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Investor and Cash Flow Quadrant: How to create passive income? [Part 5.]

Cash Flow Quadrant investorInvestor – is one of the four categories Cash Flow Quadrant, which includes a very small proportion of the earning population.

In the article you can read about 7-investor level and individual advantages or disadvantages of this category of the Cash Flow Quadrant.

Who is actually the investor?

Investor is a person who has the knowledge, skills, experience and sufficient cash which enables him / her to invest it.

Investor is the fourth category of Cash Flow Quadrant, located on the right side and as well as a business owner – investors control system:

  • system through which investor appreciate his funds
  • as well as which replaces his daily efforts and allows it to multiply his current capital.

Thus means that investor does not necesarily work for money, as it is in the case of employees and self-employed people. Investors can make money to work for them in order to create more money.

An investor can arrange that money (and money do not have to be necessarily investor´s own money, there are may be other people’s money) have become the most reliable employees who:

  • Never get sick,
  • Never Sleeps
  • Never need a holiday,
  • Never get pregnant,
  • They never want to pay and other benefits…

Investor can earn 24 hours a day.

The sad fact is that for most people is the goal “to be a investor” unattainable. They never achieve it in their entire life…

Why?

Simply because the majority of the population don´t think the right way to get to this category of the Cash Flow Quadrant.

And because most people are not willing to change themself and their habitual way of thinking.

Would You rather watched a video instead of reading? Here it is…

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Seven levels of investors…

Robert Kiyosaki, who popularized the Cashflow Quadrant itself, also speaks about a 7-levels of investors. His classification takes into the fact that each one of us is from a certain point of view an investor.

Task: Go through each level, which I describe below and determine on what level of investor´s thinking you are right now…

Investor Levels 0: People who have nothing to invest…

These people spend everything they earn, or even more.

But not all people who fall into this category, have small income – often people with high incomes are falling to this category, because they do not have discipline in their spending – for example they use a credit cards too much.

If you are in this category you need to change it and move into other categories because soon you’ll be over-indebtedness, and you will have financial problems when you will not be able to pay your debts.

Investor Level 1: Borrowers

They borrow from one creditor to pay another one – repaying their loans by other loans from different creditors and are in a vicious circle from which it is hard to get out.

People in this category use several credit cards and buy expensive and big things on the installment plan, or even borrow money to invest.

These people may seem they are rich for a lot of expensive things they own – but only from the outside.

In fact they actually owns nothing – everything belongs to the bank (or other entity from they borrowed the money), and once they no longer have the ability to pay for it on monthly basis, they will lose everything.

Don´t be a lifetime borrower only – you need to move yourself on to a higher level of investor.

Investor Level 2: Savers

Savers are the opposite of borrowers. They put money aside on a regular – every month basis from their income, so they can pay cash out what they want – a great attitude, which you should continue to hold.

On the other hand, these people are often too conservative in order to enjoy the fruits of their discipline and ability to gather the money and have a nice lifestyle.

Savers prefer to save money and gather them instead of their own investing and multiplying. They do not want to go into debt and they are not willing to bear any financial risk.

They suffer and saves pennies, instead to have a more effective strategy to achieve their financial goals.

And thanks to inflation, which devalues ​​the money, they never win this game, and always will be only gathering the money and tighten their belts, but in fact they never recognize, that their lifestyle is improving.

If you are in this category, you should find a way you can plug in the power of your accumulated money and engage them so they can bring an additional funds to relieve your workload and improve your lifestyle.

Get an account or an envelope where you will save 1% – 10% of your current income and Collect this money until you have enough to execute first investments.

Investor Level 3: Smart aleck

These people are often very intelligent and educated – but not in investing – it is not so often…

Smart aleck are divided into three sub-categories:

  1. I will not bother – people in this category convinced themselves that investing is not for them because they do not understand money and investment. They are not engaged in investing money and let lie the money dormant in a bank account without any evaluation and because of that they must work entire life.
  2. Cynics – experts on why their investments can not and will not work and what all can go wrong. Likewise, they are afraid of making mistakes. Stay away from them, because they will discourage you and intimidate every of your investment decisions.
  3. Gamblers – are the opposite of cynics – they invest because it’s smart to do, however they do not care about their investments enough and are not interested in the details. They often look at their investments as a gamble, so they most likely lost money in investments. Their only strategy is a lucky coincidence, which is pretty bad bet.

The level of investor “Smart aleck” is something where you do not want to be – just as in either of the following subcategories – seek a move to level 4 or above…

Investor Level 4: Long-term investors…

People who have drawn up long-term plan, which leads to meet their financial goals.

They are often conservative in their decisions and before they make some investment decision, they carefully studying the documents and information and make better investment decisions than most other people.

They have a well-balanced revenues and expenditures, and understand how important it is to minimize the debt. They live within their current earnings and are constantly increasing their assets and thus passive income in their life.

They actively participate in their investment decisions and are aware of the tax consequences of their investment – they are not a big investor, they are regular investors and investing helps them improve their living standards and a move to the right side of the cash flow quadrant.

If you are starting with investments, you should strive to get into this category as soon as possible.

Maybe you will be interested in the information that is in this category are most of today’s millionaires.

Investor Levels 5: Sophisticated Investors

They have a solid financial education and are more involved in aggressive investments and investment strategies.

They are constantly learning new investment strategies and earn much more than have their costs – they are starting in small to learn and understand how the particular investment works and they are not afraid to make some mistakes initially.

With increasing experience they gradually expand their portfolio of assets.

They do not avoid riskier investments because they understand money and their rules and have good financial habits and a solid financial base – they are aware of their own investment policies and rules.

Investor Level 6: Capitalists

Very few people will reach this ultimate level – a level of investment championships.

These people are taking the time, money, energy, and talents of others to create huge profits.

They usually own big-sized enterprises and large investments and from every investment they expect long-term and unlimited 100% return. Often they indicate the trend of the economy, generating jobs, services and products.

In other words, this level of investor begins with your ability to think like a business owner.

Follow to the different levels step by step…

Realize that in order to you become a better investor is necessary to undergo a process of personal development.

Be aware that in order to you can become an investor at level 5 or 6, you first need to develop your skills at the investor level 4 – the level of long-term investor.

Level number 4 can not be skipped, because it will have disastrous consequences for your investment. Anyone who tries to jump over, is actually at level number 3 – the gambler.

Have you found out to which of the seven categories of investor you belong personally?

If you are in any of the first four categories and you would like to be better off sometimes in your life, make a commitment and move to a higher category.

  • Save aside funds for investment from your current income.
  • Or increase your current personal income if you don´t have enough left to invest.
  • Educate yourself on the investment that you become smarter investor.
  • Invest and create your investment portfolio in order to help you cover your living costs with your passive income.

In what investment you should put your money, so that you can become a long term investor and create passive income?

I wrote about this topic an article “Financial Freedom: How to make money for investments, gain passive income and financial freedom?

Here is just a brief summary of what asset you can invest in order to you could become long-term investor:

  • Real estate – buying and renting
  • Businesses that do not require your presence – the purchase of shares or the entire company
  • Dividend stocks, bonds and income from funds
  • Licensing patents for the operation of a system or program

And basically almost everything that can grow in value with the passage of time.

But how to start investing if you do not have money to invest, or is not able for you to put money aside and save them in current situation?

The answer might be your own Network Marketing business which enables you not to only repay your debts, but it can also be an extra income, which you would be able put aside, save it and after a while start to investing it.

THINK: What would it change in your life once you earn your first £100 – 200 monthly extra to what you currently earning?

If you save it for a year you will have extra £1200 to 2400.

  • What would you do with them?
  • What change that kind of money would bring to you?

And what about when we (you and me) together create income for you an income £300, £600, £1200 or even £3000 per month or more?

With that kind of money you can find an investment where you can multiply them.

If you are looking for a way to accumulate enough investment capital for your investments in order to receive passive income, then look at this system [please click here and fill out the questionnaire]…

Following articles…

If you are interested in the topic of Cash Flow Quadrant more, then read each sequel to deeply analyze its various categories:

In conclusion on the subject of investor and Cash Flow Quadrant…

To become a competent and profitable investor is a journey that begins with the fact that you will be able to safe a portion of your income and accumulate enough capital for investment.

If you are employed or self-employed businessmen and you earning enough money, you should be able to save 1% to 10% of your current income.

Get started today and in a year or two you will have saved up enough to be able to execute your first investment.

To proceed to that destination faster, start a business – the business itself will do both – helps you improve your thinking and also helps you generate more funds for investments.

 

If I can assist you in this area, please contact me.

I wish you a great day and look forward to our personal meeting.

 

PS: Do you want to have more money, freedom and peace and soon than the others do?

I discovered a way a person can get passive income “to live a life without borders” by building a business from home, and I have a system that is so simple, that anyone who has a dream and wants to fulfill it can handle it. This does not require selling and the best part is that it does not take much time either – maybe 30 minutes of concentrated effort / day.

Do you want to know more about it? Contact me…

 

Is this article helpful? If so, let me know…

  • Share the article on social networks with your friends…
  • Send the article by e-mail your closest associates
  • Share your thoughts below in the discussion.
  • Click on the “Thank You” below in this article…

 

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Robert is an entrepreneur, a writer, a coach and visionary mentor who´s life mission is to help people achieve business, financial and life goals through coaching, mentoring and network marketing. Robert has written several ebooks - the very last one is: Magic words of the Masters of life... (avalaible in czech language only). Do you want to know more? Click here...
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