Finances: 10 Mistakes that Most People Make

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. This is why you need to browse through a website page to learn more about how these steps are accomplished.

For you to make more money as a person, then you are required to think outside the platform of being employed. 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.

The first quadrant involves the employee. 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 normally have great tax burdens compared to business owners. 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. 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. 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. 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.

The fourth and last quadrant of cash flow includes an investor. 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.