Key Concepts
- Maximum wealth accumulation through flexible and fixed assets automatically
- The ability to commit to fixed obligations like insurance and savings, at the same time create a buffer for tight cashflow situations
- Consciousness in managing expenses by categorizing them
- A systematic method to manage incoming cashflow and achieve a higher income
Cashflow optimization was inspired by the motivation to maximize and utilize every dollar of our income. Most people tend to spend and save the rest or save and spend the rest. There is no specific allocation that would encourage maximizing wealth accumulation.
In this aspect, freelancers face a few problems:
- Lack of proper allocation of resources as they tend to place too much emphasis on liquidity.
- Not committing enough to important assets like insurance and savings due to the fear of being unable to commit.
- Inefficient allocation of resources and losing opportunity costs
With the cash flow optimization model, freelancers will be able to understand the effectiveness of proper resource allocation.
