Returning to the concept or philosophy that money is energy and that money is what you trade your life energy for, doesn’t it follow that if clutter gets in the way of your life energy, that clutter also gets in the way of your potential for cashflow, and ultimately, wealthbuilding in general?

It’s intuitive, after all. Stuff takes up space like cholesterol clogging your arteries and unfinished business and baggage wearing you down emotionally. Stuff is an obstacle on the road to success, the travel on which can go much faster if you have a bit of wealth to help you along and support all those great opportunities that you’re ready to jump on.

Opening the floodgates to your future, right here, right now, is often said to occur when one releases attachments to things that are holding one back. What are these attachments? Attachments to things, “stuff,” junk, clutter, that all keeps you in the past. We know this.

It’s one thing to get rid of your clutter, but you need to be able to prevent it from coming back in the first place. It’s one thing to pay off your credit card, but you need to know that you’re not going to use it (or a new one) again. It’s one thing to bring in some new money, but if you spend it, you’re not growing your cashflow.

So how do we control the flow? Surely it’s not just about stopping the flow completely (e.g., never spending any money, never using any more credit cards)?

I’m currently in the process of decluttering before a big move. I have a lot of books that I don’t have room for, but which I think I still need. Some are rare-ish. Some just hard to get. Some are definitely fluffy, but I haven’t finished reading them and I’d like to. Some were definite impulse buys. As I was sorting through some of these piles, I thought about how silly some of the purchases were. But then I remembered that I also bought each one consciously, for a specific reason. This indicates several things:

(1) one part of me bought the book, another part of me sees it as “stuff” or as “potential money” if I sell it;
(2) these purchases were symbols, like little role models, representing to me a change that I had to make, or a direction that I wanted to go in or take action on. I bought them because they most represented that change or direction and I thought they would aid in my getting there.
(3) these purchases were also meant to be reminders, in case I forgot where I needed to go, what I needed to do, change, or learn. In case of going too far in one direction, a book I bought three months ago can remind me of an important step that I wanted to take. Again, it’s all about remembering why I bought it. It’s why I think that:

If you start purchasing consciously, your purchases take on the characteristics of your own conscious processes.

Talk about increasing your money consciousness. Consciousness has often been described as a “flow” — you know, the stream of consciousness, the fact that thoughts are unbreakable “wholes” and other aspects of metaphysical continua. So what does this say about flow in general? Let’s break it down:

(1) Consciousness is a flow;
(2) Life processes are a flow (they’re cyclical, always running);
(3) Monthly income is a flow (cyclical, re-occurring);
(4) Consumption is a flow (depends directly on #3);
(5) Living (the expenditure of life processes) is a flow (depends directly on #2);

Before you start thinking this looks too hokey or complicated, I just mean to make the point that there’s a case for thinking about all of these cyclical processes as part of the same overall flow, or at least, they’re interlinked in some very important ways. Suppose the following familiar scenario:

Bounds of energy and passion translate into doing a great job at work.
Your great job gets you a raise and calls about other opportunities.
More opportunities brings in more income.
More income can go to work making more money (through reinvestment etc.).
More money, eventually, gives you more options for living, which can lead to more energy, freedom, and passion for starting this cycle all over again and building on itself.

Maybe this sounds too simple, but you can see my point.

We should want to create leverage in our own lives. Our financial lives are often thought to be a microcosm of all of the other life processes we’re engaged in: social, emotional, physical, mental.

Creating leverage depends upon building synergy. “Life leverage” would be what I would call the “opportunity for options and actions.” The opportunity to have five choices instead of one. The opportunity to take a certain action and follow it through to produce a tangible result.

So I’ve raised several questions so far:

(1) How do we create synergy in our lives (and maybe, what is it?)?
(2) So what if our purchases take on our conscious characteristics?
(3) How do we “increase the flow”? (”More money!”)
(3) How do we “control the flow” (accumulating, borrowing, spending)?

I’ll take a stab at it:

The higher the level of consciousness (as in “conscious awareness”) you can maintain consistently throughout all aspects of your life, the greater will be your synergy and life leverage.

This synergy is a potential. It’s a kind of life energy (or “life leverage”) that can provide the springboard for accomplished action. It can help you both increase the flow and control the flow.

Use your purchases like you use your receipts. They tell you where you were, what you bought, why you did it even. Tally it up and do the balances. Did that source of “income” (the new purchase) match up with a corresponding “outcome”?

Obviously I can’t answer all of these questions here, but I wanted to open them up for discussion and further thought. I’d love it if you help me work on these and try to figure out some of these relationships. If you’re new here, you might want to subscribe to my feed for more updates, and please also leave a comment below about what you think. How are you in control of your life energy? How are you increasing your life leverage or “moneyenergy” as I also like to call it?

There’s probably a good reason why we use the language we do when we say we’re feeling “stuck” or “broke.” I think there are real connections, and I’d like to understand them better. I don’t just want to swallow some Hallmark recipe for “the law of attraction.” C’mon, let’s figure out what it really is! We can do that by starting to pay closer attention to the things I’ve talked about here.

Over the past 5 years I’ve had the opportunity to buy, operate, and sell five franchised restaurants. The restaurant businesses, and specifically franchised restaurants, have provided significant additional cash flow for my family (on top of my earnings as a financial advisor 2002-2006, and now private equity fund manager 2007-present).

I think the key is to realize that 9 out of 10 new business ventures fail in the first 12-18 months. Conversely, a franchised business (franchised from an established, proven company) generally has a 90% chance of surviving that first year, and a 75% chance of surviving and/or thriving for up to 5 years.

The second key point is to understand the difference between (1) franchises that require the owner to operate them day in and day out, and (2) franchises that are designed to be operated by a manager and not requiring 8 hours of “on site” time from the owner. I’ve confused these two in the past and it has cost me dearly.

If you desire additional cash flow, you need to find a franchise concept that is designed to allow the owner to maintain their current career, but to “support and assist” a manager at their franchised business.

This is important, because if you purchase a franchise that is designed to have the owner live there, you have simply bought yourself an expensive job. It will own you, you will not own it! The key point of understanding a franchise as an investment is to employ the concept of return on equity.

Let’s say you purchase a hair care franchise for $100,000. With good credit you generally will need to come up with $20,000 of your own cash (you, family, friends, etc.) … and a bank will usually give you the other $80,000, spread out over a 5-year repayment term. If you hire a great manager your store may be profitable that first year. To illustrate, let’s assume your store did $200,000 in haircut sales that first year. You paid your manager, your employees, your rent, your supplies, utilities, franchise fees (royalties), taxes, interest on your loan, etc. Then your accountant tells you that you have $20,000 left over at the end of the year… your profit! You may look at this and say, “Wow, I made a 20% return, because this hair care place cost a total of $100,000…Great!” But from the standpoint of Return on Equity, you have actually made a 100% return on your invested dollars! The actual equity that you have into your business is only the $20,000 that you had to come up with to secure your $80,000 bank loan. $20,000 invested, $20,000 profit, 100% annual return. (If things go well…and there is a lot that can go wrong! This is not for the faint of heart, no matter how much you like a franchise.)≡

This post was written by The Almost Millionaire. If you have follow-up questions or would like to know more about any aspect of starting or buying your own franchise for cashflow, you can contact him on his blog at http://thealmostmillionaire.blogspot.com, where he posts regular updates about his businesses.

Last week Double from DoubleOurMoney suggested that I spend some more time talking about cashflow and where I’m at in my progress with it. It is, after all, my main goal: to boost my monthly cashflow from diverse, global sources to a point where I have gained significant options regarding how I can spend my working life. I’m not looking for schedule-free days on the beach 24/7 or indulgent tour packages or shopping sprees, although these might be good for some people. I just want a serious buffer from the immediate demands that money causes. I don’t even need a complete income replacement at this point. I just want a window with a good breeze coming through. Does that make sense?

What I’d really like the extra cash for right now would be to pay for the education I’d really like in the exact program and university of my choice - rather than hoping for some fellowship or scholarship and clawing around with all the other crabs in the bucket that also need that all-important fellowship (which then can also determine where you end up going). I’m so tired of that kind of competition. Graduate research really needs to be better funded, all around. You’re asking people to give up a significant chunk of their earnings and mental life to follow university regulations, administrators, stress-out, wrack their brains, maintain some degree of a personal life and struggle to produce significant, society-enhancing research in there too. It’s a strange and often very unhealthy psychological environment. Recently in Canada there’s been a lot of attention given to the new volunteer fundraising campaign for the Beijing athletes. I guess athleticism, like sports in general, always attracts more attention than a new and interesting article in a social science journal, or an important book with a new argument about the social interpretation of XYZ. It’s great for the athletes to have funding, of course - everyone wants to pursue their dreams - but I guess everyone feels left out when more money doesn’t come their own way. Then again, I am living below the federal poverty line here:)

After education, well, investing is still really high a priority on my list. I really need to build up my asset base in order to increase future cashflow and provide me with more options. This is the time in my life when I need to really work hard at building that base in order to give it enough time for compounding into the future.

After investing, I’ll buy a small house or condo, hopefully with 100% cash. I’ve read opinions this way and that about whether it will be good or not to carry a mortgage or even own a house in the ensuing economic climate, but I figure, you’re going to have to live somewhere anyway, and no matter whether you rent or pay a mortgage, there’s going to be some living cost (unless you’re able to always crash at a friend’s, or strike some other deal). It would be nice to just get this part out of the way and own your living space free and clear. If I can boost my cashflow enough to allow me to carry a monthly mortgage, that would be excellent, because I definitely don’t have any other sources of windfalls or inheritance or other monetary gifts that will help me out.

Notice how I haven’t even mentioned any gadgets, cars, clothing, or other consumer goods yet. I’m shooting right at what matters most first. Can’t waste any time here. I’d say probably 80% of my current income goes right towards my investments. You bet I’m using credit cards - like yo-yos - to make up for any shortages I have each month.

My sources of monthly income until my next source of funding comes in (beginning with the largest amount first):

credit cards (2)
reinvested dividends (not technically income since they’re reinvested)
cash dividends
reinvested interest (again, not technically income)
quarterly tax rebate cheque from the government
bond interest (once a year in January)
this blog (not much, but July figures did just about double from June. My blog is not about making money from blogging, so I don’t like to dwell on it, but I’ll say that insofar as I’m any degree of help here sharing my own knowledge and research time - that if some income comes in for me while doing so, this seems fair. To that end, if there’s anything I can help you with, let me know. I’m passionate about motivating others about their own investment plans and knowledge!)

My Next Strategies

First, I’m trying to build up my dividend portfolio so that I receive a paycheck every week. Then I’m going to build it up slowly so that the paycheck is significant enough so that it can grow itself while I earn money and work elsewhere.

But I’ll need to improve my investing tricks too. I’m going to be learning forex (eToro has contacted me about doing a review of their platform), and the technique of using ETF Covered Calls that RichSlick and the CollegeAnalysts have so successfully used already. In fact, RichSlick’s overall strategy is pretty intelligent and I’d do well to find something similar that works for me. His analogy of sending your parcel to its destination using both regular mail and purolator is especially insightful. If one messenger fails, you can fall back on the other. Worst that will happen is your package doesn’t get there as fast.

How does this sound? Do you have any other ideas I should be trying? If you’d like to teach me ETF Covered Calls, be my guest. I’m going to be entering the options arena very slowly and carefully. Please do leave a comment below, email me, or subscribe to my feed for updates and come back soon.

That’s my cashflow plan in a nutshell. Doesn’t sound like much, I know. But I feel the secret is in there, and it excites me. I know it will work. It’s amazing I hadn’t figured it out yet already. I knew all the pieces but didn’t really put them together until recently. It took a small paradigm shift. I had to let go of certain dogmatic rules about investing that I had set up for myself in order to keep things simple while I was still an undergraduate. Not anymore!

I’ll update you when I have my weekly paycheck in place, and then again when it reaches significant milestones. And of course, whenever I do start forex and options, I’ll tell you all about that, too.

Awesome Articles on Cashflow:

The Dough Roller - Multiple Income Streams: 10 Ways to Earn Extra Income
Moolanomy - 40+ Alternative Income Ideas and Resources
Living Off Dividends - How Passive Is Your Passive Income?
Frugal Dad - How To Make Your Income More Passive