#5 Two Most Important Words in Personal Finance

Episode Highlights

I consider “cash” and “flow” to be the two most important words in personal finance. When you read personal finance blogs or when you listen to finance podcasts, you will see words thrown around like debt, budget, net worth or taxes.

All of those things are important. They’re all great things to talk about.

However, when it really comes down to it, cash flow is what it’s all about.  

Now what cash flow is, at least in my mind, is the amount of money that really flows through your personal finances. 

Let’s look at some important points that affect your cash flow:

• We discuss both positive and negative cash flow.
• It’s really all about understanding how to manage or manipulate your cash flow. 
• How bad debt and negative cash flow oftentimes has to do with a significant amount of credit card debt, automobile debt that is attached to a depreciating asset (something that loses value over time). That will get you in serious debt problems.
• We talk about ways to increase cash flow.
• I came out with six figures of student loan debt. I was able to refinance that to a much better interest rate, which really decreased the amount of interest that I would pay over time.