How To Get Out of a Negative Cash Flow Situation

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If you’re in a negative cash flow situation what’s the best way to get out of it and become positive cash flowed.

Ryan: All right. I’ve got a question from [Tez 00:00:03]. They’re currently stuck with negative cash flow investment properties in Sydney. What would be the best way to get out of this situation?

It’s kind of like, why … ? If you’re in Sydney, why would you want to get out? It just depends on when you bought and what your current situation is with loans and stuff like that, and if it’s feasible and if it’s good to sell those properties, and you have a strategy where you could reinvest that money into a better situation for yourself.

Ben: Yeah, there’s so many different factors at play, there. It’s really hard to answer that question because, again, it comes back to your strategy. I talk to people with three, four million dollars equity in properties in Sydney that are still tied to their job and have to go to work every day because it’s a negatively geared portfolio.

When I suggest, why don’t you sell half of it, buy a couple of assets outright with great cashflow, and just stop doing what you’re doing, it’s like, “Oh, my God, I couldn’t do that,” type mentality.

A lot of people are actually financially independent, they just don’t know it, or they’re not prepared to do what it takes to actually make it happen and [crosstalk 00:01:10] with that.

Ryan: Sounds like a lot of conversations we’ve had.

Ben: Yeah. Yeah, you should have that conversation with probably half the people on this call. There’s probably a bunch of people there that are already in an equity position to be retired, they just don’t want to convert it to cashflow yet.

Ryan: Yeah, well that’s the thing. Sometimes that’s a good idea, like if you’re negatively geared and your properties are going really well, and the market’s growing, and the properties are performing really well, and you want to keep it because you don’t need the money yet, then that’s fine. But if you’re …

I think you need to look at your goals and say, “Well, what am I trying to achieve? What do I want to achieve?” Some people, they want that passive income, and they want that cashflow so that … because they hate their jobs.

They’re working 9:00 to 6:00 every day and they hate their life, and they’ve got $4 million in equity, but they have to keep working because they’re greedy about this $4 million.

Think about, what do actually want? Do you actually want cashflow and are you willing to do what it takes to get that? Which may mean selling some properties, or if you don’t want to sell them but you can borrow again, maybe next time invest in positive cash flow.

There’s so many things you can do, but just be real with your situation and be real with what you want, and then look at, what do I need to do to actually get what I want?

Because so many people just invest in property to make money, but they might make it, like Ben was saying, in the form of equity that they then don’t … never access.

It’s like, well, what’s the point? If you’re never going to use it, your life’s miserable because you hate your job, you’ve got all these millions of dollars of equity but it’s not doing anything for you, aren’t you just kind of wasting your life?

Ben: I have these strategy sessions, and you and I have a laugh about this regularly … I’ll have a strategy session with someone where their income is, let’s say, $60,000 per year, and I show them over the next 15 years how they can build a quality low risk portfolio that makes them 100 grand a year.

Then at the end of the call they’re like, “Oh, now I’d like 200k.” It’s because I’ve shown them how to make 100k and it all seems really simple. It’s just like that’s human nature, and in the past I got really caught up on that stuff and you might say that sometimes I still do.

Ryan: Sometimes …

Ben: Most of the time, all the time.

Ryan: We had that conversation the other day.

Ben: That’s what I’m thinking. But it’s just insane. Yeah, but it depends where you’re at in your stage of life. To me, cashflow and passive income has become much, much more important since I met you. In the old days I was more than happy to just have the equity and ride it out to the future, but these days it’s kind of like, well, you can have a bit of both if you’re smart about the way that you do things.

Ryan: Well, that’s the thing. I’m so keen on people to get to the point where they can replace their income through positive cashflow, and then you can go from there. If you want to get rich, and you want to keep investing, don’t quit your job, even though you’ve replaced your income, and maybe go and invest again.

Or if you decide that, hey, look, I’m happy with my 60 grand a year and I can just live a simple life but I can do what I want, I can garden or I can chill out, live in Noosa, and go surfing, like I do most mornings. It really depends on what you want.

I think there’s so many … All the property gurus and stuff out there are all talking about the big bucks and making millions of dollars because that’s what people want to hear, but I don’t know, I hope that we can get more around the message of living a quality life.

And that doesn’t necessarily require millions and millions, and you don’t need to be Richard Branson and own your own island. He owns an island up here. I just found that out the other day. My neighbor actually works there.

Ben: Yeah, he does. Just near Noosa.

Ryan: Yeah. He’s own a heart-shaped island or something in Noosa, on the river.

Ben: I think … I don’t know what drives people past a certain level of financial independence, if you know what I mean? There’s got to be some sort of alternative driver that continues to make … you know, for you to want to go from, let’s call it $3 million and a couple of hundred grand worth of passive income per annum, to a million dollars a year in passive income and $20 million worth of assets.

That’s driven by something that has got nothing to do with survival needs or quality of life or the things that I’m beginning to care a lot more about. I can’t put myself in that position of to just continue to push, and push, and push, and push forever for more zeros in your bank account.

Ryan: Well, it’s like the studies … They did a study on it, and money does make you happier up until a point. I can’t remember when this study was.

It was in the US and it was up to about $75,000 a year, money made people happier. There was a strong correlation with increased money equals increased happiness, up to about 75 grand a year. So maybe 100 grand a year, Australian, or something like that. After that, it was like money … increasing money didn’t increase happiness.

I think, maybe, it even had a negative correlation, in that as you get into the super wealthy and stuff like that, some people had less happiness.

I know people who have a lot, a lot of money, that people would wish that they were living their lifestyle, but then you see behind the scenes, and their life’s a wreck and they’re not happy. I think it’s just like, be real with what you want. Do you want-

Ben: It’s a double-edged sword sometimes.

Ryan: Well, what’s the point of being rich if you’re not happy? You know, if your marriage falls apart and you’re just not enjoying life?

Ben: That’s a big one. I just think everyone should get financially independent in a timeframe that suits the risk that they’re prepared to take on, without doing anything to impact their life or their family in a negative way. Once you’re financially independent, just decide what you want to do after. You know what I mean?

Ryan: Yeah.

Ben: Just do whatever you want to do. If you want to keep taking it from 100k a year to a million bucks, or if you want to do nothing for a few years and just re-find yourself, or if you want to keep working the same job, but it’s all choices that you have a … you’re in a position to actually make.

I think that’s the power of passive cashflow, and that’s the power of being financially independent, and there is … I think there’s something in that, as well. I think it’s a very powerful thing.

Ryan: Totally. I think, yeah, people just caught up because everyone’s talking about, you know, set your goals high. I totally believe that big goals are really important in life, and I love goal setting and setting goals for myself.

But sometimes people just set these big goals because someone told them to set a big goal, and they set it, “I want a million dollars a year in passive income,” but the goal doesn’t actually mean anything to them and it won’t actually affect their life because they’ll still live in the same area, with the same friends, going out to the same crappy Thai restaurant on Friday nights and getting $12 pad thai. I don’t know, just be …

I don’t know where I’m going. I’m going off on a tangent. But, yeah, I just … Be realistic with what you actually want and then work out a way to get it, whether that means selling properties, investing in future cashflow, or maybe even something completely different.

Ben: Yeah.

Ryan: Sorry, I just went off on a rant there, didn’t I? Deary me.

Ben: Where can we get $12 pad thai and beers this weekend? That sounds awesome.

Ryan: Dude, Montien Tong in Cronulla, have you ever been there?

Ben: Yes.

Ryan: Man, that is like … It’s probably a bit more than $12, maybe 14, but that’s like dirty pad thai, but it’s really good.

Ben: That’s awesome.

Ryan: If you go to Cronulla, skip all the good Thai places, just go to Montien Tong. It’s cheap and good. I think you can get beers there for like $3.50 for a XXXX or something.

Ben: I’ll not drink them unless they’re Tigers, and they sell them to me for like 50 cents.

Ryan: But, yeah. Okay. So, next question …

Hey, guys. I hope that you enjoy the answer to this question, which came from my live Q and A episode with Ben on YouTube. We will be doing more of these in the future.

If you want to check out Ben, then he is offering free strategy sessions to On Property listeners. To find out more about that, go to, and you can see all the details over there. That’s it for today, and until next time, stay positive.

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