Jaspreet Singh: Why You Should Invest for Cash Flow
Written by
John Csiszar
Edited by
Gary Dudak
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Jaspreet Singh is the very popular creator of the YouTube channel “Minority Mindset,” which currently boasts over 1.7 million subscribers. The attorney and entrepreneur espouses an investment strategy that relies on generating cash flow — but it’s not one that promises immediate success.
Rather, Singh urges his viewers to be willing to sacrifice current needs for long-term gains. It may take time to get wealthy by investing for cash flow, but Singh believes in the end, having your investments pay for all your expenses is the very definition of winning in finance. Here’s a brief overview of the lesson Singh gave on investing for cash flow as posted on the Minority Mindset YouTube channel on Sept. 1, 2023.
You Don’t Get Rich by Investing for Cash Flow
One of the most surprising aspects of Singh’s suggestion that you have to invest for cash flow is that he admits you won’t get rich by investing for cash flow. Rather, he says that cash flow is a way that the wealthy enjoy a life of financial freedom, so your goal should be to build it up over time.
After all, you can’t simply invest $1,000 and expect to live off the cash flow from that, because you’ll likely only generate $50 to $100 per year. But if you amass $1 million in assets, then your cash flow might approximate $50,000 to $100,000, which can potentially be enough to fund your entire lifestyle.
But If You Start Small, You Can Ultimately Live off Your Cash Flow
Singh’s strategy for getting to the point where cash flow can fund your lifestyle is to start small and be consistent. He suggests that investors put in a “decade of sacrifice,” during which they live smaller and sock away as much money as they can. Over time, those small amounts of money will add up. According to Singh, if you consistently use part of your earnings month after month, year after year, and even decade after decade, you’ll eventually build up a solid stream of income from the assets you purchase.
Of course, the struggle is the decade of sacrifice. According to Singh, most people aren’t willing to set aside their current desires for future financial prosperity — they want their BMW or Gucci bags or a bigger house now. But if you can put those desires aside and invest that money instead, after a solid decade or more, then your cash flow will put you in the position to buy as many consumer goods as you want, without even worrying about the price because your assets will be paying for them.
Rather than having to work harder or longer to get a larger paycheck, your cash flow will be at the level where it will cover all your expenses. This, to Singh, is what it truly means to be wealthy.
What Are the Assets That Can Accomplish This?
For Singh, the assets that can best set you up with a lifetime of cash flow are stocks and real estate.
Some stocks, although not all, pay dividends, which provide you with cash flow for doing nothing but owning the stock. Companies that are consistent dividend payers will also often raise their dividends over time, keeping your cash flow on pace with or even exceeding the rate of inflation. If you don’t have the time or ability to research the right stocks, Singh suggests investing in an exchange-traded fund or a mutual fund that owns high-dividend stocks. The more you can keep putting into these assets, the more that your cash flow will grow over time.
In terms of real estate, Singh recommends generating rental income rather than trying to make capital gains from flipping properties. Singh says that while he has no idea what housing prices will do over the next month or year, he knows that his rental income checks will keep coming — and will likely increase over time. For Singh, flipping is too speculative, whereas rental income is conservative, consistent and predictable.
Is This the Right Strategy for You?
Whether you use stocks, real estate or some other assets, Singh says that you have to start putting money to work to generate cash flow. While stocks and real estate are what works for him, Singh suggests that you continue to educate yourself and find the right strategy that works for you.
Anyone who says “you must own real estate” or “you must own stocks” isn’t touting the right principle, according to Singh, because many people have become wealthy without owning one or the other. However, the financial personality stresses that the generation of cash flow is a must, regardless of how you do it.
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