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This episode is a business coaching course that explains what cash flow is.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: Cash flow takes into account capital expenditures which reduces the amount of available cash in your business.
  • Cash Flow: The net cash received in any period, taking into account net operating income, debt service, capital expenses, loan proceeds, sale revenues, and any other sources and uses of cash.
  • Lesson Nugget: Many expenses that will not appear on an income statement are included on the cash flow statement.

cashflow teaching like watching netflix, an alternative to Lynda.com


-All right, today we're joined in sunny San Diego with Michael-- there is no real estate topic too obscure-- Burer. And we are talking about this little thing called cash flow. Now, I'm going to read the definition, and then he's going to give us an ample example that my mind can handle as to what it means and what it means to you in your business or the business you're thinking about starting.

So here we go on Thrive15.com, an alternative to Lynda.com . Cash flow. The net cash received in any period, taking into account net operating income, debt service, capital expenses, loan proceeds, sales revenue, and any other sources and uses of cash. What does that mean?

-Cash flow. So that's what we really all care about. How much cash am I putting in my pocket at the end of the day from a particular investment?

-How much cash am I putting in my pocket at the end of the day?

-Versus you'd distinguish it from net income. So net income doesn't include, for example, capital expenditures. You put a new roof on the building, you've got to capitalize that, and that is not something you expense or deduct from your income, but it certainly is a deduction from your cash flow, how much money you're actually pulling out of the business or the real estate.

-Let's say I've got a profit and loss statement or a statement that shows how much money's coming in, how much money's coming out. Is that summarizing my cash flow?

-No. Your income statement is just going to take your revenue minus your expenses, but your expenses don't include certain things. For example, they don't include the principal payments you would make on a loan. They don't include items that you would have to capitalize, improvements to the project. So those would be on a cash flow statement, and would certainly be a reduction in how much cash you're taking out at the end of the month.

-So cash flow, very important. That's the whole point.

-That's often the point.

-When you're in real estate, at your level where you guys have a ton of properties all over the world, how often is the discussion of cash flow brought up?

-Well, it depends on what your investment goals are. Sometimes you would choose to invest in something that had not a lot of cash flow, because there may be more residual down the road, but it's often a key component.

-What does the word residual mean?

-The return at the end of the investment.


-So an end event

-Do you ever have people that confuse you for Captain Awesome?

-Only you.

-Well, Michael, I wrote this down, and I almost shuddered to be like, oh, if I were to say this to him how would it affect our relationship, but I was like, well, you've got to be candid, you know what I mean? So I'm just going to say it here. Here we go. I appreciate you like a jelly donut appreciates its sweet strawberry filling.

-Nice. Well said.

-I'm sorry to laugh. I just get very emotional, and it's either laugh or cry.


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