What does matter is finding new products and processes that change the value of the future
free cash flow stream.
Not exact matches
So now we have a guaranteed lifetime income
stream, and the other 50 - 60 %
cash which is
freed up (because of the increased annuity
cash flow) can be put into the market - and so what if you lose a little - vs the gains possible.
Both types of securities deliver a
stream of
cash flows to investors; stocks generate
free cash flow from their operations and make dividend payments, while bonds make interest payments and / or return principal upon maturity.
One of the key inputs to valuation is the risk adjusted cost of capital applied in discounting the future
cash flow streams, whether it be applied to dividends or the company's
free cash flow.
The goal is to find a reasonable price for a future
stream of
cash flows and compare it to a risk -
free rate of return, usually US treasuries.
With a steady revenue
stream — backed by more than 136.5 million subscribers to its wireless and other services — the firm produces abundant
free cash flow (the
cash profits generated after making the capital expenditures necessary to maintain the business).
Money today can be turned into a tax advantaged
stream of
cash flow, or even a tax
free death benefit many years down the road.
Once I have that
cash flow stream secured I'll have some
free time to figure out stocks.