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To: Skeeter Bug who wrote (39415)	9/30/1998 2:41:00 PM
From: Ed Beers	Read Replies (2) \| Respond to of 53903

> ed, please explain this. i'm all ears. i depreciate my rental and it has never generated a dime for me. it has allowed me to pay fewer taxes. that is not positive cash flow. it is fewer expense. $1 billion times your tax rate is what it returns - when you make money. < Your rental should be a fine example. Assume you have a paid for house. Assume you get $20000 per year of rent Assume you depreciate the house at $20000 per year At the end of the year you will have $20000 cash in hand but your house is worth $20000 less (thats why we depreciated it) so you broke even and had $20000 of positive cash flow. Now borrow $10000 and spend $30000 putting an addition on your house and you have a business just like MU. Perhaps you are confusing positive cash flow with making money. You can make money while having a negative cash flow (common when you are expanding) or lose money with a positive cash flow. Ed