Reply to At what net worth are you considered wealthy ?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]It depends on the assets. Net worth doesn’t make you wealthy. Cash flow makes you wealthy. Cash flow is more important than net worth. [/quote]

Can’t DISagree more.

Wealth can generate cash flow, but typically cash flow if from a combination of W2 salary and investments. Most people owning a company worth $100M would be considered wealthy, even if they only get a salary of $100k and don’t sell any part of the business.[/quote]

Sorry, cash flow PP is correct and you're wrong.  Apart from rapid growth companies or during bubble periods, a business can generally only be worth $100M if it is generating lots of cash.  Companies are valued at multiples of the cash they throw off - that's Finance 101.  As the owner, you own that huge stream of incoming cash.  The fact that you only take a small portion of it as salary is a tax-minimization strategy but doesn't mean you don't have great cash flow.

Cash flow trumps net worth.[/quote]

Actually the business in this example has good cash flow, the owner does not. Most businesses of $100m are not sole ownership so you have other complicating factors as well to get access to that cash. A similar example was made earlier of a $30m business owner having no cash flow because his net worth is tied up in the business. Is the business owner wealthy or not, which side are you on?[/quote]

Understand how wealthy stockholders get their cash.  Companies write them huge loans against holdings which they get tax free and possibly with deductible interest.  Without ever selling a share of stock.  Bezos, Benioff etc - this is how they do it.[/quote]

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