Strong cash flow

Strong cash flow is the key to investment success.

Whether it be investing in one’s own business; investing in managed funds that in turn invest in other assets such as property or shares; whether it be individuals investing in residential property investments or commercial property investments; small businesses; large businesses; they all require strong cash flow to achieve investment success.

Household budget is just as important.

When the household budget is properly managed with strong cash flow management at play, life is much easier. The anxiety and stress that accompanies poorly managed household budgets is absent. Life is good.

The household budget

For households, good cash flow means there is enough money to pay the bills, to have some left over and to be able to save.

Sure, for those whose income levels are low, having enough left over might be more challenging but indeed, is all the more reason for strong management of that household budget.

Also it might be an idea to ask the question … “But why is my/our income so low?”

The business owner / operator

Small businesses rely absolutely on cash flow from their operations. Running out of cash flow is the quickest way to kill off a small business.

It is important for small business owners to distinguish between profit and cash flow.

This can be a trap for the uninitiated. Sometimes novice business owners make the mistake of thinking that the accounting profit is the same as cash flow or money to spend. No it is not.

Sometimes small business owners do not realise that what is showing as profit in the income statement is sometimes sitting in plant and equipment, motor vehicles, computers or growth initiatives that have used up some of the cash that flowed but nonetheless, it still shows as profit regardless. Does that make sense?

Profit is good but cash flow is critical for small businesses.

Rental properties

Whether it’s a residential property or a commercial property, cash flow underpins the real value of a property (as opposed to the rateable value, the bank’s valuation or even a registered valuer’s valuation). The “intrinsic value” if you like, of a property relates to its cash flow.

A wide gap between the cash flow and the rental income of a property between the capital value or let’s say the purchase price means a property could be expensive or over-priced – quite common in a liquidity bubble driven environment.

Whilst a residential property or a house without a tenant may not be so impacted by the lack of an income stream because people can live in a house, an industrial or commercial property relies significantly on having a tenant and having cash flow to support the actual value of the property.

For a number of commercial and industrial properties, no tenant means a significantly marked down value for the property.

Big businesses / Direct shares

Whilst big businesses sometimes have greater capacity to override or even “bluff their way” through cash flow difficulty, without sufficient cash flow, inevitably those businesses’ trading prices on the market will be marked down strongly and quickly should any news of cash flow problems emerge.

Whilst big businesses listed on the markets are perhaps more complex than other types of investment, they are no different when it comes to cash flow.

A free cash flow that is retained by the business and reinvested at a high return on equity or a higher return on capital is an investment worth considering.

Those businesses with minimal debt and a strong position in their market niche will likely show strong unencumbered free cash flow consistently. They may also grow. That means the cash flow will also grow. Investing in that type of business can be quite profitable, particularly over time.


Cash flow is almost everything when it comes to investing … usually the best place to start is the budget at home.


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Peter Flannery - WISEplanning - Authorised Financial Adviser and Certified Financial Planner - New Zealand

Peter Flannery

“Helping everyday Kiwis who expect more … to live their lives the way they want”


Peter was raised on the family farm in Kamahi, near Edendale in Southland. He is an investor, business owner and a first generation financial advisor, having entered financial services in 1983 in Southland.


Peter now lives in Christchurch with his family. His hobbies include family time, spending time with friends, exercise, reading a good novel and time on the deck at the bach.


Peter founded WISEplanning in 1987. His 500 clients live across New Zealand and a few overseas. The ongoing expansion of WISEplanning now includes offices in Invercargill, Christchurch (HQ) and Auckland.


Peter is known among his clients for challenging common practice and conventional methodology.


He argues “People tend to follow the crowd, which is interesting, because most people are both time poor and money poor, so why follow them?”


He is known to many around New Zealand as one of few to warn in 2004 of the coming global financial crisis (The GFC) that suddenly erupted in 2008. His views were considered controversial at the time. Peter credits Warren Buffett and his partner Charlie Munger for his most useful learning’s about investing.


Peter believes education continues throughout life. Some highlights from his recent continuing education include:


• The formal Financial Adviser training through Massey University in Palmerston North,


• The Entrepreneurial Coaching program through The Strategic Coach in Vancouver, Canada,


• The Business Owner/Manager Program through The Icehouse in New Zealand,


• The Peak Performance Program through Glazer Kennedy, Baltimore, USA


• The High Performance Program through The Elite Professionals Program in New Zealand


• The Experts Academy through Brendon Burchard, Sydney, Australia


• The Millionaire Mentor Program through Scott Harris, The Gold Coast, Australia.


As an investor, he is regularly researching markets and analysing potential investment opportunities and likes to point out to anyone who will listen that discipline around the investment method is key to success.


Peter has developed programs and tools that help everyday kiwis who expect more out of life to succeed sooner.

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Miriam Woon

Miriam has been with the WISEplanning team for a few years, bringing with her enthusiasm and extensive customer service skills to the role.


She emigrated to New Zealand from the Netherlands and spent her teenage years in the Bay of Plenty before moving to Auckland to begin her studies in Travel and Tourism. Employment in the Tourism industry eventually led Miriam to start her “8 year OE”. Whilst managing ski chalets in the French Alps, she met her future husband. They moved to Cardiff for a few years before moving to Canterbury in 2008, and now works remotely from Nelson.


Miriam is the Operations Manager for WISEplanning’s clients. Her passion has always been to work closely with individuals to help them improve their work and life skills.


Miriam enjoys spending time with her two sons, husband, family and friends. She has a passion for running, skiing, photography, exercise, reading and really enjoys dealing with people.

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Sean Yang

Sean is the Portfolio Coordinator for Clients at WISEplanning and brings his enthusiasm, professionalism and well developed customer service skills to the role. Sean was born in Beijing, China and obtained his Bachelor Degree in Economics (majored in Statistics) in China and Graduated Diploma in Accounting and Finance at University of Canterbury.


Sean has worked in the finance sector specialising in Investment Advisory for more than 10 years. He is experienced in dealing with clients’ queries and providing support to Financial Advisors.


He is an organised person with a strong customer focus. Sean enjoys spending time with his two daughters, wife, family and friends. He has a passion for sports such as soccer, badminton and swimming and really enjoys dealing with people.

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Theo Zbijowski

Theo Zbijowski is the Financial Paraplanner at WISEplanning who brings his friendly and enthusiastic attitude to the role.

Theo graduated from the University of Canterbury with a Bachelor of Commerce majoring in Accounting and Finance in 2016.

He is a conscientious person who maintains a strong work ethic as well as a professional attitude. Theo enjoys spending his time playing sports such as squash, tennis and table tennis; while also enjoying the company of his friends and family.

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Kim MacKenzie

Kim has been with WISEplanning since mid 2016 and is our Client Services Specialist. She brings enthusiasm for customer service, professionalism, good time management and efficiencies to the role.


Kim and her husband have been based in Christchurch for over 20 years and originated from Central Otago where they both grew up. They have three teenagers so Kim know’s first hand how busy managing life, money, kids and family can be.


Kim enjoy’s spending time with family and friends, should do more exercise than she does and recently brought a bach where her family and friends are now creating time spent memories that she hopes will carry her kids through to adulthood.

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