Forever Cash Friday- What is your number?

Hello Forevercashers! It’s time for Forever Cash Friday!


For this week’s Forever Cash Friday celebration, I wanted to encourage everybody to determine what there number is. Once you know your number, you will have a concrete goal to work towards and way to track your progress.

Basically, there are two schools of thought when it comes to preparing financially for the future: 1) save up a big pile of money, or 2) create multiple cash streams.

The mountain of money or “what is your number?” theory claims that to be able to retire in style you need to reach a certain number, a certain dollar figure, or a certain size pile of cash in the bank that will last long enough. (And you don’t want to outlive that!) While that is certainly one way to look at it, it has some serious flaws. One of these flaws is that the pile can disappear quickly if it is put in the wrong place and/or at the wrong time or with the wrong person.

This approach may have worked at one time. Heck, high school dropouts were getting great jobs and buying houses back in the 1970’s. But the fact is that times have changed. In today’s economy, you can’t rely on a stable job, Social Security, and solid returns from a 401K like before. You have to take matters into your own hands.

How? It’s easy: by learning more about the second school of thought – the approach that I call “Forever Cash”.

The secret of the wealthy is their Forever Cash and their Forever Cash Flow! Truly wealthy people don’t live off what their work pays; they don’t rely on a job or even their businesses! Truly wealthy people live from the ongoing (forever) cash flow that their investments provide for them. They focus on creating such investments and then keeping them, preferably forever.

Here’s how it works: wealthy people determine how much money they need flowing in per month to live the life they want. Then, they invest and invest and invest until they have set up enough permanent cash streams to match that number.

For example, let’s say that your ideal standard of living could be paid for with $8,000 per month in Forever Cash flow. With that money, you could pay off debts, travel, eat out, give to charity, volunteer…whatever. So your goal would be to set up enough cash flow streams to equal $8,000. What might that look like? Imagine an investment portfolio that contains:

  • 5 rental properties each producing $800 per month
  • 1 automated car wash that you own producing $2000 per month
  • 1000 shares of Apple that produce $3000 in cash dividends each quarter ($1000 per month)
  • 5 pieces of vacant land leased for recreation/hunting/agriculture that bring in $1000 per month
  • TOTAL: $8,000 per month

Now, a portfolio like that might seem impressive, even maybe a little unattainable. But I am convinced that you could build something similar within 3 to 5 years, if you can stay disciplined. And think of the advantages: security. If one asset dries up – you still have the rest. If the economy collapses – you aren’t dependent on any one sector. Your portfolio is adaptable and consistent.

So what could be your goal for this weekend? Determine your number.

Once you know your number, you know your goal and can track your progress as you move towards it.

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