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How to Make Your Portfolio Pay You Monthly
Banks Love This Wealth-Building Hack
I’ve Been Studying How to Maximize Cash Flow and Put the Machine on Autopilot. I’ve spent quite some time studying how to maximize cash flow to put the machine on autopilot. The goal is to make your portfolio function like a business — one that generates profits, pays off its debts, and leaves the surplus either for your pocket or reinvestment into the business (your portfolio) to keep it growing.
First of all, banks love this model. When they see you paying on time and maintaining solid cash flow in your accounts, they’re generally more accommodating when you approach them for funding.
In recent weeks, many of you have written to me, saying that debt isn’t as good as I make it out to be and that I’m encouraging people to take reckless risks. That’s absolutely not the case. I firmly believe no one should take on debt unless they have at least a basic understanding of two things: 1. Finance and 2. Their own temperament.
Others have reached out to say that real estate is the only way to generate cash flow and that it’s impossible to achieve this with stocks or dividends.
Let me tell you: that’s a complete myth. Dividends can generate excellent cash flow, but you need to know how to use the tools at your disposal effectively.
One of the few books that even real estate maximalists recommend when it comes to investing is Stock Market Cash Flow by Andy Tanner. I recently finished reading it, and while it didn’t teach me anything groundbreaking, I found several key lessons worth sharing.
Dividend Growth
When we all create Excel spreadsheets estimating how many shares of company X or Y we need to achieve financial independence, there’s one crucial factor we often overlook: the growth of the stock (or ETF) itself. This means something as simple as understanding that 1% of $100 is not the same as 1% of $200.
It might sound trivial, but I’m sure many of you dismiss this idea without fully considering its implications. Sure, rents from real estate also increase over time, but they don’t grow at the same pace as the underlying stock price often does.
