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. It is crucial to view a website page in order to learn more about these issues.
For you to make more money as a person, then you are required to think outside the platform of being employed. Having your own business is key, whereby you are able to control your own paycheck rather than letting another person determine what your income will be and when to get it. The different cash flow quadrants enables a person in making wise decisions on his current positioning and his future.
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 suffer a number of tax disadvantages, compared to those people who own business. This is because the owners can write off some of their tax liability and actually lay it on his employees.
Small business owners normally occupy the second quadrant. Unfortunately most of the owners of this kind of business end up by trading their own piece of work for a job that in most cases don’t offer a regular pay or any kind of security per say. 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. Big business owners are thus able to secure on their sources of income as they have a wider variety.
Here in the last quadrant involves different investors. An investor is a person who allocates huge capital with expectations of future financial returns. An investor puts capital as a foundation to future earnings. It involves a lot of risks and thus has very few participants.