Cashflow over Networth

 Cashflow over Networth 






Most (including me) fall into the trap of overhyping Networth At least when we read headlines 


Mukesh Ambani made 79 billion during this pandemic, Jeff Bezos made 72 billion 

Rich are getting richer etc 

What people miss here is their assets are getting revalued and claim a higher price tag (Due to a steep rise in their listed company)but does that change the cash generated from their companies is a real question to ask

Similar is the case when the middle-class boast that their property prices(Networth)have soared but does that mean you get more rent(cashflow)? The sad reality is rental income is less than the saving bank rate in fact in Bangalore it's less than 2%.


Always cash flow gives the real picture, Networth will rise and fall according to a market frenzy. A successful and prosperous company generates tons of cash allowing them not only to invest in other companies but might return shareholders money in buyback the equity (Usually in a bear market )of the company and extinguish shares thereby reducing the number of shares resulting in improving the valuations of the company.

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