Cash Flow Quadrants: Employee, Specialist, Business Owner, Investor
No matter who you are, or what you do, your income comes from 1 of 4 sources.
Robert Kiyosaki has aptly dubbed this concept, the Cash Flow Quadrants.
These 4 quadrants break down into 2 groups… Active Income Versus Passive Income.
1. The first quadrant of income is the Employee quadrant. This is the quadrant where most people start their careers.
As an Employee, “You have a job.”
In the Employee Quadrant, income is capped by a hourly wage or a predetermined salary.
Employees exchange their time for dollars. And they do this repeatedly – either through one job or multiple jobs – until they join one of the most famous clubs in the world… Club 40, 40, 40.
They work for 40 hours a week, for 40 years, and when they retire they get paid 40% of their income as retirement.
Some people in this category wise up and move themselves to the next category…
2. The Self Employed or the Specialists.
This category covers everything from doctors, to lawyers, to accountants, to “Mom and Pop” retail stores and everything in between.
Most people in this category believe that they’re business owners, but it couldn’t be further from the truth.
If you ask them, they’ll tell you that they don’t work for anyone but themselves. They control their time, they have their own location, and they can earn much more than someone who works at a job.
And all of that is true.
However…
There is a simple question that can determine whether or not someone is a true business owner:
Can you walk away from your “business” for a year… don’t make a single phone call, don’t do a minute worth of work… and come back to find that your business has grown without you, and made more money?
Without fail, every single one of them will answer you with a resounding, “No!”
The doctor needs to see his patients… the attorney needs to meet her clients… the Mom and Pop shop owner has to open the store.
People in the Self Employed/Specialist category own their jobs.
They still have to work in order for them to get paid.
3. Then we have the Business Owners.
True Business Owners can answer the previous question with a firm, “Yes!”
Business Owners are more focused on delivering value through infrastructure and systems, rather than their personal time and effort.
As a Business Owner, your systems work for you.
There are really only 2 ways to become an official business owner…
- Buy an already established business with the proper systems and infrastructure.
- Build a business that’s truly dependent on systems instead of you.
4. And finally, we have the Investors.
Investors make their money work for them.
They invest first in themselves in order to grow their knowledge base.
Then they invest in their portfolio to grow their net worth.
They then invest in various income options so that they have consistent cash flow.
How to Switch From an Employee/Self Employed Person to a Business Owner/Investor
The great thing about the modern era is that technology has made it possible for anyone with any background and budget can incrementally move towards financial independence.
Simply put…
You can start small and grow to be a full fledged investor or business owner.
Start with a few hours a week and build systems and infrastructures.
Eventually, the systems that you’ve built will begin to pay you the same income that your job or self employment will pay you.
Except the income from your business will be passive and will continue with or without you.
Once you’ve developed your passive income to get to the point that you can buy your time back, then you can dedicate more time and energy to amplifying the income that you’re earning from your business.
And once you’ve saved enough money to invest properly, you can then buy portfolio or income investments and keep growing your financial capacity.
If you’re interested in expanding your Cash Flow into the Business and Investor quadrants, visit www.armanvakili.com/freebies and fill out the form at the top of the page to request a Free Business and Financial Strategy session valued at $2,700.
Want to Buy Back Your Time & Energy? Click Here –> to request a free business planning session with either myself or one of our licensed coaches, valued at $2,700.
