Increasing your positive cash flow is one of the most important tenets to accumulating wealth and ultimately achieving financial independence.

What is cash flow?

Cash flow is simply the flow of money coming in and and going out. If you are spending less then then you earn then you are cash flow positive. If you spend more then you earn you then you are cash flow negative.

Why is this important?

If you increase your positive cash flow then you’ll be able to save more. Now sure you can say “To hell with saving” and achieve your financial goals via other means like investing, gambling, or even  rob a bank but there is a lot more risk involved. Sure you could be the worlds greatest investor and turn $1 into $1 million but then wouldn’t it be easier if you had started with $2, $100, $1000? In the end you have more control over your cash flow then anything else and therefore makes it the most important element to increase wealth.

Spend Less

• The written price isn’t the final price – Always ask for promotions to be applied to your cable and phone bills. Ask for a better deal on those new shoes you’ve been looking at. If your willing to haggle on the price of a new car then you should haggle on everything you buy.
• Work toward eliminating unnecessary fees – This may mean maintaining a minimum balance in your bank account or switching to a no fee service like PC Financial. As well there are things like credit card fees and balance insurance. In either case these small services add up and are counter productive to increasing your positive cash flow.
• Stop frivolous spending – Before making any purchase take and minute and ask yourself if you really need it .   More times then not you’ll find that you really don’t need and will end up putting it back.
• Cook at home – Instead of going out to eat go grocery shopping instead. Take-out is fine once in a while but it shouldn’t be a nightly ritual. There is a huge premium out restaurant food and most of it can be cooked at home for a fraction of the cost.

Earn  More

• Take initiative at work – Step up at work and let the people above know what you’re doing. That way they know what you are worth to the company and can compensate you appropriately when the time comes.
• Pursue additional certifications or courses - Some companies provide pay raises for achieving additional credentials. Others provide bonuses. If your company provides neither then at minimum you are building your resume for a move some where else.
• Seek other opportunities with other employers – Though this isn’t exactly the best economy to be job hunting there are always opportunities because in the end the best career moves are always a matter of right opportunity at the right time.
• Find alternate income streams – You could parlay your hobby or interest into something that earns some additional income. If you do scrapbooking then look at making invitations for people.

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