Pertaining to this topic subject, which is more important? Net worth or Cash flow?
Personally, I will pick cash flow instead of Net worth. But, most people will pick Net worth because net worth will tell the rest, how rich or how poor they are.
I am sure everyone of us have expenses & to solve this issue, cash flow will be a better choice compare to Net worth. Why?
For example, if you have invested in some dividend shares and these shares will keep paying you dividend, you could use this dividend as a form of cash flow to pay your expenses.
By holding onto the shares, such cash flow is infinite.
But that doesn’t mean Net worth can’t do the same job by paying off the expenses. It can do the job! However, it’s a matter of time, the Net worth will be used up due to time.
Moreover, Net worth will fluctuate, sometime it will go up, and sometime it will go down. If it go up, you will have more money to use but what if it go down, you will probably have difficulty in meeting your needs.
Therefore, would you rather to have the golden goose keep giving you the golden eggs or always trying to search, collect and store as many golden eggs as possible.
The reason, why I always advocate to invest in dividend shares because the passive income you be getting from the dividends will allow you to have the freedom to choose the things you want to do.