Instant Cash Flow
While investigating ways to provide instant cash flow, the choices seemed so limited that a person would more profitably spend time constructing their own methods. Apparently, the main choices for providing instant cash flow were to read and follow the latest popular book on the subject, devise a way to do financial gymnastics with various aspects of a business in order to appear to have more cash, construct a self-perpetuating income stream by selling a product or service or pay outrageous APRs to a payday loan service. Some options seemed better than others, but some appeared to be flirting around the edges of what is ethical. Most seemed to either relegate one to the status of a sheep (read and follow), an accountant (the ethically challenged type), a slick salesman, or a full-time borrower (pay someone outrageous interest rates.) None of these choices was particularly appealing, and some seemed unethical.
Cash flow is important, both in business and personal finances. Even profitable businesses have floundered because they were unable to afford their own success. A business may look great on the books, yet struggle to keep enough inventory or to pay creditors on time. Some 'solutions' offered for providing instant cash flow suggested that a business owner delay paying creditors or vendors for several weeks, in order to provide the liquidity needed to run the business. However, this action seemed somehow dishonest, and also appeared better suited for 'how to alienate creditors and vendors', which does not seem like a wise practice for long term relationships with these necessary partners in a business' success. The only way to accomplish this in an honest fashion would be to explain the situation to the vendors in advance and work out a plan where any delay in payment was agreed upon by both parties. Vendors would probably be willing to work out a solution if a solid customer faithfully paid accounts on time, and continued to keep up with current agreements.
Personal financial liquidity would work along the same principles. At times everyone feels the pinch from unexpected expenses. However, if a person is continually in a desperate scramble to pay bills on time, perhaps it is time for a close look at how finances are being used. Although many people do not like the idea of a budget, it is well worth the time and effort. The alternative, which is constantly being under stress about financial matters, is far more costly in terms of health and peace of mind. Utilizing a budget will soon lead to ideas about manufacturing some instant cash flow of one's own. The best part is that experimenting with this program will not cost any money.
Whether it is a business or personal financial situation, take the time to see where money is being spent. Write down every expense in an inexpensive notebook as it occurs, from small items like daily coffee break expenses or parking meter costs to large items like rent, mortgage and expenses involving business or personal vehicles. Most people are largely creatures of habit, so it may not take more than a week or two to spot certain trends regarding where money is leaking out. Businesses are a bit more complicated, so that aspect may take longer before trends become evident. Soon, clear patterns should emerge. A person may be surprised about the impact which small actions have upon a budget, and equally delighted to observe the instant cash flow which can be generated by changing even a few costly habits.
A budget for a business or individual is a personal matter. Only that person can really determine which budgetary items are truly important for accomplishing his or her goals. After noting particular spending patterns, take some time to think about how adjustments can be made to better use the money for actions which move one closer to important goals. Eliminating unnecessary expenses can be difficult, but this is sometimes the only way to generate instant cash flow. There is also a great feeling of accomplishment in knowing that the decisions made and actions taken will continue to free up money for reaching further goals. Rather than spending money on payday loans with their exorbitant interest rates, or on late or over-limit fees, this money can be kept and invested in one's own endeavors. While a certain amount of sacrifice, or at least delayed gratification, will be necessary, the rewards in terms of cash flow improvement (not to mention peace of mind) will soon become evident.
Along the way, decide to put aside some money regularly into a savings account. If possible, have this amount deducted automatically from each paycheck. That way, savings will not end up becoming neglected or forgotten altogether. Do not worry if the amount which can be put into savings is very small. Proverbs 13:11 offers this encouragement: "Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase." Small, regular contributions can soon add up to significant amounts. In time, financial vehicles such as certificates of deposit, money market accounts or other means of gaining a better rate of interest can be employed for these funds. Be sure to read all terms of such agreements carefully for fees which may be charged for early withdrawal. Keep some assets in an account which can be accessed without penalty for emergencies which require instant cash flow.
When a person or business reaches a significant goal, such as having enough money set aside in a savings account for several month's expenses, take time to celebrate. This is an important way to maintain perspective and regain the strength to continue to follow the practices which have provided some instant cash flow. Just be careful not to undo all the work that has been accomplished! Remember to take the time to thank others for their contributions to your personal or business goals.
Cash Flow NotesCash flow notes are financial agreements that bring a steady income to a person. If the owner of a property is holding the mortgage for a buyer who couldn't get financing on his own, that owner would be holding a cash flow note. If someone is a participator in a trust and is receiving or will be receiving monthly income, he is holding a cash flow note. Lottery winners, those who have an annuity and those with court awards paying out monthly or yearly, are all holders of these notes. There is a whole business dedicated to buying cash flow notes from people so that they can have a lump sum of money immediately (relatively speaking) rather than wait for years or decades for the entire amount.
Let's take the case of the man who tried for three years to sell his parent's house in a large Eastern city. Look, the place was not exactly the Ritz and five realtors tried and failed, so the man decided to sell to a couple who wouldn't have passed the bank's sniff test, but the owner liked them and really liked the idea of selling the place. So the guy is now holding the mortgage. Five hundred dollars a month of steady income for thirty years, but the guy's sixty eight with a bad heart, and the wife is begging for an African safari. So the man puts an ad in the paper that he is willing to sell cash flow notes. And soon the man has a prospective buyer.
When the two got together to talk turkey, the buyer set down the ground rules. His offer for the note would be based on the new owners' credit score, the value and condition of the house as well as its location. When all the facts were assembled, the notes buyer was willing to pay the man forty five percent of what the owner had originally asked for the house with a realtor. While it was a real disappointment, the man had an epiphany. Since the value of the dollar seemed to be dropping every year and inflation climbing, the realization came that in ten years the five hundred each month might be worth four hundred dollars and by the time the thirtieth year came, the five hundred could easily be worth a hundred dollars. Better to get money while it still had a value of five hundred in today's economy. The note was sold and the new mortgage owner was now paid by the couple each month.
A contract specifically laying out the amount of the loan to purchase an object, the interest rate, the amount and frequency of payments and any penalties for late payments or early payoff is a cash note. Airplanes, cars, boats and mobile homes are all ways that a cash note can be secured. And if the cash flow notes holder longs for credit card relief or a medical treatment or for any reason, there are investors ready to buy the note, but it will be at a tidy profit for them, not for the note holder. After telling us that the greatest commandment is to love God with all our heart, soul, mind and strength, Jesus added, "Thou shalt love thy neighbor as thyself. There is none other commandment greater than these." (Mark 12:31) Christian business people should approach each customer with this commandment in mind.
Some people don't want to sell entire cash flow notes because the security of having a monthly income is comforting, but the holders still need a quick cash infusion. For example, a man has sold a three hundred thousand dollar plane and is holding the note for it. The man runs into tax problems and needs forty thousand dollars to clear a lien on his house. The guy offers a buyer of notes the next sixteen monthly payments on the airplane in return for most of the money upfront to cover his liability. The investor agrees to a seventy cents on the dollar lump sum to the note holder for those sixteen months of monthly payments. The note holder gets the forty thousand, and the investor makes almost ten thousand dollars on the deal. Not a bad deal for both and the man get back to his monthly income in a year and five months.
Not everyone has an annuity, which can certainly be considered in the family of cash flow notes, but many people have life insurance policies that, because of a terminal illness, can be put on the market and bought by an investment business. Such a business transaction, called a viatical, could be considered the same as the purchase of cash flow notes. These types of sales get very low ratings from financial experts and the business is fraught with those looking to take advantage of someone in a very sad condition. The best advice is to try and get through this hard time without being battered by a viatical agreement. Here are some parting thoughts.
There is a sizable amount of people making a good living buying and selling cash flow notes. There are even infomercials offering courses on how to do the business just described. But hold on; do a lot of checking because there have been complaints about the way these advertised companies do business. And while the traditional financial world has had its grocery cart full of maggots, anytime business is done outside the traditional box, such as the buying and selling of these notes, the breeding ground for unethical practices is enhanced almost exponentially. We need to be wise as serpents and gentle as doves.