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Dan Lok Show

Are You A Cash Flow Investor Or A Capital Gain Investor? (Know The Difference)

Dan Lok Show

Dan Lok

Entrepreneurship, Careers, Management, Business

4.9825 Ratings

🗓️ 31 May 2020

⏱️ 4 minutes

🧾️ Download transcript

Summary

If you want to become a successful and profitable investor, first you’ll need to answer the question, “are you a cash flow investor or a capital gain investor?” You’ll get the answer in this episode, where Dan Lok will explain the difference between the two and give you the clarity you need to discover your inner investor.

Transcript

Click on a timestamp to play from that location

0:00.0

Can you be a capital gang investor or a cash flow investor?

0:19.0

Now you can hear from my voice, I'm still recovering because this week I was

0:23.2

actually teaching my students, my high take closer students, as well as my high income copywriter

0:27.7

students, the two different groups, each one of them, almost a six-hour class, because I didn't

0:33.2

want to finish the class without answering all their questions. So although I always say that the class is around two to three hours,

0:40.6

but most of the time I over deliver and we go over time.

0:44.1

This is why you hear my voice is not at the optimal,

0:46.7

but I will answer your question.

0:49.4

So when it comes to cash flow investing or capital gain investing,

0:53.4

first of all, in case you don't know, let me explain the difference.

0:56.0

When you are a capital gain investor, meaning that you want to buy low and sell high, right?

1:00.0

You want to buy something at this price point and you want to sell at this price point.

1:04.0

I.e. you want to buy a piece of property for, let's say, $250,000.

1:07.0

And hopefully within a number of years, you're going're gonna sell for $350,000. That's a capital gain investor.

1:12.1

A cash flow investor on the other hand, you're not looking just into appreciation, but you're looking at the cash flow.

1:18.8

We talk about the cash on cash returns. So I'm investing, let's say, X amount of dollars. I want to get a return of maybe let's say 5%, 6%, 8%, 10% return on my cash investment.

1:31.4

What I put in, they put in $10. If I get a dollar back, you know, every year, like for the first

1:36.4

year, let's say, that's a 10% return. That's a cash flow investor. You got that, right? So which

1:42.2

one is better? Well, I believe there's no such thing. Now,

1:46.7

myself, I am more a cash flow investor because I want to make money when I buy. The appreciation,

1:53.6

on the other hand, it's not like, oh yeah, I don't want any appreciation. No, I do want

1:57.1

the appreciation in capital gain. I'm just not counting on it. To me, they're like icing on a cake. So if I'm buying a piece of property, I want to make sure that the cash flow

...

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