These 2 words are most often heard of from someone who indicates the interest in real estate, namely, investor and a flipper or speculator. It is important to have the necessary financial education before we can understand why we choose to invest in the long term, rather than selling off your properties in the short term when we go for the profit.
People who flip properties are purely going for capital appreciation. They are not going for positive cash-flow. While it is true that they do make a certain amount of profit after holding the property for some time, the amount they make may not be really that much as many people do not consider the bank interest rates that they have paid, other expenses, etc. Thus, the net amount of profit they make may not be significant.
On the contrary, people who invest for cash-flow rather than capital appreciation go for long term gains. Its like having the goose that lays golden eggs. As long as the goose is alive, it continues to lay the golden eggs. Because of greed, we may be too impatient and end up killing the goose and hope to dig out all the golden eggs, only to find nothing inside. So true investors go for the long haul and continue to make passive income. In time to come, they would have built an empire so rich that achieving financial freedom is something very achievable. One objective, two outcomes; positive cash-flow and capital appreciation. Awesome!