Understanding the Financial World – The Employee

What I have here is called the Cashflow Quadrant, a concept drawn up by the financial guru – Robert Kiyosaki. He pretty much simplifies the financial world into 4 quadrants and segregate people accordingly.

We have the …

  • Employee
  • Self-employed
  • Business Owner
  • Investor

You should be able to categorize yourself quite easily, and reflect what has been going on all this while.


As the picture shown, employee basically have a job (or two for some, and even more for the unfortunate). But that doesn’t really matter, how many jobs you have. It is an active income, in which you exchange your time for money. Ever wondered how your salary is calculated? It’s calculated on an hourly basis.

You value = Amount paid in an hour.

For eg. if your monthly salary is $3000. And for the month of March, assuming standard 5 working days per week, you are working 21 weekdays. Take $3000 divide by 21 days = $ 142.857 in a day.

And assuming you are working full 8 hours per day, that would make… $17.857 per hour.

That speaks just as much if you were to take unpaid leave, or apply for medical leave in your company. That amount should reduce proportionately as well. My point would be, your value is decided by someone else – called your boss. Employees don’t have a lot of time. 8 hours per day goes to the company, to the man you’re building his dream for! 2 hours inclusive of travelling back and forth, and that’s only assuming you require only an hour’s travel.

In bullet form for easy comprehension:

  • 8 hours to your Company
  • 2 hours to your Travelling time
  • 7 hours to your beauty sleep (if you’re lucky enough to have 7 hours, that is.)
  • 7 hours left for your miscellaneous activities.

To some, 7 hours may seem a lot. To me, definitely not. Yet to include time for your meals, time for family, time for household chores (if you have to do it by yourself), time for yourself, time for your passion and dreams.

Employees also face vulnerabilities such as facing an income cap, retrenchment, vacation and working hours. Back to the question I raised in the previous discussion on money – what do you want for yourself, for your life? What do you want?

And I know climbing the corporate ladder sometimes isn’t the easiest thing to manage. There would be irksome politics between employees, running on a pointless competition for that petty “respect” or “honor”, or simply that “extra bread” to bring home? Many said it’s all right to live on an average household income. Really? Is that the case?

Planning your finances based on how much you are paid each month? Sounds like pretty much what everyone is doing isn’t it? And how does it feels when you wish you could afford something for your family, for your children, or bring them on a vacation, fulfill their dreams but you just CAN’T. And are you excited for your monthly salary, only to pay off the bills and left with little at the end of each month.

Then come along some financial planners who persuades you that the insurance policy in hand is at the best of your financial interests. And you purchase them. That’s where all your money go to. What about when someone in your family becomes ill? What about when you get laid off, by “Global economic crisis” ? Will someone take you in just because you seemed pitiful? Would you resent the world for having a global economic crisis? Or really it was just the path we chose ourselves to begin with?

I’m not saying being an employee is bad, these are just the typical characteristics they exhibit, the general lifestyle they lead. The perks of course include promising stable and secured income on a monthly basis. And sometimes even massive year end bonuses. Those are active income. Are you financially free? Are you free?

Are you chasing your own dreams and passion? Or are you building on someone else’s? Majority of the people falls under this category – until they are sick and tired enough, to take a leap of faith, to do something different for once, and step out of their comfort zone.

It never had been easy going against the tide. I could only promise you, you will see in a different light and the results are worthwhile. Read on history about all the famous people. It had never been easy for them.

  • Wright brothers. They wanted humans to fly. Everyone laughed at that insanity. Today, is anyone still taking them as a joke?
  • Henry Ford. He wanted automated metal carriages, and they said no one would ever buy that piece of metal. Well, today, I thank him for making the Ferrari and Lamborghini available for us to dream.
  • Colonel Harland David Sanders was turned down over a thousand times for his “Secret Chicken Recipe” and there is over 17,000 outlets across 115 countries as of Dec 2011.

And there are thousand and one more stories to go on.

Recognize this logo? Ever wondered what it meant?

Until you have taken a bite, you wouldn’t know the taste of it. Everything lies with the first step. And as with Martin Luther King Jr. likes to put it:

Faith is taking the first step even when you can’t see the whole staircase.

At least I did it for many times myself. Trust in life, have faith in God. Trust your instincts and let the magic unfold.

Rounding up for this segment, I would implore unto you to find out once again, what do you want in life? If you already know then share with us, maybe we can discuss and help propel you forward towards your dreams. Dreams are not childhood fairy tales, they are for people who are bold enough to run after them and realize them all.

This is my avenue as a stepping stone towards passive income and financial freedom – my Travel Club Membership that entitles me to earn a part time to full time income, with relatively simple steps. There are 3 videos at the bottom, watch them all, and contact me. You may sign up on your own, but you are advised to contact me via my email at KennethVacations@gmail.com

I will be discussing other quadrants in time to come, and perhaps discuss more on various types of business opportunities.

The key is to take action! Heard of NATO ? I learnt this as a kid. It stands for “No action, Talk only.”



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