One of the most read and familiar economist book by the name “Rich Dad Poor Dad” presents a clear concept referred to as the cash flow quadrant where it illustrates four major ways in which people generate a source of income; employees, case of small business owner, big business owner and the investors. It regard this four categories as one of the main sources of income. In order to learn more about these issues, you may need to view a website page.
For you to make more money as a person, then you are required to think outside the platform of being employed. Making more money as a person goes hand in hand with starting your own business and avoiding being employed. The different cash flow quadrants enables a person in making wise decisions on his current positioning and his future. Visit the official site for more awesome info.
The first quadrant involves the employee. Being an employee is the most common way of getting a living for most people as it is the most common and simplest way to make money, yet often the most ineffective way to make an income as the employees trade their valuable and limited time for money and the employer takes the advantage. Employees normally have great tax burdens compared to business owners. Being on this cash flow quadrant limits you as person on your financial and career growth, however it also has some great benefits as it is one of the most secure, most stable, safe and most common way to make a living. Click for more ways of to have a source of income.
The second cash flow quadrant involve the small business owners, having a small business, mostly results to a substantial reward to the owner. The main problem of being an employee or self-employed to your own business is that you are directly trading your time for money, and when you aren’t trading your time then as a result you don’t make money. In this case your financial stability is always at stake, because at times you will not be in a position to offer your time for money, as you may be sick or attending to an emergency, or even you wanted to take some time off for vacation.
The third quadrant normally involves big business owners. Big business owners normally don’t have a ceiling to their earnings as they are not limited by time compared to the small business owners. The big business owners normally establish systems to create their wealth, for instance, instead of selling ice cream on the roads by exchanging their time for the job to earn, they will invest on some good capital to buy five different ice cream tracks and thus employ people on those tracks. Big businesses owners have a wide source of their income for instance they would always choose to invest more to a business and earn more from employees than employ themselves for their limited time. On this way the big business owners are able to earn more and secure on their source of income.
An investor occupies the last quadrant. An investor is the person who will put their finances in a project in hope for a good return. An investor puts capital as a foundation to future earnings. It involves a lot of risks and thus has very few participants.