Cash flow simply means the money that comes into and leaves a business or
household. Money flows into a business in the form of revenues and out through
the form of expenses. Money flows into a household in many forms. Are you
receiving money from a structured settlement or lottery? Those are incoming cash
flows. Do you owe money to anyone? Those are outgoing cash flows.
While owner financing can trace its roots much further back into history, it was the
1980s that really saw a new beginning in the Cash Flow Industry. Today there are
more than 60 income streams that can be bought and sold. An income stream is a
future series of payments. More technically, an income stream is a financial
obligation or debt that one party owes to another party.
How Can You Benefit from Cash Flow?
Individuals and businesses sell income streams for three basic reasons:
o Access — it may be a need to pay debt, settle a divorce, purchase a home,
take a vacation, finance a wedding, start a new business, etc. Whatever income
stream you currently have that you may need cash for immediately.
o Interest or Yield — as interest or yield opportunities arise that allow you
to make more money than your current investments, you may want to reallocate
money from existing income streams to new better-producing ones.
o Inflation — this eats away at the future earning power of your money.
You can sell your income stream to avoid the drop in real value over time.
Individuals and businesses buy income streams as a form of investing that often
produce better returns than they can obtain from more traditional sources.