Capital gains and cashflow are the two major ways of getting paid from your assets.

Capital gains occurs when you sell your asset for a higher price than you bought it. You instantly get your profits, and if you play your cards right, these profits are usually huge.

An example of a business that depends on capital gains is flipping of houses. You may buy a house for $50000 and sell that same house for $70000. In this example, your capital gains were $20000.

Cashflow on the other hand is another way to get money off of your assets.

Unlike capital gains which is a one time deal, cashflow can keep on coming in as long as you hold that asset. An example of cashflow from an asset is dividends from shares of stock.

Assume that Apple pays $1 dividend per share owned.(Apple doesn't pay dividends, and dividends are usually not this large)

Let's say that Apple stock is $200 per share. And you bought a hundred units at $20000. When dividend payments arrive, your total cashflow amount would be (100 units * $1) $100. As long as you hold Apple stock, this $100 will be paid to you, regardless of what the market is doing.

Cashflow isn't usually as large as capital gains, but overtime with compounding interest can be more lucrative than capital gains.

With that out of the way, which one is right for you, the investor?

Especially in crypto?

Well, as you might have guessed, in crypto capital gains are obtained through trading the cryptocurrencies, while cashflow is obtained through staking.

I'll tell you what. Capital gains is best for those without a bunch of money to blow on crypto. Imagine if you had only $50 to start with. Getting 5% per annum staking your $50 would amount to $2.5 every year. While trading, you can get that same $2.5 give times in the same day if you know what you're doing.

Staking is better suited for those with large amounts. Say someone staked $10000 worth of Tezos in a Trust wallet. These wallets pay about 6.2% per annum. That would amount to $620 risk free every year, and this interest is paid daily.

Whichever one you go for depends on your type of person. Do you have time to look at charts all day, or do you have a bunch of money that you want to work for you while you keep your day job?

Those factors will determine your choices.

Thanks for reading!