SNAPSHOT: Cash Flow Investing and Brokering
How It Works:
Your task is to identify people or businesses with future payments they’d be willing to sell at a discount for ready cash. You profit either by buying the payments yourself, or by serving as broker for a third party, typically a large company, that provides the funds.
- Fast Profits: It can take a while to get a deal going. But once you do, you can make phenomenal returns investing in cash flow. And some kinds of deals (such as factoring) keep on paying indefinitely.
- Low Up-Front Investment: If you broker deals with third-party funding sources, you can make money with no investment of your own. (You will need to invest time, however, and possibly some money in getting educated about cash flow deals.)
- It’s Noncyclical: People and business need fast cash in both good times and bad.
- It’s Hard Work: If you’re looking for an easy or passive way to make money, this isn’t it.
- Study Required: The world of cash flow is complex, and it takes some effort to learn how it works.
- Long Start-up Time: It may take several months or a year to get the hang of the business and start closing deals.
Who Should Invest:
If you have little free time and you want an investment that will make money for you without too much of your attention, then cash flow is the wrong choice. But if you have some free time and you’re interested in an industry that could dramatically increase your income, then learning to invest in and broker cash flow deals may be just the thing to set you on your way to financial independence.