This is the everyday scenario that many of us encounter. But in spite your hard work, you have one question in mind…
Why Are You Not Getting Richer?
Let me tell you,
You Are Working in the Wrong Cashflow Quadrant.
The way you are earning your money is not capable of giving you passive income. Seems confusing right? You work your ass off everyday but you don’t get richer? Don’t be confused because the next illustration will explain what I am talking about.
e – employee quadrant
s – self employed quadrant
b – business quadrant
I – investor quadrant
This Figure is called the Cashflow Quadrant which I learned in Robert Kiyosaki’s famous book, “Rich Dad’s Cashflow Quadrant – Guide To Financial Freedom”. If you have read my About Me page, I gave a glimpse in there on how I bumped into Kiyosaki’s books and how it changed my way of thinking about money and work.
This Quadrant, once thoroughly elaborated will make you think about your current job. And it will also make you think if you still want to stay on that the same work routine everyday of your life.
In Less than 7 minutes, you will definitely understand the meaning of these letters and what it represents.
The 3 Illustrations below will give the summary of the differences in core principles of people in different quadrants.
1. HOW YOU DEAL WITH MONEY
Here’s what people usually say when it comes to money and work.
With the varying words from the varying quadrants, you can say that they have different core values.
They want to feel secure and see it in writing.
Oftentimes, S doesn’t like to have his or her income dependent on other people.
B – BUSINESS QUADRANT
B likes to delegate work.
I – INVESTOR QUADRANT
The I quadrant is the playground of the rich
2. HOW YOU EARN MONEY
Here are the signs that you are working for E, B, S or I Quadrant.
E – EMPLOYEE QUADRANT
You earn monthly income. You also have a boss that takes control of you. Most people are in these quadrant.
S – SELF-EMPLOYED QUADRANT
You are the boss and employee as well. Your income depends on your working time. This means that if you don’t work, then you will have no money. Example of people in this quadrant are the professionals like doctor, engineer, lawyer.
B – BUSINESS QUADRANT
You are the boss but you like to delegate work. You manifest other peoples skills to work for you. This means that even if you don’t go to your work every single time, you can still earn some money. This is where everyone of us should be working.
I – INVESTOR QUADRANT
In this quadrant, instead of you working for money, money works for you.
3. HOW FREEDOM IS ASSOCIATED WITH YOUR MONEY
Every work that you do has its own results. This illustration will show you what results you will get from each quadrant.
As an Employee, you remain running like a hamster in a hamster wheel.
As Self – Employed, Your time is not enough to sustain funds.
As Business Owner, You can Spare some time drinking coffee at Starbucks.
As Investor, Money is Not a Problem
THE MAJOR DIFFERENCE
The Major Difference for the Quadrants are the kind of income they earn. E & S have Active Income while B & I have Passive Income. (Active Income – No Work, No Money; Passive Income – No Work, Still has Money)
Now that you already know what each quadrant represent, It is Clear that B ad I Quadrant makes a huge difference in terms of earning money.
With all of this being presented, I suggest a path the you should take to attain financial freedom.
THE PATH I RECOMMEND
If your an Employee at the present time, Shift to the Business – Owner Quadrant
If you are Self – Employed, Shift also to Business – Owner Quadrant
If your already in Business Quadrant, Shift to Investor Quadrant
Given with the Benefits and Privilege of B and I Quadrant, It is clear on what you should really do.
Start Earning Passive Income – Think Like Billionaire!
Now that you already know what path you should take, the next question is
How Will You Get There?
My next post will tell you the Steps on How to Create Passive Income from Scratch.
Check out the #1 Recommended Work At Home job for beginners!
If you have questions and concerns, just comment it below and I’ll be happy to answer your questions.
Let me hear your experiences on the comments below!
What a mad article on the secrets of passive income – I have to admit I was a little confused at first but I got there in the end! 🙂
A great way to look at succeeding with some sort of passive income. Tell me, where did you learn all this? Is there an online school somewhere that covers it?
Hi Chris! Indeed, Passive income is the way to financial freedom. I learned all of this great lessons in Robert Kiyosaki’s book, “Rich Dad Poor Dad”. It’s a great book explaining everything about money and how you should deal with it. Honestly, I don’t like reading but the moment I started reading it, I got hooked. Maybe because its all about money. haha Have you heard of the book before? You know what I can give you a free ebook if you want. Just email me at firstname.lastname@example.org and I will send it to you for free 🙂 . It’ll be my pleasure to help you.
Great article, John.
But I think it will not be easy to move from active income to passive income as long as you still have debts or mortgage to pay. Because you need to invest your time (outside your 9 to 5 job) and invest your money ( although it’s not as much as if you build brick-and-mortar business) to build a business online from zero to profitable one.
Anyhow, it worth to try. Just do your best and keep motivated, then you will achieve your goals.
Thanks Hayu! Yeah it will not be easy, but it will be all worth it. Yes debts can be frustrating, because you still have to pay them every month. But, it is not a hindrance. It is just a matter of budgeting your money, in a way that you can still save for your future passive income investment. I have written a post about how you can shift from active to passive income. If you have time, Check this out: How to Live on Minimum Wage and leave on the comment box your thought about it.
Thought provoking information you have here…I like the direction you take with your post, and believe that everyone should follow that direction. I have been in a situation where a lot of my eggs were in the business basket, and the last big economic meltdown/crisis caused me to lose a heck of a lot…
Fortunately I had the passive income in place to a lesser degree than what I would have liked, but it is there and I am still availing myself of it while building back up again on the business side….
Thanks for sharing, I believe I have read something similar to this elsewhere, or maybe it was a Tony Robbins interview…So right on target with the gist of what was shared!
Hi Dave! Thanks for appreciating the direction that I suggested for everyone to take which is to shift from active income to passive income. Actually, my inspiration about my post is the Book of Robert Kiyosaki, The rich dad poor dad. it is very inspiring and highly motivating especially in attaining financial freedom. anyway, About the business that you just said, if you don’t mind, what passive income business do you have?
Hey John. I read the book long time ago but it was only a last month that I started to move. I like very much the way you related the book with the action.
Thanks you! The book is really inspiring right? by the way, on what way did you started to move? I mean, what steps did you take? Is there anything that I can help you with?
just came across by chance. Thanks! As a change option, your scheme does make sense. I have done it intuitively for myself. But working in the service industry in Switzerland, it is really hard to move from S to B, not to speak of I.
I have to look for other options. Any idea?
Hi Stefan, I am sorry for the late reply. Yes, it is hard to shift from S to B, but it is possible right? As for me, I am also still having a hard time moving to the B side but I am still giving my time to build it. So about the business idea, why don’t you try this Affiliate Marketing Training that I am using right now. I am still on my 3rd week and so far I have learned so many things. And I tell you I didn’t spend money joining there free membership. I have written a review about it, It’ll just take 5 minutes for you to finish reading it. Feel free to comment your questions. Or better yet just email me on my email address if you really want to be enlightened.
What a great article – really easy to understand with your diagrams and I like the fact you’ve made a recommendation on what our mindset should be when starting an online business.
I think I need to have a read of Rich Dad, Poor Dad if you’ve based a lot of your website on its teachings, its obviously a very interesting read!
Hi Sammi! Thanks! Indeed, Robert Kiyosaki’s books especially rich dad poor dad influenced my way of thinking. definitely, you should make some time reading it, its very interesting and its all about managing your money. Hope to work with you! More Power!
I really like this blog post about mindsets John. A lot of us were born with the idea that we have to study hard and then find a well paid job (which is hard nowadays) and work hard.
Some of us don’t even stop to ask ourselves about what we really want to do or if we can make any kind of changes. I think it’s sad and the world could be a much better place if we were educated for success.
But that’s how life goes and I appreciate people like you who spend time to write these to help others.
Hi Anh! Thanks! Mindset is always the key. And I really like to share to people what passive income can make to our lives. I hope people will realize that being rich is not impossible as long as you persevere. More Power to you!
Like most people i realize that the past few years, only cost of living goes up but not salary so l thought why not make money online, but i diod not know whaere to start, doing some reviews brought me to your site,.
You have explained passive income so well that i must admit im tempted to believe that even me can succeed with passive income.
I like the way you have illustrated things,you have given me a real confidence boost thanks so much i feel ready to try passive income, if not full time then to supplement my income for now.
Im very glad that you appreciated the message that I want to convey. Passive income really makes the difference. It gives you more of everything. Though it is not that easy to attain it, it is definitely possible and attainable. I am planning to post more in depth explanation and concrete steps on how to make passive income especially online. More Power to You!
Interesting article. I have never read Rich Dad Poor Dad, but looking at this article perhaps I should.
It is an interesting concept, but quite difficult to put into action. It should be most peoples long term goal. I am self employed and am in process of moving into the b quadrant so I know I will get there.
Hi Michel! Yes, you should definitely read Rich Dad Poor Dad. It will show the reality of money and job. You got it right that it is quite difficult to put into action but is always POSSIBLE. Its a process so, just be patient. Always Remember, “Work Smarter Not Harder”. If you want I have a link of a free ebook of Rich Dad Poor Dad.
Loving your article and clever use of the Cashflow quadrant! I recognize that anywhere, its from Rich Dad Poor Dad right? Its one of the things that made me want to start a business, especially the part where a huge percentage of the world’s profits belong to entrepreneurs. I love your site and the way you write, do keep them coming! I bookmarked your site, will be coming back soon 😀
Thanks Riaz! Yeah, It is from Rich dad Poor Dad. Robert Kiyosaki’s book really influenced my way of thinking about jobs and earning money. Have you read the book yet? It’s really awesome and brilliantly eye opening.