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biophase
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I wrongly assumed from your blog that you were living off of the cash flow from your properties.
Well it's a combination of both. There is a famous or infamous thread called "Is cashflow king?" that I think I started on Richdad.
Most people believe that cashflow is king and that that is what you need to live off your investments. But you can live off capital gains for a long long time.
Here's an example. Suppose you had 2 condos cashflowing $180 each. They were giving you $360/mo cashflow which is certainly not enough to live off of. You sold them netting $200k in profits - $40k taxes = $160k. How long can you live off of $160k? If you need $5k a month, $60k year = 2.7 years. Let's say you have $1000/mo in cashflow coming in through other avenues. Now you can live 3.3 years. Pretty soon you can extend it out to 5, 10 even 15 years.
This is an extreme example, but you get the idea. In the meantime you wouldn't let that $160k sit idle either. You would be re-investing chunks of it during that time.
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