Many people are still revolving round the average cycle. And yes, there are different reasons and factors that could be responsible for that. Nevertheless, one prominent reason why lots of people are still revolving round the average cycle is because they aren't giving the term “CashFlow” much attention. In fact, many average people don't seem to be conscious of it. And the fact is, as far as financial freedom is concerned, the cash flow of an individual or an organization plays a major role - because it has a big impact in the life of everyone.

Before proceeding, let us see a simplified explanation of the term “cash flow”.

Cash Flow

There are actually various definitions and lessons taught about cashflow from different sources. Nevertheless, some of such might be tagged ‘complicated theories which seem to be extremely difficult to be applied into people's practical lives’. But I want to give a very simple definition that is broken down to the simplest form, so that everyone will be able to grasps and understand fully.

So in a simple form, I defined cash flow as: “The movement of money in and out your pocket/bank account”.

Going with that simple definition of mine, it's obvious (and unpleasant) that many people aren't giving lots of serious attention to the movement of money, to and fro their pockets or bank accounts. And ironically, many of such people keeps throwing blames on the government for their own standard of living, ignoring the fact that they are the primary faults of their unstable financial lives. Ironically, many of those individuals who aren't giving much serious attention to the movement of money to and fro their pockets will always expect a magic that will make them wake into a pool of money- ignoring the fact that the state of their statues lies in their palms.

Truthfully, cashflow isn't something to be taken lightly. And the reason is because it goes a long way in determining the position of your financial life. And we all should know that the financial lives shouldn't be mishandled- because it plays a big role in other aspects of our lives (since almost everyone desire respect and prestige in their various immediate societies)

How CashFlow Influences One's Financial Life

With all things being equal, if money enters your pocket (or bank account) more than it goes out of it, you are likely to be more financially independent; and vis-a-vis.

That simply explained why many people are still struggling financially in our societies: Money Moves Out Of Their Pockets More Than It Finds It’s Way In'. There is even a popular saying that: “Money is hard to get, but easy to spend”. And many people are moving with that. They find it so easy spending money as soon as it touches their palms. And that's the main factor affecting the financial status of many of us. Yet, many decided to be ignorant of it. And ironically, they keep expecting a magic overnight in their finances.

You might be the co-founder of a booming business or even the owner of a company. Your salary might be above six digits; you might even have one or two other investments elsewhere. But here is the fact: If the force that takes money out of your pocket is stronger than the force that brings money in, you are prone to be constantly broke.

And realistically, one main reason why money often leaps out from people's pocket is because many are living a 'fake life' to please others (which leave them with no choice but to continue taking more money out of their pockets continuously).

A young woman has a nice paying job, and she was making good money. Then, due to some reasons, she decided to buy a very expensive car, probably because she wants to live a befitting life. As she bought the car, people around begin giving her accolades. The thing is, people around believes that as she was able to afford that kind of expensive car, then she has much more in her bank account. But this young woman isn't happy...

Since the car is a high class car, it requires high level of maintenance. After she's paid her monthly salary, a large chunk of it goes to the maintenance of the car. She can't buy other things, she doesn't have a good savings anymore, and she is often broke (if she should tell people she's broke, they won't believe her because of the high class car she drives). And she can't but continue with the car because of the speculations that might arise.

And that's exactly the same with many individuals. That’s why you see lots of people earning good income but they are still revolving round the average cycle. My advice is, be careful and conscious of the movement of money in your pocket. You don't have to please anyone by lavishing money - a scarce resource, on irrelevant things. If money should go out of your pocket, try to ensure that it brings more in.

Always remember this: If money keeps going out of your pocket than it's coming in, you will find yourself revolving round the average cycle.

credit: www.cashrange.com/2016/01/the-importance-of-cashflow-in-your-financial-life/