Apparently this one is an accountant or in finance...
(Not exactly the definitions of cash flows I learned - not to mention nothing about operating cash flows, financing cash flows, investment cash flows... or how to properly use them for the time period, which seems to be a month in the given message.)
During an illness I spent an entire day reading the hilarity on the pink site, never to return after that. Now I read this!! Let me tell you, as a business operator for 45 years and as an active investor for 35 of those years, cash flow is most assuredly NOT what that stripperweeb doofus gives as a definition.
In my business, the income lines includes much deferred payment and the expense lines includes as much fiction as my creativity thinks the tax people will accept without a serious audit. It is very easy to report negative income and simultaneously to be swimming in cash.
or she's fucking an accountant or financeer
I'm with gatorfan on this one
She writes this as fact and then next semester when some poor dancer takes an accounting class at community college they might have a test question "Is cash flow the same as net income"? True or False.
I'm afraid the dancer will fail test drop out of school and return to stripping.
I stopped reading at the part where it said $96,000/year times 10 years equals 2 million dollars.
This is why, despite their best intentions, very few dancers actually "retire" on their own terms.
I majored in accounting and finance and the MAN(check blue ribbon)who wrote this sounds like he attended one of those seminars advertised in an informercial.
There's one piecing together financial terms to sound like a revolutionary new concept. It's another version of a pyramid scheme. He's probably searching for customers or attempting to impress with his 'wealth' of knowledge.
I'm tempted to go over and give him some shit...
To Farmerart:
Ask three professionals what the square root of nine is and the answers will be:
Teacher "Three"
Architect "3.0000"
Accountant "What do you want it to be?"
It seems that as the threads go along he (good catch, Chanel) IS being taken to task or at least questioned by the members as to whether he's trying to pitch something.
I guess it is a guy. I look at SW so infrequently I didn't realize guys posted.
I guess it is a guy. I look at SW so infrequently I didn't realize guys posted.
I read his other post on SW which was very long and detailed. He states that he/she was a former dancer so now I'm not as sure of gender.
Either he/she made a mistake signing up(with the blue ribbon)or mis-represented himself as a former dancer.
The other post sounds like it was professionaly written from a manual.
Could be a transvestite. Or even a male dancer, they do exist.
Using the "cash basis" method of accounting, and assuming no income tax due on the $100 net income, the stripper web he/she is correct that net income also equals cash flow in that example.
Once a person acquires income-producing assets (a business or rental property are examples), then items such as a mortgage payment will affect cash flow and net income in different ways. Inventory purchased from a (30-day) trade supplier immediately becomes an asset and has no affect on NI or CF. But if some (or all) of it is sold before it is actually paid for, then it becomes cost of goods sold and affects NI but in and of itself not CF...and later when it is paid for it will affect CF but not NI.
Enough Bookkeeping 101 from this former CPA.
The SW dude/dudette's contention that 3 years of putting away $2k each month and then acquiring rental property and not have to work another day is a curious statement. That's only $72k. Stripper w/ credit that could get a mortgage with 20% down = 4-6 unit apt that needs work....I dunno.
I knew a dancer who was putting away $3-5k/mo for a couple of years and bought a 4-unit apt building. She kept working, and bought another one. I think it took her most of 5 years of religiously socking away 3-5/mo to make it happen. The the economy took big hit, and her tenants had trouble paying rent and she had to go back to doing extra's to make the same money, and she was not getting younger....
^^^^ Yes you are correct. I thought someone would eventually make your point that in the cash basis of accounting the example was correct. But you know that in any accounting text, beyond it's definition in Chapter One, it's never mentioned again. Thanks for clarifying that NI could equal CF in some circumstances.
I thought the same thing. I've had a few accounting and finance classes and it's not the textbook definition of cash flow. Net income and cash flow are not the same thing but perhaps we're being too picky.