Those of you who are familiar with the teachings of Robert Kiyosaki will be aware of his book “Cash Flow Quadrant” and how it goes into extensive detail regarding 4 very specific groups that we all fall into.
The 4 groups are called the cash flow quadrant and are as follows:
Tea Employeetea Free-lancerstea company owner and the investors.
The ideal quadrant for anyone who wants to get rich is to be in the Business or Investor quadrant.
Why?
Because it allows you to exploit leverage to its full potentialmeaning that you can continue to increase your income by working the same amount of time (if not less) unlike an employee or freelancer who can only earn “x money per hour” worked.
Now, Robert Kiyosaki continually insists on becoming an investor because this is the quadrant that allows you to generate passive income. This is the ultimate goal, to become an investor who can generate passive income whether you wake up to work or not (and this is my personal goal).
So in order for this to be accomplished as quickly as possible, Mr. Kiyosaki suggests that you build and grow businesses to create a cash flow that will then allow you to “invest” and eventually become a wealthy “full-time” investor. .
So what the heck does all this have to do with Forex trading?
You see, there is a misconception going around the internet that people tend to believe that trading is nothing more than a mere job, when in reality they have no idea how powerful this “so-called job” really is in impacting their lives. .
First of all, let’s clear something up. Forex trading can be anything you want me to be:
- It can be a hobby (a very unprofitable hobby, I might add).
- It may be “just another job” (as many call it online).
- It can be a business.
- It can be a vehicle for investment and wealth creation.
If you understand HOW to structure your Forex trading correctly, you’ll be on the greatest ride of your life. Guaranteed!
So bear with me while I first explain what exactly happens and what differs between the business quadrant and the investor quadrant:
#1 Business owners develop “systems” that contain employees for them.
These “business systems” are nothing more than step-by-step rules and parameters that the employee must consistently adhere to every day, also known as “jobs.” Some of these rules could be:
- The days the employee works.
- The time the employee works per day.
- All responsibilities of the position held, whatever the business.
In exchange for this, the business owner will pay the employee a salary, while the business owner creates a cash flow which he then allows him to “invest”, with the ultimate goal of generating residual income.
#2 Investors create and own money systems that create more money for them.
These “investment systems” are nothing more than entry, risk management and exit rules that the investor must comply with in order to grow his portfolio over time in a systematic and professional manner.
Are you starting to get the general idea already!?
Forex trading, or any other type of trading, contains an amazing composition not offered by many other types of business.
You see, in a home based Forex trading business, you automatically take advantage of 3 of the best quadrants, even if you haven’t realized it yet!
Now let me share with you exactly how this applies to your forex trading career:
The Business Quadrant:
The “owner” of the Forex Trading business develops a system so that his “employee” can do his “job”.
This system contains the hours worked per day, the days you work per week and the responsibilities of the position, that is, control and manage the risk accordingly.
The investor quadrant:
This person develops a money-making system that allows him to make money FROM money.
He is also the owner of the Forex Trading business. This business is his INVESTMENT.
The Employee Quadrant:
This is the person who has the “risk management” job for the Forex Trading firm.
They pay him a monthly salary for doing his job correctly.
But the good thing here is that YOU are all three quadrants, rolled into one.
You are the business owner who creates a cash flow that allows you to invest and earn more money.
You are the investor who invests money and earns even more money.
You are the employee who does business for the company and receives a salary.
The good thing is that since you are the business owner, the investor and the employee all in one, you take full advantage of the leverage.
what does this mean to you?
- You work a set number of hours per day, just like an employee does, with the difference that your income grows exponentially over time without any additional work involved.
- You own a business that is constantly growing and generating cash flow which in turn allows you to invest.
- You are an investor, with a business that generates constant cash flow, that you can now reinvest and make even more money with your money.
Eventually, one of your goals should be to establish yourself as a proper business entity to not only protect yourself but also take advantage of the huge reductions in taxes that the government grants.
So get to work! And remember, you are an investor with a positive cash flow business and an extremely hard-working, performance-motivated employee.
