Real Estate Investing All Over the World Starts with Cash Flow

"Doing what needs to be done may not make you happy but it will make you great" ~ George Bernard Shaw

by Monica Mutuma

Cash flow. Cash flow. Despite the fact that I wholeheartedly embraced the Real Estate Millionaire: The Essential Starter Course and could not wait to begin, I became apprehensive when I was confronted with this topic.
 
I am not a big fan of numbers and calculations.

During my school days I always hovered between average and poor in mathematics. As a result I viewed it with a mixture of dislike and trepidation and never really developed confidence with numbers. Unfortunately one cannot get away from figures as they are a part of our everyday lives.

So I took a deep breath and started to do my personal cash flow assessments, hesitantly in the first week but more confident and diligent by the third week (thank you Excel). In one of the lessons students are advised to get their personal finances in order before buying a property - this includes doing proper cash flows.
 
To digress a bit, with the other major topic of goal setting I want to believe I have fared fairly well. Although I'm still a bit fuzzy on some of it, I've got a clear idea of what I want to do, when and how. Apart from real estate investing goals I have other things going on as well but real estate investing will be the key area of focus until I purchase the first property.
 
Back to finances. Dave advises that the importance of doing cash flows is that one is able to see where one is spending their money and how much they are spending.

I then had to take a long and hard look at my finances. I've never looked at my cash flow before. This doesn't mean to say I was a run away spender. Actually I was careful with money, never wanting to be in debt and saving for other projects. BUT I was not doing cash flows. Every month I would make all the important payments like rent, water, electricity, school/college fees, telephones, investments and savings, etc. Afterwards what I did, or rather did not do, is where I now realize I need to seriously work on if I am to make progress towards reaching my goals.

After paying bills I would relax. In the absence of cash flows (or a budget) I most likely lost money through non-critical purchases, which money could have been used to boost my savings.

So now I do my cash flows. I started on the first of August. I am using the templates which Dave thankfully provided. Since I feel I have a lot to discover about how I handle money, I have amended the cash flow calculator by adding "weekly columns" as opposed to having only one total for the month. This means I can track my expenditure on a weekly basis and I intend to study the weekly trend over a few months.

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