I was listening to the audio book ‘Cash Flow Quadrant’ by Robert T. Kiyosaki. I must say this is an amazing book and a must read for the people who would like to change the financial position. This book talks about financial security vs financial freedom and the mindset of employee vs business person.
In this book, Kiyosaki talks about four (04) types of professionals and put them into 4 quadrants:
E = Employee
S = Self employed/small business owner
B = Big Business Owner
I = Investor
Employee has got the job security whereas the ultimate financial freedom is enjoyed by the Investor. Question is: which one do you prefer? Remember, ‘jail’ is the most secured place in the world 🙂
If you are E (an employee), you just have a job whereas if you are S (self-employed) you own a job. Self-employed people works even harder than employee because if they do not work, money stops coming (for example, doctor, lawyer, consultant, small business etc). This is why being self-employed is not good enough. This is why you need to try to shift yourself towards B (Big Business) where other smart people will work for you and you won’t need to rely on your own efforts to earn money. And the ultimate quadrant is to shift towards I (Investor) zone which can give you ultimate financial freedom.
People from left side of the cash flow quadrant either works for others or works for themselves. On the other hand, people from right side of the cash flow quadrant build assets and invest in already existing assets as money generates more money for them.
In single word, all these quadrants represent Security (when you are an employee), Independence (when you are self-employed), Wealth Building (when you own big business) and Financial Freedom (when you become an Investor)
As an employee: Income = you X job whereas as a businessperson: Income = you X people. Ask question to yourself: do you want to work hard to make money or do you want to build a system that makes money for you?
So, take your time to read the book (or listen to the audio book) to find out more how you can make that transformation.