Ways To Have A Source Of Income.
The book rich dad poor dad involves the concept of the cash flow quadrant, the four different cash flows include; employees, small business owners, big business owners and investors. In order to learn more about these issues, you may need to view a website page.
Essentially, if you want to make more money as an individual then you have to be in control of the amount of money you make. Creating your own business is key to make more money. In looking at these different categories of making money, you will be able to have a clear picture of your current position and with regard to the different categories look at where you would like to position yourself in the future in accordance to the cash flow quadrant.
The first quadrant involves the employee. This quadrant is the most common way to make money as it is regarded more secure but in real sense, it involves making the rich richer. Employees suffer a number of tax disadvantages, compared to those people who own business. 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.
In the third quadrant we have big business owners. The greatest limitations experienced by small business owner is the limit of time as there is always a ceiling to their earnings this is what normally separates the small business owners to the big 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. 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.
Here in the last quadrant involves different investors. An investor is a person who allocates huge capital with expectations of future financial returns. He or she puts money behind an idea or a project to enable it to grow and run swiftly so that in the long run it can give birth to profits. it involves few people as it requires great capital.
Attributed by: my sources