The Money Flow Quadrant

Financially speaking, there are 4 different types of people. These can be classified in graphical form as shown in the picture. They are:

Employee

Self-Employed

Business Owner

Investor

Broadly speaking we can say that the money flows from the groups left quadrant to the right groups. Each of these groups are characterized by their main income generating money through different methods. In turn, each method requires different structures of thought, knowledge, personality and education. Let's look a little more detail each group:

The employee is the person who works for a company and receive income from selling their time to this. Its main objective is to maintain this position in order to collect at the end of the month. They are required to work between 20 and 40 years to retire and collect retirement.

These people want their children to study in college to which can then get a good job with good pay. In general, think that all the rich are rich because they have not been honored, because they have had a stroke of luck or because they have inherited a large fortune. The group says things like "I'll never be rich," "I can not buy" or "Money does not interest me."

The Self-Employed is the person who performs work for other people or companies without binding to them. Also belonging to this quadrant people who own a small shop or business. They are very independent and do not like your income depends on others.

This group does not like having a boss who told what to do. They hate that anyone would do the same task better. That's why retailers are often perfectionists in everything they do. One way to distinguish these people is because they use expressions like: "If you want something done right you have to do it yourself", "My fee is 30 € / hour" or "My commission is 8% of the price."

The Business Owner is the opposite to self-employed. They like to be surrounded by intelligent people who know best. That's why they hire these people to work in your business and make friends with other business owners. Need good leadership to work and communicate with these people. Unlike the previous type, prefer to delegate all or most of the work.

It may sometimes identify the owner of a shop or a small business with this guy. In most cases these people belong to the group of self-employed. The business owner can leave his business for a long period of time and this will continue running smoothly. For the self-employed, if this takes a holiday admission money will too.

This group uses expressions like "Why do I do if I can hire people who will do it for me?" or "How I can get it?".

Investors make money with money. Instead of having people working for them / as well as in the previous case, they have money work for them / as. Quadrant is the excellence of the rich. Never mind that quadrant have made his fortune, must end here.

These people are holders of paper assets like stocks, bonds or other financial instruments. You may also hold other assets such as real estate that provide a regular income.

People on the left side (E and A) are seeking job security while the right side (D and I) prefer to establish their financial security and financial freedom goal. The latter have more free time than used to be with family, friends or start new businesses and new investments. Not surprisingly, therefore, that the rich become richer and less and less effort.

Tax laws benefit people on the right. The right quadrant pay less taxes in relation to the left. An employee, when you receive your salary, do not receive full. The company gives a portion of the state employee's salary in taxes. In what remains a person must buy clothes, food and pay for transportation to and from work. A company in exchange, receives an income from the product sold or service provided. After investing some or all of this income and then pay taxes based on the money he has left. It is not difficult to see that this second way of working has many advantages.

That there are 4 quadrants separated does not mean that you can only belong to one of them. Most belong to more than one, although there is always one that predominates over the others. For example, many people have a small percentage of investors because they have your money in a deposit or investment. The way to tell which is the predominant one is to calculate the percentage of income received each of the quadrants.

This blog is aimed at people who belong to the right side of the quadrant, or who want to move to that side. So I propose as homework to think about which quadrant you want to be and then do haberiguar numbers to which you are currently on. Put the result in the comments to discuss your situation.