Types of Income

I have read quite a few books and spoken to many people about this but no one summarises it better than Robert Kiyosaki.  His most famous book is "Rich Dad Poor Dad" and is definitely worth a read, but his book "Cash Flow Quadrant" is the one that really makes you realise what 90% of us are doing wrong if we want to get ahead in life.  I will summarise what his book reveals.

Above you will see the cash flow quadrant.  These letters represent a different method of income.
E - Employee
S - Self Employed or Small Business
B - Big Business
I - Investment
Most of us are caught on the left hand side of this quadrant.  On this side, we work for money.  More hours equal more dollars.  Most people start out as an employee working for someone or some of us get the great idea to start a business, thinking, "I want to be my own boss!". But at the end of the day, if you don't turn up to work, you don't get paid whether you're self employed or an employee. Robert Kiyosaki's book says that 90% of us are on this side, and we are all fighting for only 10% of the available income.  Doesn't seem fair, does it!!  I, just like most of you reading this, are also caught here.
The right hand side of the quadrant is where we want to be.  On that side is only 10% of the population, but 90% of the available wealth.  The owners of big business or big investors.  Whether they go to work, or go on holiday for a year... they will still be making money.  In fact, in many cases, these people could be earning more by the time the come back from holiday.  This is because their money is working for them.  They have the time to have a lifestyle rather than working every day just to pay the bills.
Somehow, we need to find a way for the everyday man to get from the left hand side to the right hand side.  Now... I don't know about all you people out there, but I don't have millions of dollars hidden under my mattress to buy a big business or invest in a way that I could stop going to my everyday job, so how do I get there?  You need a vehicle!!  The good news is, there are many vehicles out there.  The trick is to find the one that best suits you and one that you can commit to keeping up with.  This vehicle is what you can use to create that pipeline of income and what I am investigating and sharing in this blog.
In simple terms, a vehicle is a way to make extra income that you can ultimately use to invest.  It needs to be something that takes very little time, but still earns enough money to be worth while.  Let's face it, it's hard enough to fit in work, family time, seeing friends and still getting some sleep these days.  Everyone is so busy that fitting in much extra is hard.  This income will allow you to invest by buying investment properties, or playing with the stock market.  There are many ways to invest, but you need the extra income to do it.  I myself have tried a couple of vehicles, but they have not matched my personality and I didn't feel committed to them.  I am not saying that these methods don't work, because I believe they do, but in my opinion, they suit certain people.  Next week I will explain the first of these strategies, how it works and why it didn't work for me, but how it may work for you.