How Do I Get Wealthy?
This was a super popular question that came up from my survey on what question you’d like me to answer. I know you may be thinking money isn’t everything… or you’re thinking maybe you’d just like a chance to prove money isn’t everything! LOL
Here’s the deal. I’ve been poor and on food stamps. I’ve lived in nice homes, driven fancy cars, etc… Yes, money isn’t everything but it sure does allow me to do more for my family, the community and others. Life’s a lot more fun with it! The motivation to create wealth doesn’t mean you’re greedy. It’s when you put money above all else that makes you greedy.
So for today, let’s talk about how to generate wealth by answering the question, “How do I get wealthy?”
I’m going to break this down using Robert Kiyosaki’s Cashflow Quadrant. It’s a simple tool to understand that can totally help put your financial situation in perspective and help you determine what you need to do differently to generate wealth.
So I’m gonna walk you through the tool first, then explain the importance of it and why I’ve made the decisions I’ve made in business!
Robert Kiyosaki’s Cashflow Quadrant
Obviously, the diagram consists of 4 boxes.
E – Employee
Most people choose to stay in the quadrant all of their lives. It’s very difficult to generate wealth here because as an employee, you’re trading your time for money. You can work more to make more money. You may get a promotion or a bonus but you only make money while you’re there . . . working.
S – Self Employed
This is where a lot of entrepreneurs start out. You work by yourself but also for yourself. This would include photographers, DJs, personal trainers, consultants, etc… While you have more freedom and can typically charge more, there is still the issue that if you don’t work you don’t earn any money… which kinda sucks, honestly. It’s a good start to move from employee to self employed because you can usually charge a little more and you work for yourself. The real con here is the trading time for dollars!
B – Business Owner
Now we’re talking! This is leveraged income because your hours aren’t the only thing that matter. This quadrant emphasizes a system to make money. Here you’ll find franchisees, network marketers, restaurant owners, etc… If you have built or plugged into a good system, then it will continue to run and create wealth even if you get sick or go on a long vacation. You get the feeling of time freedom here and financial freedom is way more possible!
The majority of the worlds wealthiest people, get wealthy from the B quadrant and then grow their wealth moving into the I quadrant.
I – Investor
Boom! This is where investors are. Money working for money. This can be investment in all types of assets like real estate, stocks, businesses, etc… Typically, people move to investor from business owner. Often times, they operate in both! When you generate wealth, multiple streams of income are important.
No one box is wrong but the topic for today is “How Do I Get Wealthy?”. The best ways to generate wealth are on the right side. Honestly, if your goal is to generate wealth, you need to be working your way towards the right side.
Personally, I’ve been in all 4 quadrants and now focus solely on B and I.
Kiyosaki claims that the two quadrants on the right own 90% of the world’s assets, so there you go! How do I create wealth? Find a business with a system that you can plug into that allows you to leverage others’ time too.
Here’s a great video of Robert Kiyosaki explaining the Cashflow Quadrant and how to use it to create wealth…
[youtube]http://www.youtube.com/watch?v=yywKO_xqXIY[/youtube]
Moving from One Quadrant to Another
So You Can Generate Wealth
E – If you’re an employee, I recommend making your way to self employed and/or business owner.
Kiyosaki recommends moving from employed to self employed then on to business owner (see diagram below). With the network marketing industry as evolved as it is today, I highly encourage you to skip this step or to do it in conjunction with moving directly to business owner. Network marketing companies have great training programs and systems for you to plug into immediately. Why wait!? Get to the right side ASAP!
S – If you’re already self employed, start looking at businesses with systems or how to convert your business into one with systems or products that don’t eat up your time!
B – If you’re already a business owner, start educating yourself on how to make your money work for you through investments where you can generate wealth passively. Think outside of the box here. You could invest in small start ups or in another business for yourself. Of course, real estate and stocks are here too but don’t limit your thinking. You’ve made it this far! Way to go!
I – If you are already an investor, you’re likely making money and should be writing your own blogs to educate others on your successes! 🙂
Remember that what you do today and the decisions you make will be reflected in how you live your life in 3 – 5 years. What are you doing to generate wealth?
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