Welcome back friends. The very fact that you are reading
this shows your seriousness to make a change. I congratulate you on your
decision.
Let me start by asking you 2 questions.
1.
What is that amount X if you had today, you
would decide I don’t have to work anymore. Please come up with a specific
figure (e.g. 5 million USD, 5 billion USD… )
2.
How many hours you have in your entire life time
to reach your target? (Don’t take 24hrs a day as realistically we work 8-10
hours/day)
While you come up with the answers to the above, let us see
what the available earning options are. To address this I will use Robert T.
Kiyosaki’s Cashflow Quadrant.
Primarily the world’s legally earning population can be
divided into these 4 quadrants.
1.
Employee: The first quadrant is Employee.
Employees are people who trade their time for money and work for
businesses/companies not owned by them. These are people who are in jobs and
get a fixed salary for a fixed amount of time spent on the job. Occasionally
overtime as well. Here one is assured of a secure and constant income every
month. But what happens if we are not able to put in anymore time due to
reasons beyond our control e.g. God forbid we meet with an accident or have a
serious medical condition or due to recession we lose our job. The Income
stops
.
2.
Self Employed: These are people who work for
themselves e.g. Doctors, lawyers, actors etc. Even the small shop owners come
in this category although they call themselves businessmen. That’s because even
if they keep their shutter down for a few days their income dips. This group of
people like the first group exchange their time for money but they work for
themselves rather than for others business. Here the pressure is even more as
they have to play both the roles of finding work and executing it. If they are
not able to find work or work for some reason as stated earlier, their income
stops.
3.
Businessmen: These are people who have built big
business and have set processes in place so that even if they are not there
physically the business can run on autopilot. Here we are talking of people
like Bill Gates, Jack Welch, etc. The thumb rule is they have more than 500
employees on their roles else they are still categorized self-employed.
4.
Investors: These are people who have enough
wealth and use that to make more wealth. People like Warren Buffet.
90% of the world’s
population are in the left quadrant i.e. either employee or self-employed. The sad part is when we look at the wealth
graph. 90% of the population who are on the left quadrant share 10 % of the
world’s wealth, whereas the Businessmen and Investor who make 10% of the
population enjoy 90% of the wealth.
Ever wondered why?
The people in the right quadrant know a secret. The secret
is LEVERAGING.
They leverage on other peoples TIME, EFFORT, SKILL and MONEY.
Knowing the secret of leveraging is it easy for us to cross
over from the left to the right quadrant? Not easy you would say and I agree.
The first and foremost is we need big money to start a sustainable business.
Yes there are exceptional and inspiring rag-to-riches stories but then they are
rare.
So does it mean we don’t stand a chance to go to the right
side of the quadrant? Are we doomed to be either employees or self-employees?
I will continue the discussions in my next post.
Yes I have not forgotten the questions I asked in the
beginning. These are also addressed in my next post.
See you soon.
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