Ways To Have A Source Of Income.
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.
An employee occupies the first quadrant. An employee is the most common way of making money for most people even though it is the most in effective way to make money as it is less secure and that the employees trade their valuable time to benefit the employers. Great tax burdens are laid to employees rather than to employers. 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.
Small businesses do involve substantial earnings to their owners. The main problem with being an employee or self-employed is that you are directly swapping time for money, and when you aren’t swapping your time, you aren’t making any money. There is a great compromise on your financial stability as you are only able to earn by exchanging your valuable time.
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. They often choose to invest more capital so as to earn more than employing less capital. This way they are able to leverage and have a system set and secure to have a source of money, the catch is that not everyone is able to raise enough capital that will enable him to start a big business and be able to run it.
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 few people as it requires great capital.