What purchases, not counting real estate, will help me increase my cash flow?
You can increase your monthly cash flow in two ways: It's really that simple. I'd even argue that to a certain extent, decreasing expenses can be more cash-positive than increasing income by the same amount if you're spending post-tax money because increasing income generally increases your taxes. So if you have a chunk of cash and you want to increase your cash flow, you could decrease debt (like Chris suggested) and it would have the same effect on your monthly cash flow. Or you could invest in something that pays a dividend or pays interest. There are many options other than real estate, including dividend-paying stocks or funds, CDs, bonds, etc. To get started you could open an account with any of the major brokerage firms and get suggestions from their financial professionals, usually for free. They'll help you look at the risk/reward aspects of various investments. Brownbag your lunch and make coffee at home.   If your current lifestyle includes daily takeout lunches and/or barista-made drinks, a rough estimate is you have a negative cash flow of $8-20 per day, $40-100 per week, $2080-5200 per year.   If you have daily smoothies, buy a blender.  If you have daily lattes buy an espresso maker.  I recently got myself a sodastream and it's been worth it.   Until you have a six figure portfolio, you aren't going to swing a comparable annual return differential based on asset allocation. "Mutual funds can be relatively low risk and a good starting point. Really it depends on you.  What are your goals? This is a pretty open ended question. These can all be low risk and provide some return.  Note ""Less Knowledge"" is never a good qualifier for an investment. Your money is your business and you are entitled to know what your business is up to."
"From your question, I believe that you are looking for what these mean in accounting terms and not the difference between a debit and a credit card. I'll deal with purchase and sale first as this is easier. They are the same thing seen from different points of view. If I sell something to you then I have made a sale and you have made a purchase. Every sale is a purchase and every purchase is a sale. Debits and Credits are accounting terms and refer to double column accounting (the most common accounting system used). The way a set of accounts works is, accounts are set up under the following broad headings: The first 3 appear on the Balance Sheet, so called because the accounts balance (Assets = Liabilities + Equity). This is always a ""point-in-time"" snapshot of the accounts (1 June 2015). That last 3 appear on the Profit and Loss sheet, Profit (or loss) = Income - Cost of Goods Sold - Expenses. This is always an interval measure (1 July 2014 to 30 June 2015). Changes in these accounts flow through to the Equity part of the Balance Sheet. When you enter a transaction the Debits always equal the Credits, they are simply applied to different accounts. Debits increase Assets, Cost of Goods Sold and Expenses and decrease Liabilities, Equity and Income. Credits do the reverse For your examples: 1. a customer buy something from me, what is the debit and credit? I will assume they pay $1,000 and the thing cost you $500 Your cash (asset) goes up by $1,000 (Debit), your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This gives you a profit of $500. 2. a customer buy something of worth 1000 but gives me 500 what is     debit and credit Your cash (asset) goes up by $500 (Debit), your debtors (asset) goes up by $500, your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This also gives you a profit of $500. 3. if I buy a product from supplier worth 1000 and pay equally what is credit and debit I assume you mean pay cash: Your cash (asset) goes down by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have swapped one asset (cash) for another (inventory). 4. if I buy a product from supplier worth 1000 and don't pay what is credit and debit Your creditors (liability) goes up by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have gained an asset (inventory) but incurred a liability (creditors). The reason for confusion is that most people only see Debits and Credits in one place - their bank statement. Your bank statement is a journal of one of the banks liability accounts - its their liability because they owe the money to you (even loan accounts adopt this convention). Credits happen when you give money to the bank, they credit  your account (increase a liability) and debit their cash balance (increase an asset). Debits are when they give money to you, they debit your account (decrease a liability) and credit their cash balance (decrease an asset) . If at the end of the period, you have a credit balance then they owe money to you, a debit balance means you owe money to them. If you were keeping a book of accounts then your record of the transactions would be a mirror image of the bank's because you would be looking at it from your point of view." "Say the price is $200K. Would I, as a real estate investor, want to buy such a house? If the rent is $600, that's $7200/yr. ""the local property tax rate is levied on the tax base, and the applicable tax rate ranges from 0.40% to 0.76%"" so, I'll assume .5%, just $1,000. There are rules of thumb that say half the rent will go to maintenance and other costs, if that seems high, say just $2000.  We're left with $4000/yr. Less than 2% on the $200K investment. Italian bonds are yielding 8%.  As an investor, if I couldn't get more than $2000/mo gross rent, I would not buy the house for $200K.  As a parent, I'd have the money invested, have $16K/yr of income and help support you without taking all the risk the real estate investor has.  Note: your question and my answer are in dollars, but I acknowledge the Italy tag, and used Italy property tax. My tax is 1.6% of home value in my US city.  Edit: per the comment below, the 8% is incorrect. The return on the house purchase doesn't change, of course, but the safe yields are not that high, currently, 1%." I went to one of those seminars, some huge HUGE bullshit scheme. I like what RDPD does with inspiring you, but they were riding on his name to make you increase your credit limit, put things on the card, take a trip to some other country to learn more about real estate, all the while giving them thousands of dollars. Total bullshit.  I now have more rental properties, doing it my way, and I made money with each purchase.  Was the one you went to from the Tigris company or something like that? You're welcome, good questions on a confusing topic! Let me see if I can unpack it a bit, try to clear up the way accrual accounting jukes and jives...  &gt;  I buy an airline today. I get to recognize the revenue from any pre-sold tickets starting tomorrow and reduce my deferred revenue liability...  Hmm... Are you sure that's the case? Does purchasing the business somehow cause those future events to resolve?  I could be way off base here so let me know if I'm missing something, but whenever an airline ticket is purchased in advance, it's a balance sheet issue. Cash is increased and there is a liability created for Deferred Revenue. The revenue hits the income statement only when the flight takes place. As you noted, this would be accompanied with the usual trappings of costs and expenses, etc.  &gt;  However, I don't get that cash as it has already been paid to the previous owner.  Sure you do! Their bank account is now yours, right? I imagine that buying an airline company would be a matter of transferring ownership rather than to resolve any underlying uncertainty in the recognition of earnings, yeah?  As for valuation, it may depend on if you're looking at the income statement in isolation and relying on EPS or if you're using a more integrated approach with the balance sheet, which would bring these sorts of developments to light.  Does that help? Any part still clear as mud?  EDIT: words Being able to make small investments in very valuable real estate could make this a game changer. I want to invest in a skyscraper in the UAE, but I only have $10k. I can just use REAL tokens to buy a percentage of that property. At least, that's the way I understand this to work. I am not going to argue the merits of investing in real estate (I am a fan I think it is a great idea when done right).  I will assume you have done your due diligence and your numbers are correct, so let's go through your questions point by point. What would be the type of taxes I should expect?  NONE. You are a real estate investor and the US government loves you. Everything is tax deductible and odds are your investment properties will actually manage to shelter some of your W2(day job) income and you will pay less taxes on that too.  Obviously I am exaggerating slightly find a CPA (certified public accountant) that is familiar with real estate, but here are a few examples. I am not a tax professional but hopefully this gives you an idea of what sort of tax benifits you can expect.   How is Insurance cost calculated?  Best advice I have call a few insurance firms and ask them.  You will need landlord insurance make sure you are covered if a tenant gets hurt or burns down your property. You can expect to pay 15%-20% more for landlord insurance than regular insurance (100$/month is not a bad number to just plug in when running numbers its probably high).  Also your lease should require tenants to have renters insurance to help protect you. Have a liability conversation with a lawyer and think about LLCs.   How is the house price increase going to act as another source of income?  Appreciation can be another source of income but it is not really that useful in your scenario.  It is not liquid you will not realize it until you sell the property and then you have to pay capital gains and depreciation recapture on it.  There are methods to get access to the gains on the property without paying taxes.  This is done by leveraging the property, you get the equity but it is not counted as capital gains since you have to pay it back a mortgage or home equity lines of credit (HELOC) are examples of this.  I am not recommending these just making sure you are aware of your options. Please let me know if I am calculating anything wrong but my projection for one year is about $8.4k per house (assuming no maintenance is needed) I would say you estimated profit is on the high side.  Not being involved in your market it will be a wild guess but I would expect you to realize cash-flow per house per year of closer to $7,000.  Maybe even lower given your inexperience.  Some Costs you need to remember to account for: Taxes, Insurance, Vacancy, Repairs, CapEx, Property Management, Utilities, Lawn Care, Snow Removal, HOA Fees. All-in-all expect 50% or your rental income to be spent on the property.  If you do well you can be pleasantly surprised. With an investment, you tend to buy it for a very specific purpose, namely to make you some money. Either via appreciation (ie, it hopefully increases value after you take all the fees and associated costs into account, you sell the investment, realise the gains) or via a steady cashflow that, after you subtracted your costs, leaves you with a profit. Your primary residence is a roof over your head and first and foremost has the function of providing shelter for yourself and your family. It might go up in value, which is somewhat nice, but that's not its main purpose and for as long as you live in the house, you cannot realise the increase in value as you probably don't want to sell it. Of course the remortgage crowd would suggest that you can increase the size of the mortgage (aka the 'home atm') but (a) we all know how that movie ended and (b) you'd have to factor in the additional interest in your P&L calculation. You can also buy real estate as a pure investment, ie with the only objective being that you plan to make money on this. Normally you'd buy a house or an apartment with a view of renting it out and try to increase your wealth both due to the asset's appreciation (hopefully) and the rent, which in this scenario should cover the mortgage, all expenses and still leave you with a bit of profit. All that said, I've never heard someone use the reasoning you describe as a reason not to buy a house and stay in an apartment - if you need a bigger place for your family and can afford to buy something bigger, that falls under the shelter provision and not under the investment. "Yes, a HELOC is great for that. I just had my roof done last month (~$15K, ""ugh"") and pretty much every major contractor in my area had a 0% same-as-cash for at least 12 months. So that helps - any balance that I don't bank by 11/15/2015 will be on the HELOC."