Velocity of money
How fast is your money?
Your money should be like a good bird dog. It helps you find a bird, catch the bird, and then goes out and gets you another bird. Most people's money acts like the bird that just flies away.
Today, many financial planners and mutual fund managers say to the average investor, "Just give us your money, and we'll put your money to work for you." Most investors nod and repeat the mantra, "Invest for the long term, buy and hold, and diversify."
Their money gets parked and they go back to work.
For most investors, these are pretty good ideas, given that most investors have no interest in learning how to put their money to work, since they seem to prefer working harder than their money.
The trouble with these plans of average investors is that they are not necessarily productive investment strategies, nor are they necessarily safer.
For many people, they may not have enough time to rebuild their retirement fund if it is wiped out late in their life.
One of the strategies we used to keep our money moving was to buy a rental property, and within a year or two, borrow out our own down payment and buy another rental property.<- using money like a bird dog.
The investments had to make sense "today", not tomorrow.
Your profit is made when you buy, not when you sell.
It had to have a positive cash flow even in a bad economy.
We were investors when we were willing to buy and hold the properties for their cash flow.
We were traders when we knew our entry as well as our exit strategy.
An investor buys to hold and a trader buys to sell.
You need to know how they are different and how to be both.
The idea of velocity of money is really a principle or mental tool of the rich.
Velocity of money is an important aspect of leverage.
Your money should be like a good bird dog. It helps you find a bird, catch the bird, and then goes out and gets you another bird. Most people's money acts like the bird that just flies away.
Today, many financial planners and mutual fund managers say to the average investor, "Just give us your money, and we'll put your money to work for you." Most investors nod and repeat the mantra, "Invest for the long term, buy and hold, and diversify."
Their money gets parked and they go back to work.
For most investors, these are pretty good ideas, given that most investors have no interest in learning how to put their money to work, since they seem to prefer working harder than their money.
The trouble with these plans of average investors is that they are not necessarily productive investment strategies, nor are they necessarily safer.
For many people, they may not have enough time to rebuild their retirement fund if it is wiped out late in their life.
One of the strategies we used to keep our money moving was to buy a rental property, and within a year or two, borrow out our own down payment and buy another rental property.<- using money like a bird dog.
The investments had to make sense "today", not tomorrow.
Your profit is made when you buy, not when you sell.
It had to have a positive cash flow even in a bad economy.
We were investors when we were willing to buy and hold the properties for their cash flow.
We were traders when we knew our entry as well as our exit strategy.
An investor buys to hold and a trader buys to sell.
You need to know how they are different and how to be both.
The idea of velocity of money is really a principle or mental tool of the rich.
Velocity of money is an important aspect of leverage.
