Taking Care of Your Biggest Cash Cow
If you had something that gave you money on a consistent basis day-after-day, year-after-year, you'd probably take care of it, right? You'd want to protect it so that the cash would keep coming, wouldn't you?
In the last chapter I asked you to spend some time thinking about what your most important cash cow was. What was your answer?
Borrowing to invest in the stock market?
Winning the lottery?
A huge inheritance?
For the vast majority of us, those answers are all wrong.
Your Biggest Cash Cow is . . .
That's right. For most of us, the greatest source of cash, by far, is our ability to work and earn income. That may sound obvious now but many people will not have written “Me” on that line.
Think about your own situation. Where does your cash come from? For most of us, it's our job or self-employment earnings.
I know this because I am an accountant and have seen thousands of personal income tax returns of Canadians, from low earners to multi-millionaires. All you have to do is look at the first page of their T1 General income tax return. Usually the amount of income from employment or self-employment dwarfs the amount of income from other sources, like investment or rental income, during the working years. And let's be clear, your working years are the most important years when it comes to your personal finances. How you handle your life and money during this time is what will determine how well you can retire. ...