To my understanding, investing for capital gains (e.g. in the stock market) is heavily taxed and passive income from cash flow investments is the least taxed income. So should people invest for capital gains or cash flow?
Also, I believe that if you invest for cash flow (e.g. investment properties), you have a constant stream of income and positive cash flow no matter how good the market is doing (unlike for stocks and funds where your share amount goes down).
Here is what Rich Dad says on the topic:
I am asking these questions after googling and coming across some articles, some of which are below:Cash flow is better than capital gains for three reasons:
- It is resilient from market swings and market chaos.
- It brings money into your pocket on a regular basis (not imaginary “paper wealth” such as net worth)
- It is generally taxed at a lower rate.
http://www.richdad.com/Resources/Rich-D ... tocks.aspx
http://www.richdad.com/Resources/Rich-D ... ncome.aspx