Tom's Texas Realty

The Cash Flow Quadrants

Hey everybody, today we are going to take a look at the cash flow quadrants. These quadrants are “employee,” “self-employed,” “business,” and “investor.” Watch today’s video to find out what each of these means and which quadrant you want to be in.

Today’s Video:

“The cash flow quadrants. Basically, there are four different types of people in this world. The first one is the ’employee.’ So, this is what most people do and there’s nothing wrong with this. You can make good money here, but it’s going to take a lot longer because you’re going to have to move up in the company, show your value, and all those types of things.

A lot of times people will transition from ’employee’ to ‘self-employed.’ They step out and say, ‘you know what? I’m going to do this on my own.’ At that point, you’re self-employed. There are a lot of tax benefits here. A lot of people mistake ‘self-employed’ for ‘business,’ but they’re two different things.

If you’re self-employed and you figure this out, you want to move into the ‘business’ realm. You have a business the day that you can walk away and it still makes you money.

Once you have a business, you can become an investor. At that point, you don’t work, your money works for you. Your money makes you money. This is the best place to be because then you can do whatever you want. That’s the ultimate freedom. So this is the cash flow quadrant.”

Pro-Tip:
In the video, I mentioned that being self-employed offers more tax benefits than being employed. Actually, every quadrant offers more tax benefits than the last. Self-employed offers more than being an employee, having a business offers more than being self-employed, and being an investor offers more than owning a business. That is another reason that being an investor is the best place to be.

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