Following our money principles series over the last two weeks we continue to discuss the subject of money. If you missed that series you can click here to read the first article in that series. This series formed the basis of how to become financially successful. Our aim over the next few weeks is to help you understand the different ways that we all make money regardless of what profession we are into.
Before we go there, it’s worth sharing some statistics. From research conducted over a period of time it was discovered that about 95% of the world population share approximately 5% of the wealth. Conversely about 5% of the world population control 95% of the wealth. Those are some pretty startling statistics, aren’t they? You would probably assume that everyone deserves to have an equal share of the available wealth. In an ideal world this would be true.
I once came across a story that narrated that if you were to take all the money in the world and even distribute it to everyone something profound would happen. Those that were wealthy would regain their wealth and maybe more while those that were poor would again be poor or worse off. Why, you may be asking. It seems that money is more about our thoughts than the actual money itself.
What you believe about money determines whether you retain it or lose it. If you have an abundance mentality and good money habits you are likely to become wealthy. On the other hand if your money habits are poor and carry a scarcity mentality you will be unable to create any meaningful wealth. It’s food for thought.
What could be the difference? Why do so few people accumulate most of the wealth and live abundantly while the majority just barely gets by with the remainder? First of all it goes back to the principles that we shared over the last two weeks. Wealthy people are diligent in applying them in their lives. They are consistent over a long period of time and that is what brings them the success that they enjoy for generations and generations.
They also understand the game of money and know how to position themselves to achieve their financial goals. The primary ways that we all make money are as follows:
- Exchanging time for money as an employee
- Exchanging time for money as a self-employed person
- Owning a business that employs people to work for you
- Investments that generate money for you
World renowned financial guru and author of the Rich Dad series of books, Robert Kiyosaki calls this concept The Cashflow Quadrant. Knowing where you are in the Cashflow Quadrant is critical to achieving financial goals. Once you know where you are you are now in a position to determine the course of action to take to get to where you want to be.
In the next article we are going to look at The Cashflow Quadrant to give you more insight about how it impacts our finances. Feel free to share this article on social media and to leave your views and comments below. Until next time,
Be all you can be!