How to Make Money Every Month Without Market Risks
Cash Flow Is King
Today, I want to challenge a common belief that I think is fundamentally flawed. When it comes to building wealth and achieving financial freedom, many people fall into the trap of waiting for their investments to increase in value over time. However, the truth is that real profit isn’t made when you sell—it’s made when you buy. This strategic approach, focused on generating cash flow from the start, can transform your investment mindset and accelerate your path to financial independence.
Let me clarify: if you already have enough wealth to sustain your lifestyle, investing in index funds and waiting for long-term growth can be a great idea. But I believe many people are stuck in the fantasy of “save, invest in an index fund, and wait.” These days, I hear people say that indices have appreciated by X% annually over the last Y years. However, this statement is misleading if you’re making it based on historical highs.
For example, someone who started working in 1975 and retired in February 2009 might have invested all their money on day one (unlikely), yet their annual return would have been only 4–5%.
Now, let me show you how adopting this cash-flow-focused mindset can help you build wealth faster and more securely.
The Problem with Investments Based on Waiting
Many people buy assets like index funds, land, or properties with the hope that their value will increase over time. While this strategy can work in some cases, it comes with two major drawbacks:
It’s slow: Waiting years to see profits limits your ability to reinvest and seize new opportunities.
It’s risky: Markets are unpredictable. If the asset’s value doesn’t rise as expected, you could end up losing money.
For instance, someone who buys a property that loses money every month while waiting for its price to rise is betting on an uncertain future. Successful investors, on the other hand, focus on assets that generate income from day one.
The Key: Invest for Cash Flow
Cash flow is the money that goes into your pocket each month after covering all expenses related to an investment. This approach has several advantages:
Generates immediate income: You don’t have to wait years to see results.
Reduces risk: Even if the asset’s value doesn’t increase, you still benefit financially.
Allows rapid reinvestment: You can use cash flow to acquire more assets and accelerate your financial growth.
Imagine buying a property for €100,000 with a mortgage loan. If rental income covers the mortgage payments, taxes, and operating expenses, any surplus becomes pure cash flow. Additionally, you can benefit from tax advantages like depreciation, which reduces your taxable income without affecting your actual earnings.
While rental properties are a solid example, my favorite case involves dividend aristocrats. Let’s look at Realty Income as an example—a company that has consistently paid dividends for over 25 years.
This means that if I invest €100k in this stock today, I know I’ll earn at least €5k next year and €5k plus a percentage increase the following year—and so on indefinitely. I don’t care what the market does because I know exactly what my returns will be.