Different Ways To Make Money.
You might have heard of the book “Rich Dad Poor Dad” as it is one of the most read and familiar books as it brings out four different structures where people make money, this structures are referred as the cash flow quadrant as it involves employees, small business owners big business owners, and the investors. This is why you need to browse through a website page to learn more about how these steps are accomplished.
People who have control of their income, make more money than those who don’t. 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. Great tax burdens are laid to employees rather than to employers. This is because the owners can write off some of their tax liability and actually lay it on his employees.
Small businesses do involve substantial earnings to their owners. 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. 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.
A big business owner occupies the third cash flow quadrant as illustrated in the book “Rich Dad Poor Dad”. 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. 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. It is a person who invest greatly in projects so as to have great returns in the future. An investor puts capital as a foundation to future earnings. it involves few people as it requires great capital.