Cash Flow Potentials

While most of us were growing up, we were taught to go to school, get good grades, find a career and retire at 65. This model doesn’t allow any of us to get ahead! We spend our lives living paycheck to paycheck and hope that we’ll be able to rely on Social Security or our 401k carries us through our "golden years".

According to financial experts, we cannot rely on our 401k and Social Security to be there for us when we retire! And even if you could rely on them, would they really provide you with the type of lifestyle you’d really like to be living when you retire?

According to Robert Kiyosaki, did you know that 95% of the population manages 5% of the money? Well that means that only 5% manage 95% of the money! It depends on which side of Kiyosaki’s quadrant you are on the ES or IB?

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The truth is, the model of going to school, getting a career and retiring at 65 doesn’t work. If it did, you wouldn’t see so many seniors still working at 70+ to make ends meet! We’re going to explore another model – a model that does work!

In Robert Kiyosaki’s best selling books "Rich Dad, Poor Dad" and "CashFlow Quadrant", he explains how the rich don’t work for money – they get money to work for them. Let’s take a look at a model Robert Kiyosaki refers to as the "Cash Flow Quadrant".

E Quadrant

In the first quadrant, he assigned an E, which stands for Employee. This is the way that most of us make our money. Using this method, your life is controlled by the alarm clock. You have to go to bed at a certain hour so that you can get up when that alarm clock goes off. You go to work each day and trade hours for money. The problem with this model is that you have absolutely no way to get ahead! When you stop working, the money stops coming! To top it all off, as an employee you are paying more income taxes than any of the other quadrants and you’re in the highest tax bracket! You can always tell an employee by what they say... "looking for a safe, secure job and benefits".

S Quadrant

In this quadrant S stands for Self-employed. These are small businesses and specialists like doctors, dentists, plumbers, electricians, contractors, small retail outlets, attorneys, free-lancers, etc. These are the rugged kind. They look at what their employer is doing and believe they can do that too, maybe even better. They want to do it their way. So they start their own company and become self-employed.

This model can be very deceiving because you’re STILL trading hours for money... If you stop working the money stops too. In this quadrant, you don’t own a business; you own a job. The only difference is, you have slightly more control over how many hours you work and you receive very few tax breaks. This is one of the hardest quadrants because the employees pick on you as well as the government, i.e., tax problems and employee problems. This is where the small business differs from the big business.

Now lets take a look at others who have created their own big businesses such as Bill Gates, Michael Dell, Henry Ford and John D. Rockfeller. Each of them built networks and networks of systems. They hired smart people and as a result they were able to do more and more while working less and less.

The problem with the E and S side quadrants is that in order to make more money they often have to work harder. So the income potential for the E and SE quadrant is usually capped out at around the $30,000 to $65,000 a year income mark and the person in the S quadrant caps out at around $110,000 to $125,000 a year.

I Quadrant

Most people, when thinking of investing, gravitate towards the stock market. But the rich don’t invest heavily in the stock market; they put their money in other vehicles. This person makes their money work harder than they do. As an investor, you no longer work for money, money works for you.

B Quadrant

As a Business Owner, you’re no longer trading hours for money. Instead, you have a system built and people are working for you who are making you money – even when you’re not there! The B quadrant people can make more money than rock stars, sports stars, and movie stars if they get their thinking straight and set up business right. Their income potential is virtually unlimited because networks are unlimited.

So what are the four rules for success? The Four Rules for achieving success are:

1. You must work to acquire income-producing assets (such as B or I quadrants shown above) instead of trading your time for money! An example of an income-producing asset would be a soda machine. You make a one time investment, you have little or no overhead and it makes you money whether you’re awake or asleep. Home based business allow you the same freedom if done properly.
2. You must make the concept of leverage begin working in your favor. In other words, you need to STOP trading hours for money and begin leveraging your time and money!
3. You must be on the lookout for new major trends that you can get in front of and lead!
4. You must take advantage of tax laws to accelerate your progress! Keeping these rules in mind, we’re going to show you a business model that enables you to leverage your time and get ahead of the rat race!