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Cash Flow from Assets | How Can You Leverage on This?


May 10, 2021

Harsha Moole, M.D., MBBS


How can you leverage on acquiring cash flow from assets? Maybe you are thinking right now about how you can build a steady flow of income outside your regular 9 to 5 job. Cash flow assets are your best bet. The beauty in cash flow assets is that the merrier, the better. The more you buy these assets, the more likely you can build a solid financial future.

Cash flow assets are one of the best ways of making money at your convenience. Look at it as sleeping while a machine prints money for you. Investors prefer cash flow assets because it requires little or no effort to make money. All you need to do is fund your investment or buy these assets and watch them bring in regular income every month.

So you may be wondering at this point what cash flow from assets means. It is the total amount of cash that flows to you from the different assets that you have acquired. Examples of cash flow assets include your investments in real estate, stocks, bonds, and other forms of liquid assets.

How Can Doctors Earn Cash Flow from Assets

It is not just enough for doctors to earn so much. Doctors need to learn how to make regular cash flow from assets outside their regular jobs. You can’t talk of earning cash flow from assets if there are no assets on grounds. So the first step required to earn cash flow from assets is to buy them.

There are different asset options that doctors can choose from. An excellent example of such an option is real estate investment which can come in the form of rental properties, real estate investment trusts as well as real estate investment groups. Other investments or assets options available to doctors are stocks, bonds, and cryptocurrencies. Doctors can earn cash flow through the following ways:

  • Money Market: This is one of the easiest yet most typical ways of generating cash flow. It is also important to note that a savings account pays the least amount of interest, but it is better than nothing. Instead of spending your money, you can start your cash flow-building journey by putting the money in the money market.
  • Real Estate: This is perhaps the fastest way of accumulating huge cash flow from assets as a doctor. Real Estate assets make it possible for doctors to choose how involved they want to be in managing their assets by providing alternatives. So, as a doctor, you may decide to buy units or blocks of apartments and manage them yourself.

Another option available to you is the Real Estate Investment Trust, where you relinquish the management of your investments to a real estate company while receiving dividends. Because of the high value attached to those properties, real estate investing holds excellent promise.

  • Certificate of Deposits: This is a kind of fixed deposit where you authorize your bank to restrict access to your money. The restriction is for a fixed period. Certificate of Deposits earn higher interest than a regular savings account and can be a good source of additional cash flow.
  • Bonds: These are IOUs issued by businesses to investors. Investors invest specific amounts into the company and are paid a specified percentage of their invested capital as profit once the agreed time elapses. Different companies issue bonds to potential investors in a bid to raise money for business expansion. You can consider investing in these assets in building your flow as a doctor.
  • Dividend Stocks: Investing in stocks as a doctor is another way of not just diversifying your investment portfolio but building sustainable wealth. Dividend stocks pay a portion of their profit to shareholders as dividends. You can create a steady flow of cash from stocks as a doctor.
  • Cryptocurrencies: Like a new child in the block, cryptocurrency is creating a lot of sensation in the investment world. Crypto is a digital currency that is not backed up by a tangible asset. This currency is traded between consenting parties with no broker involved. Although there are many potential use cases of this blockchain technology, the industry is in its nascent stages, and most investments in this asset class are speculative. Though a good way of building cash flow and net worth, crypto is also very volatile/risky investment vehicle.

Cash Flow from Assets

How Can Doctors Build Assets | How You Can Leverage on Cash Flow from Asset

There is a peculiar way experienced investors build assets. But for a doctor starting on asset building, there are three steps to do so:

#1. Save money

Doctors earn very high and, as a result, live a luxurious life. However, wealth building is long-term, and to achieve that; you may have to make sacrifices in the present. Saving money is simple and straightforward. Decide on the portion of your income that you will set aside monthly in your savings account or money market.

Bear in mind that one of the aims of saving is to build up investing capital. So, how do you save?

  • Build emergency funds: Unplanned expenditures are known for depleting an individual’s money. So how do you tackle unplanned expenses? Have a good cash reserve. This will help you meet those demands whenever they occur.
  • Put away funds in a recurring deposit: recurring deposits aim at helping you save. First, decide on the percentage of your monthly income that you would like to reserve. Then, leave a standing order with your bank to deduct the amount once your salary comes in. You may also restrict access to the recurring deposit account.

#2. Invest

One of the reasons for savings is to have money to invest. However, while you save, also decide on the percentage of your monthly income you would invest. Why do you have to do so? Because investment multiplies your money faster. So what are the avenues for investing?

  • Hybrid funds: This is achieved through the purchasing of units of mutual funds. Hybrid funds can be used for further investment.
  • ETFs: Through this investment option, doctors can also take advantage of the benefits from both mutual funds and stocks. It is a great way to diversify your investment portfolio.
  • Gold: Gold is a long-term asset that can bring regular cash flow in the long run. The appreciation in value is steady and sure. Doctors can also build assets by buying and storing gold.
  • Land: Buying land is another investment avenue that will help you to build cash flow assets. The value of land keeps appreciating, so profit is assured.

#3. Lock funds away

Locking funds away is essential. Here, assets are converted into Income-generating assets. This ensures a steady cash flow from assets. What are the means for achieving this:

  • Dividend-paying stocks: This stock pays regular dividends to owners. This helps you to maintain a steady cash flow.
  • Rental properties: This is one of the fastest vehicles for accumulating wealth and generating steady cash flow from assets. The yield is also always on the rise because of inflation.
  • REIT: Real Estate investment trust is a new kid in the block but with so much popularity. It provides a convenient way of earning investment dividends without the hassles involved in managing a property. With a good distribution of your funds, you can generate steady income and build your assets.

Types of Real Estate Doctors Can Invest In

You can also acquire cash flow from assets through your real estate investments. There are different ways doctors can take advantage of real estate. They are:

  • Commercial Real Estate: This type of real estate involves acquiring buildings used for businesses for long-term cash flow generation. The properties could be businesses or lands. Commercial real estate includes:
    • Office buildings: office buildings can be a suburban or urban office buildings. Urban office buildings are the high-rise properties that are commonly seen in cities. Suburban office buildings may be smaller in size and are seen in suburban areas.
    • Industrial building: These buildings are built with industrial activities in mind. It houses different businesses and is situated far from urban areas.
    • Hotel building: All establishments that provide housing, meals, and other services to sightseers or travellers fall into this category.
    • Special purpose building: This includes all other commercial buildings used for a designated purpose. This includes churches, older adults’s homes, amusement parks, store front buildings, and others.
    • Mobile home parks: These are low income housing arrangements. They are considered to be resilient to market fluctuations and provide a stable investment opportunity.
  • Residential Real Estate Investment: These are simply properties that families occupy. These families pay leases or rents to investors or real estate. Companies. These can come in the form of:
    • Single-family rentals: These are detached structures with a garage and possibly a yard. These rentals are common in suburban neighborhoods. The catch is that it Is designed with one family in mind.
    • Vacation rentals: These are structures, specially designed and furnished, to house different tourists visiting a particular place. This is another good place to invest.
    • Multi-family properties: These are structures that can house different families under one roof. This type of structure provides more rental income as other families can pay for units of the property.
  • Land Real Estate: In this type of investment, the land is acquired for erecting a building for a commercial center, residential purposes, farming, or mining.

Final Thoughts | Cash Flow from Assets

Having assets that can passively generate steady cash flow is very vital for wealth building. Doctors can take advantage of the various investment channels and accumulate wealth to gain financial freedom.

 

Here at PhysicianEstate, we welcome all physician entrepreneurs to learn about commercial real estate investments, rental property investments, and wealth generation. We encourage all physicians to eventually become real estate physician investors. We know a great deal about Who – What – Why – How. 

Stay in touch with us by signing up for our newsletter. The newsletter will keep you up to speed on the current real estate investments we are looking at, provide physicians with investment opportunities, and much more.  

Legal Disclaimer: This is not investment advice. I am not a legal and/or investment advisor. This is my personal blog, and all information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. These are my views, it is not a production of my employer, nor is it affiliated with any broker/dealer or registered investment advisor. While the information provided is believed to be accurate, it may include errors or inaccuracies. To the maximum extent permitted by law, PhysicianEstate disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. You should consult with an attorney or other professional to determine what may be best for your individual needs. Your use of the information on the website or materials linked from the Web is at your own risk. 

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Authored by Harsha Moole, M.D., MBBS

Hey there! I hope you enjoyed reading this blog. PhysicianEstate is my brain child and passion project. I run this platform to empower entrepreneurially motivated physicians to make financially educated investment decisions and discuss asset protection strategies. Lots of important but free content here and here! If you have any questions or if you are interested in partnering with me, let’s connect! hmoole@physicianestate.com

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