One of the most read and familiar economist book by the name "Rich Dad Poor Dad" presents a clear concept referred to as the cash flow quadrant where it illustrates four major ways in which people generate a source of income; employees, case of small business owner, big business owner and the investors. It regard this four categories as one of the main sources of income. 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.
An employee occupies the first 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. Great tax burdens are laid to employees rather than to employers. Employees lack the leisure to lay off most of their tax burdens as they are normally controlled and governed by their employers.
Small businesses do involve substantial earnings to their owners. The main problem of being an employee or self-employed to your own business is that you are directly trading your time for money, and when you aren't trading your time then as a result you don't make money. Here your financial stability is always on a bargain, because it is not always the case that you will be fit to do the job. Check here for more info.
A big business owner occupies the third cash flow quadrant as illustrated in the book "Rich Dad Poor Dad". Big business owners normally don't have a ceiling to their earnings as they are not limited by time compared to the small business owners. The big business owners normally establish systems to create their wealth, for instance, instead of selling ice cream on the roads by exchanging their time for the job to earn, they will invest on some good capital to buy five different ice cream tracks and thus employ people on those tracks. Big businesses owners have a wide source of their income for instance they would always choose to invest more to a business and earn more from employees than employ themselves for their limited time. On this way the big business owners are able to earn more and secure on their source of income. If you want to learn about this site, view the link.
Here in the last quadrant involves different investors. It is a person who invest greatly in projects so as to have great returns in the future. They normally invest on big plans and ideas. It involves a lot of risks and thus has very few participants.