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. It is crucial to view a website page in order to learn more about these issues.
Essentially, if you want to make more money as an individual then you have to be in control of the amount of money you make. 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.
An employee occupies the first quadrant. 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 suffer a number of tax disadvantages, compared to those people who own business. Employees lack the leisure to lay off most of their tax burdens as they are normally controlled and governed by their employers.
The second cash flow quadrant involve the small business owners, having a small business, mostly results to a substantial reward to the owner. The main problem with being an employee or self-employed is that you are directly swapping time for money, and when you aren’t swapping your time, you aren’t making any money. There is a great compromise on your financial stability as you are only able to earn by exchanging your valuable time.
The third quadrant normally involves big business owners. 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. They often choose to invest more capital so as to earn more than employing less capital. Big business owners are thus able to secure on their sources of income as they have a wider variety.
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. They normally invest on big plans and ideas. it involves few people as it requires great capital.
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