There are primarily two things people invest for: capital gains and cash-flow. What’s the difference?
Capital gains is the one-time profit you make on the sale of an investment. Cash-flow is an ongoing stream of income you receive from an investment.
Why should you go for cash-flow?
Cash-flow investing is what most buy-and-hold real estate investors are after. For example, you start buying a small apartment and you rent it out. Every month you collect the rent, pay the operating expenses and the mortgage. If you’ve managed well, you end up with a positive cash flow. Then you reinvest your profits in other investments with positive cash-flow. Re-investing cash flow breeds new assets, which, in turn, breed more cash flow. This is how the positive cash-flow cycle works.