Cash Flow Quadrant

A simple diagram that illustrates the four types of people that exist and how they earn their income. The four quadrants are made up of the world’s Employees, Self-Employed, Business Owners and Investors. 

Employees – An employee exchanges their time and effort for money. If you are in this quadrant, you seek a feeling of security above all else. You want a steady paycheck for a set amount of money at a regular job. Certainty is part of what makes you happy. Something an employee might say is, “I’ll work 40 hours a week doing X if you promise to pay me Y in return.” The idea of security is often more important than money. 

Self-employed – You are your own boss and like to do things your way. You’ve mastered your craft and believe in being paid well for it. And when you do get paid, you want to be in control of your money. The biggest drawback, however, is when you’re not working (vacation or get sick), you’re not getting paid. 

Business Owner - You surround yourself with smart people from all four quadrants. You delegate and hire smart people to do the execution of your ideas so that you can focus on creating more assets. It’s the implementation of systems (legal, accounting, sales, marketing, etc.) that allow you to step away from the day-today operations and still run a successful business. The opportunity to become a business owner is sometimes harder to spot, but I’m going to give you some examples of how you can start your own businesses shortly. 

Investor - You make money with money. You do not have to work because your money is working for you and multiplying on its own. The money you invested into a business (not necessarily your own) increases even when you’re not working. 

Investing as a kid may seem a little intimidating but with the help of an adult you can also earn this kind of income. There will be more on this quadrant later in the book. 

Many children start their business in the S quadrant as a sole-proprietor. They then develop their business into a larger cash-flowing business. Don’t limit yourself to the S quadrant, however. Consider how Mike and I included his sister. Who else can help you reach your goals? This will move you into the business quadrant where you can make money much faster. 

Would You Like to Learn More About a Business Opportunity that Has The Potential to Replace Your Current Working Income Without Quitting Your Job?

You really ought to try it, either full-time or over weekends. We have a great business opportunity. You can run it from home full time or part time, or any combination.

Click Here to Learn About a Business Model That is Proven Successful with Low Start-up Costs.