A great number of people don’t have an idea of Cash Flow Quadrants. Are you one of them? If yes, no problem. Today, we are going to have a look at the same which have divided all the population of our world in different classifications. These cash flow quadrants are:
E Quadrant: You have a job and works as an employee for a company/organization
S Quadrant: You are self-employed and own your job
B Quadrant: You are a business owner and have a team to work for you
I Quadrant: You invest money in different businesses and money works for you
This gives you a very clear picture of what classification you are in and the financial status you have right now. Most of all, these four quadrants have four different mindsets and values. Many people will be surprised to know that. Let’s take a detailed look at it:
E stands for ’employee’. More than 65% of the total population around the globe comes under E quadrant. These people work for others. You have heard the elders advising you like: study whole heartedly, have good marks and grades, and you will get a handsome job. Earning a hi-profile degree like MBA, engineering etc. is considered necessary for getting a highly paid job.
Now matter how high scale of a job you have, but it would be a mere job. Whether you have a seat of executive or a clerk, you will be recruited under specific rules and regulations. Both of the executive and clerk get salary at the end of the month, and privileges along with it. Though, there is a hell of a difference between the level of a hi-class officer and a clerk, however, one thing is quite same: if you stop going office due to any reason, you won’t get salary any more.
Also, a fixed salary is enough only for meeting the monthly expenses, making savings like mutual funds, and/or purchasing stock market shares. This cash flow quadrant gives you security and a steady paycheck every month so you stay satisfied. But have you ever thought that this security is only a temporary thing? Money is coming only in case you keep on going office regularly. If you are fired, or retired, no more paychecks will be arriving. Also, you can’t continue working in old age. You must have to do something for retirement before it comes. Therefore, the job security is only for the time before retirement.
S stands for self-employed or small business. The people who work for themselves and own that work, come under this category. Like, you run a shop/store, or a website on a small level or single-handedly. This quadrant brings more satisfaction and freedom as you don’t have to work for someone else. You are your own boss. However, it is also like E quadrant. You or your staff has to work to keep the money coming. Therefore, people in this quadrant are also forced to work continually.
B stands for business. Medium or big sized business owners come in this category. Moving and staying in this quadrant needs a lot of effort, patience, time, expertise and experience, and above all, leadership qualities. If you want to move in to this quadrant, you need to possess all these qualities. Here, you are the boss and in driver’s seat. Your team and workers work for you, rather you go to work or attend the office daily. You just need to supervise the business operations and take decisions. If you are a great leader and action taker also, you can uplift your business and team to the highest level of success and achievement.
This quadrant gives you the freedom of time and money. The best advice for moving in this quadrant is that you should start with a small business and expand it gradually. You can keep on doing a job for earning a steady monthly income while give a few hours daily to your business also.
I Quadrant: The Superlative Cash Flow Quadrant
I for investor is the advanced level of owning and running a business. When you have plenty of money, you don’t need to do anything. Rather, money will do everything for you. This quadrant gives you the highest level of freedom – freedom of time and money.
After completing 10 to 12 fruitful years in business, you can become a successful investor. However, it needs great experience and knowledge of market ups and downs. Planning and joining successful business groups make moving into this quadrant easy for you.
E and S quadrants are called poor or mediocre person’s quadrants. These people can’t enjoy life as they are bound to work to earn money. These two are called active income quadrants. No work; no money, this is as simple.
Whereas in B and I quadrants, as long as you run the business and invest wisely, you don’t need to worry at all. This ‘passive income’ continues to come. If you want to be rich and to build wealth, you can do it in B and I quadrants only. But first, you will have to change your thinking patterns and have a mindset of business person and investor.
Gradually and constantly, you can move from the first and second quadrant to the third and even forth one. It is quite possible. So, don’t wait and start planning right now. When you decide to change your destiny, nothing can stop you from achieving your goal.