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Cash Flow

Definition: The money moving in and out over a period, and what's left over.

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Cash flow is the movement of money in and out over a period. Positive cash flow means more came in than went out; negative means the opposite, regardless of how wealthy you look on paper.

It is the companion to net worth, and the two answer different questions. Net worth measures accumulated position; cash flow measures whether this month works. Someone can be asset-rich and cash-flow negative — a common and genuinely dangerous combination, because it forces borrowing or selling to cover ordinary expenses.