-only-budget-goal/


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