Back in December, I introduced the notion of building a cash flow generating machine instead of amassing an enormous pile of cash that would generate a similar cash flow. In order to finance my RV project, I needed an effective way to make it happen.
I didn’t want to do it the classic way by patiently waiting each month to put money aside and build a pile of cash that would finance the project. This is not only the classic way to fund a project, but also the most secure way to achieve it. Since I hangout with lots of entrepreneurs, I decided to do it their way: take additional risk and finance my project with cash flow generated along the way.
A few months ago, Dividend Mantra sold its blog and stopped updating his freedom fund. I’m offering you my version of it; called the Freedom Cash Flow Update.
The Situation as at January 7th
Each month, I’ll be updated my business numbers and share them with you. One could have decided to save money and buy stocks and live from dividend payments, I decided to use my money to buy a solid portfolio of websites generating passive income. The risk and volatility are obviously higher, but so is the reward!
Here’s where my business stands at the moment in term of short term assets and short terms liabilities:
Short Term Assets: $9,652.10
Current bank account: $6,580.01
Costa Rica bank account:$426.00
Pending cheques to be received by the end of the month: $2,546.09
Total short term assets: $9,652.10
I have separated the Costa Rica bank account as I need to put money aside to pay for the villa. The next payment is due in May 2016 (right before I leave) in the amount of nearly $4,000. I opened a separate account to make sure I have enough money. The business is NOT paying the villa; I will distribute a dividend payment (love that word!) and deal with taxes later ;-).
Short Term Liabilities: $7,436.54
Visa card #1: $850.18
Visa card #2: $1,336.36
Business line of credit: $5,250.00
Total short term liabilities: $7,436.54
We have two credit cards to operate our business as I have a partner in this venture. He is the most amazing guy on earth and will let me withdraw enough money from our company to finance my trip. In exchange, I work numerous hours in the company “for free”.
My goal is to pay off completely our business line of credit before I leave. The line of credit will be considered as an additional cushion for my trip (the available amount is $15,000). As we also have running expenses, I can’t use the $9K in my bank account to pay off the line of credit. Please take into account that I’m trying to simplify a lot of the reality of a business with this report.
How I Made $6,478 in Revenue in December
While most people take off during the Holidays and spend time with their families, December is one of my strongest months of the year. This is mainly because I launched Dividend Stocks Rock back in December 2013. Therefore, I have several membership renewals during this month.
The first two weeks of the month were incredible and then the revenue stream went quiet for the last two weeks. This gives me some time to prepare for the year to come.
Since I have a sizeable newsletter, each promotion I offer my readers is a source of additional income. I prepared two offers in January in order to keep up the momentum.
Freedom Cash Flow for December: $2,875
The revenue number is obviously not the net figure that was generated during that month. We have several expenses required for running the company along with purchases needed. For example, I bought a laptop, an external drive and an iPad during that month. This slowed down the cash flow significantly.
Nonetheless, we were able to generate almost $3,000 in free cash flow. This is exactly my goal while I’ll be away. I’m only a few hundred dollars away from my objective.
What is the Plan for January:
In January, I have two extra sources of income that are expected. Those are one-time shots but should boost my revenue.
The first one is the launch of my 2016 Best Dividend Stocks eBook. Each year, I review both the US and Canadian markets and pull out my favorite picks with analyses. You can have a glimpse of what I offer with the free part here:
2016 US Dividend Stock Picks
2016 Canadian Dividend Stock Picks
The book is offered for free to my DSR members and sells for $4.99 the general public. I don’t expect to make a huge amount of money from it, but it will pay the work required and may lead to additional DSR membership sales.
The second initiative is a 2 year promotional membership deal at Dividend Stocks Rock. I’m not a big fan of offering rebates on my membership website as I feel it’s unfair for members who are already registered. This is why I came up with the idea of charging less per year, but for 2 years.
The current pricing options are $14.95/month or $149.95 per year. I added $199.95 for 2 years (click here to read the details). I initially put the cut off date for January 9th but decided to let the promotion run for the rest of the month after receiving requests from readers.
With both promotions combined, I expect to beat my December month. We made $4,759 in revenue in January 2015, this number has already been attained.
If I can generate about $3,000 in free cash flow month until I leave in June, my RV trip will be stress-free financially. This will require that I work more nights until then and I’m willing to invest the additional effort!