Different Ways To Make Money.
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. Having a glance at these different platforms of earning, will enable you as a person to have a better outlay of your position and where you would like to get placed in the 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. Employees suffer a number of tax disadvantages, compared to those people who own business. Employees lack the leisure to lay off most of their tax burdens as they are normally controlled and governed by their employers.
Small business owners normally occupy the second quadrant. 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. 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 have greater sources of income compared to small owners and this separates their proceeds. 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. Big business owners are thus able to secure on their sources of income as they have a wider variety.
The fourth and last quadrant of cash flow includes an investor. 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.
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