Cash flow literally means ‘the flow of cash’. Behind this barbaric term lurks an extremely simple principle: it is simply a sum of money that will return to your pocket at regular intervals. For example if you buy a stock that costs $100 and pays $5 of dividends, your cash flow is $5. If you buy 100 shares, this gives you a cash flow of $500, which return to your pocket without touching your initial capital, and this at regular intervals.

It’s a way to increase your revenue from day 1 of your investment, and it doesn’t matter what kind of investment vehicles used as long as it pays you regularly (shares via dividends, bonds via coupons, real estate via rents). The higher the payment frequency is, the better.

Why do we need to focus on this way of investing?

Because the Cash Flow that goes right back into your pocket can be reused immediately to create a snowball effect.

For example: You buy a property that gives you a positive cash flow of $200 per month. You can use $200 to buy 2 shares at $100 each month which will bring you $5 each. In one year you buy 24 shares, a portfolio of $2400 will pay you itself 24 x 5 = $120 in the first year, that can be used to buy new shares and will bring you interest again. You will understand it allows you to reach interest on interests, which greatly accelerates your enrichment speed. ... 

I often mentioned on this site of stock strategies based on performance and dividends. Because it is the investment method that I have personally chosen, that I know it works, and that it is relatively simple to implement. That said this method is not the only one that can earn long-term returns above the average.

However, solid, profitable and time-tested stock strategies are not as many as we think: In my opinion, there are only five of them robust enough and sufficiently tested by serious academic research to be worthy of interest. Without further delay, here is a guide to the 5 best strategies for investing in the stock market.

What you will learn in this article:

• A very simple strategy that makes it possible to beat 90% of the players in the stock markets
• More complex strategies with annual returns of 25 to 30% per year
• The difference between an active strategy and a passive strategy
• The Pros, Cons and detailed performance of each strategy

The best passive strategies for investing in the stock market

Passive strategies consist of simply investing in stock market indices (such as S&P500, Dow Jones), they are said to be “passive” because they do not seek to do better than the indices, only to replicate them as more accurate as possible. These strategies have the advantage of being very little time-consuming, and you will not need a great knowledge of the stock markets to be effective. ...