Your Salary Keeping You Poor?
Pity those who say “I will work hard and earn lots of money”.
In the real world, there is no real relation between the amount of work you do and the money you earn. By this logic, a construction worker should be richer than a professional or businessman.
The concept of earning money best explained by author Robert Kiyosaki in his Rich Dad’s Cashflow Quadrant.
The CASHFLOW Quadrant is divided into four types of people, two in each category. Where we can fit most of the professions that exist in the world.
Employee: At the end of the day, the most important thing for employees is security.
Because employees shy away from risk, they don’t see the need to learn about money or how it works. For them, education is about learning the skills needed to get a steady, high-paying job with great benefits.
“When employees need more money, they look for a higher-paying job”.
Self-Employed: People in the S quadrant are doctors, lawyers, dentists, accountants, and other service-based businesses and consultants.
They have very high standards for their work and because of this, they have a hard time delegating to others. Again, they don’t like to hire employees because nobody does it better than them. As a result, they only make money when they are working.
“When self-employed people need more money, they look for more hours they can bill”.
Business Owner: Business owners are often seen as risk-takers. They own a system or a product that makes money even when they aren’t working.
Because they know they can’t be successful on their own, business owners look to hire people who specialize in the skills needed for the business and hire those who have more talent and skill than them. They look to delegate as much as possible, not keep all the work for themselves.
“When business owners need more money, they create a new product or create or acquire a new system that produces money”.
Investor: The richest people in the world are investors. Investors have the highest financial education of anyone in the CASHFLOW Quadrant.
They are adept at finding assets that provide a steady income in the form of cash flow and they often use other people’s money to attain those assets. They then use the income from those assets to acquire even more assets, growing their wealth through this velocity of money.
“When investors need more money, they look for an opportunity to acquire an asset that produces more passive income”.
The sad reality is that E’s and S’s tie earnings to the number of hours they work, pay more in taxes, and pay more in interest on the debt for liabilities the more they make.
“It is a vicious cycle that keeps them feeling poor”.
B’s and I’s work for passive income, the least taxed income. They have many tax breaks in the tax code they can use to their advantage.
In the long term “how much money you make does not make you rich. Rather, how much money you keep is what makes you rich”.
I encourage you to begin changing your mindset. Starts with Investing in assets that produce passive income rather than living in a pattern of paycheck to paycheck.
Start small, have patience, and watch as your wealth grows over time.
“Remember: A salary is a drug you receive every month, to forget your dreams”.
