What is your goal? Do you want to be secure in your finances or do you want to become rich and have all the freedom you deserve?
Do you already know which logical next step you have to take to go to the next level of your financial life? First thing you have to know is where you are NOW in your financial situation!
Key question to consider:
Do you have earned income, self employed income, business income, investment income or a combination of income? The cashflow quadrant of Robert Kyosaki gives you insight where you are right now.
The quadrant is divided in four types of people.
(E)mployee: an employee has a job. The core values of an employee is looking for a secure job.
(S)elf employed person: a person who owns a job. Small business owner who do it by themselves. These persons operate solo.
(B)usiness owner: a person who owns a system. Big business with more employees. The business has a system and network. People work for these people.
(I)nvestor: money works for this person
Characteristics of the type of persons in quadrant E and S:
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Core value is security
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Poor
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90-95% of the population falls in this category
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5-10% of income is earned in this category
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Active income, if a person in quadrant E and S stop working, there is no income
Characteristics of the type of persons in quadrant B and I:
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Core value is freedom
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Rich
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5-10% of the population falls in this category
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90-95% of income is earned in this category
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Passive income, which is income earned from asset(s) (business, real estate) and investment
A person in the E quadrant has a job. At the end of the month receive active income to pay expenses. Self employed people has self employed income. Self employed people receive income only when they work.
Rich people also have expenses, the advantage is that their income covers their expenses. These people continue to buy assets which generate more income for them.
The cash flow pattern of the rich is to build assets that create passive income, which in turn pays expenses. The amount of money earned does not count. The term rich refers to the cash flow pattern only.
“The poor and the middle class turn cash into trash, or liabilities. Meanwhile, the upper class buys things like stocks, real estate, and businesses, turning cash into assets” ~Robert Kyosaki~
To be financially free you have to enter the B and/or I quadrant! Your goal should be to own a system and/or to become an investor and generate passive income stream(s).
FI tips:
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Choose daily to be rich and spend your time wisely
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Increase your assets
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Increase your financial intelligence to make and keep more money
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Decrease your debts
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Know where your money is going. Keep a record of your finances, which will also help you to make your financial decisions
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Do you spend your money on assets or liabilities? Be aware of that!
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Define new goals to get you from where you are now to where you want to go
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Focus and master one skill and than go to the next
“Most people fail to realize that in life, it’s not how much money you make, but how much money you keep” ~Robert Kyosaki~
