News For This Month: Finances

Different Ways To Make Money.

You might have heard of the book “Rich Dad Poor Dad” as it is one of the most read and familiar books as it brings out four different structures where people make money, this structures are referred as the cash flow quadrant as it involves employees, small business owners big business owners, and the investors. In order to learn more about these issues, you may need to view a website page.

Essentially, if you want to make more money as an individual then you have to be in control of the amount of money you make. Creating your own business is key to make more money. In looking at these different categories of making money, you will be able to have a clear picture of your current position and with regard to the different categories look at where you would like to position yourself in the future in accordance to the cash flow quadrant.

The employee is in the first cash flow quadrant. An employee is the most common way of making money for most people even though it is the most in effective way to make money as it is less secure and that the employees trade their valuable time to benefit the employers. Employees suffer a number of tax disadvantages, compared to those people who own business. This is because the owners can write off some of their tax liability and actually lay it on his employees.

Small businesses do involve substantial earnings to their owners. The main problem with being an employee or self-employed is that you are directly swapping time for money, and when you aren’t swapping your time, you aren’t making any money. In this case your financial stability is always at stake, because at times you will not be in a position to offer your time for money, as you may be sick or attending to an emergency, or even you wanted to take some time off for vacation.

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In the third quadrant we have big business owners. Big business owners have greater sources of income compared to small owners and this separates their proceeds. They often choose to invest more capital so as to earn more than employing less capital. On this way the big business owners are able to earn more and secure on their source of income.

An investor occupies the last quadrant. An investor is a person who allocates huge capital with expectations of future financial returns. An investor puts capital as a foundation to future earnings. it involves few people as it requires great capital.

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