Tuesday, December 25, 2018

What is a cash flow quadrant?

Get to know this graph called a cash flow quadrant if you don't know it already. Know where you are now and where you would like to be. As you achieve your financial goals you should move from quadrant to quadrant. I should clarify it is possible to be in more than one quadrant at a time. For example, you could be an employee and have some investments which provide additional income. The vast majority of people are on the left side of the quadrant as employees (E) or self-employed (S). The left side of the quadrant represents active income, meaning you have to be present to generate income. The ultimate goal for most is to make it to the right side of the quadrant as a business owner (B) and/or an investor (I) which represents passive income, meaning your presence is not mandatory to generate income.

What the graph doesn't take into consideration is the amount of TIME you "buy" back to entertain other interests. We all have 24 hours a day to do the following: 8 hours of work (average), 8 hours of sleep (again, an average), and the remaining 8 hours to enjoy the fruits of our labor. With the right financial plan, you could technically "buy" back the hours required for work to do whatever your heart desires. Want to spend some time on community efforts like mentoring/tutoring the youth or assisting the elderly? Well, you could do that.

Remember, an informed citizen is a dangerous one...

Contact us and we'll show you the way!

#GoAndBeGreat, #Th3rdFx

A disciple of Pip Society and honestly it's the best decision I've made in regard to moving toward financial freedom. My decision has given me back the most precious commodity we have and that is...TIME.


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