I first heard about this representation of the personal cash flow concept from a brilliant young planner from Brazil. This may be a bit of an oversimplification, however, I think it provides an interesting context in which to consider one’s personal cash flow.
Further, this concept ties in really nicely with a couple of our core financial planning principles here at CGN Advisors:
Live Within Your Means - Spend less than you earn and save diligently. Use productive debt to grow
your assets and avoid consumer debt.
Enjoy Life On Your Terms - Position yourself to be able to take family vacations, enjoy your hobbies, live your dreams, volunteer your time and give generously.
Ponder this concept and strive to be intentional about your monthly spending/saving decisions and how they can help you achieve a quality-of-life balance between enjoying today and planning for tomorrow.