Are you ready to move to the next phase in your life and business career?
“Yes Miles, but I don’t know what I’m doing or where I’m going.”
Having a dream of where you want to go is fantastic, but it takes action to get there. And you’re right, you need to know what the next move is.
Only people glued to their cell phones take steps without looking first.
Years ago I ran across a book written by the Rich Dad Poor Dad guy, Robert Kiyosaki who created a model called the Cashflow Quadrant.
I have taken this concept and tweaked his model in a way that fits internet marketers and online business entrepreneurs. That system is what I want to share with you today.
I’m going to share with you my personal experience of moving through the different Cashflow Quadrants what comes with each quadrant and how I knew it was time to make each shift. I’m going to tell you how you can go from the lowest level of being an employee to actualizing your dreams.
Robert Kiyosaki’s Cashflow Quadrant Summary
Robert Kiyosaki’s Cashflow Quadrant is a placement model that is made up of four quadrants that each of us falls into.
They are realms of career development which he explains in his book The Cashflow Quadrant.
According to this Robert Kiyosaki’s Cashflow Quadrant, there are four types of people making up the business world.
As we move from top to bottom then upper right to the bottom, there’s the Employee, Solo-Practitioner, Business Owner, and Investors.
The solo practitioner doesn’t apply to you or me as an internet marketer so I’m going to call this the Self-Employed Quadrant and I’ll talk about more in detail below.
I’ve also made adjustments for the Business Owner. Robert Kiyosaki’s Cashflow Quadrant talks about you as a business owner, having a few hundred employees. As an internet marketer and entrepreneur, your model is going to look much different.
But having an understanding of the Robert Kiyosaki’s Cashflow Quadrant is pretty cool because you’ll learn that hey, there’s actually a system that can take you from the lowest level all the way up to that point where you’re achieving your lifestyle design.
The Cashflow Quadrant Model for Internet Marketers and Entrepreneurs
If you'd prefer to listen to this content from the video above, play it or download it from the podcast episode below.
From Robert Kiyosaki’s book list, he published his book, The Cashflow Quadrant in the late 1990’s. The internet was around of course but entrepreneurs and internet marketers follow the beat of a different drum.
Analytics has changed, how to get yourself known on Google has changed, a lot has changed, and it’s a whole different game now.
What I’ve done is taken the rich dad’s cashflow quadrant concept into a new light that is more applicable to internet marketers just like you and me. This way you can have a smoother transition and know what’s next for you on your path moving forward.
For now, let’s go ahead and jump in covering each of the cashflow quadrant sectors so you can figure out where you’re at and how to get from one quadrant level to the next.
Dreams Begin in the Employee Cashflow Quadrant
The employee section of the Cashflow Quadrant is where we start out.
Before I got my online business up and running, I was an employee. I did the 8 to 5 daily grind, doing the 1 hour-plus commute to and from work.
This is where the majority of the population is within the Cashflow Quadrant.
I started building my online career as my side hustle while I was an employee. I wanted to “live the dream” build a successful business online and have the lifestyle freedom I wanted.
Here’s where I messed up, and I’m warning you to be careful, test and research before you make such a bold move. I decided to quit my job to focus on my internet marketing business, and that move backfired in my face…
I lost all my money, sold my car, kept trying to keep the dream alive but was barely staying afloat without a consistent paycheck and not enough cash coming in from my business.
Finances became extra tight, and at age 30, I had to move back to my parents’ house with my wife in tow. It was a very humbling experience for me…
So what did I do? I picked myself up and became an employee again! I was right back in that employee cashflow quadrant, but this time, I knew I needed to stay as an employee while I started another online business.
I had my day job, but I was doing a side hustle and trying to keep my internet marketing business going.
Keep a Growth Mindset in the Rich Dad Poor Dad Quadrant
This is the primary challenge within this Cashflow Quadrant of being an employee. Everything you do to start and grow around your online business is going to be your side hustle until the day you can quit your day job.
An employee in the Cashflow Quadrant is more or less predictable. There’s security in the routine, in the pay and in your responsibilities.
In this stage of the Cashflow Quadrant, you do your usual stuff, then you come home. This is the time to work on your content and growing your online business.
This is the time to figure out your niche, and start to really think about how you can add value to the world.
Or, if you want to start an affiliate business, this is the time to do the research. Learn, grow and start to pin down what you want your brand to look like.
You can build your first sales funnel, your first opt-in page, but the most essential concepts in the employee stage of the cashflow quadrant to remember is research, learn, and take action.
Take steps every day that’ll move you from the employee cashflow quadrant space, this is all about the side hustle.
Unexpected Opportunities in the Employee Cashflow Quadrant
There are a bunch of things in your side hustle that qualify as tax deductible.
Once you start to have that authority site, the money you’re making is going to be taxed so things like your cell phone, internet connection, web hosting, Thrive Themes, etc., can be deductible to your taxes.
You can make a bit more money to add to your income plus benefit from these deductibles. You definitely want to have a great CPA on your team.
It All Changes in The Self-Employed Cash Flow Quadrant
After the hard work you put into your side hustle, eventually you’re going to shift into the next cash flow quadrant going from employee to being self-employed.
The Cashflow Quadrant of the self-employment realm does come with some challenges.
You don’t have a boss but you have clients. Dealing with clients can be tough sometimes and if this is where you’re at in the cash flow quadrant model, then you know what I’m talking about. They can require a lot and even expect too much from you, and it’s important you learn how to say no when you need to.
Clients can be in then out, they lose contact, they pay you and some don’t. Sometimes you have to chase down the money, and all of these aspect bring its own kind of stress level.
Another potential challenge is that in the self-employment realm, your taxes will go up significantly, however, more of your life and home business will be tax deductible so you take the good with the bad.
Make the connections, gain the experience and continue to work towards the next phase.
I was earning about 50% of what I needed to live working online and I was documenting the process and sharing that data on social media.
My Experience Becoming Self-Employed
I was sharing the analytics from my website on my personal Facebook page and what happened was pretty interesting.
People learned about the stuff I’d been doing on my side hustle and I had a couple of friend’s who’s websites weren’t doing very well reach out to me for help.
Those long hours on nights and weekends spent learning those WordPress skills paid off. I was able to offer to my clients services between $25 and $75 per hour.
The higher income I was making self-employed gave me enough traction to move away from being an employee since 50% of my income was coming from my side hustle while the other 50% was from doing client work.
You’re One Step Closer in the Self-Employment Realm
I stayed in the self-employed realm of the cashflow quadrant for about 2 years. I was building WordPress websites and selling marketing services.
Personally, I’m grateful for being in that role for the time I was, I had moved up in that cashflow quadrant. I learned new skills internet skills in a condensed period of time that I still use today.
And what it really did was to free up several hours in my day. My commute time was gone, I worked from my home, I could even work anywhere I wanted with an internet connection.
My lifestyle value went up significantly because I could work anytime and anywhere I wanted to and made a higher amount without any fixed paycheck to deal with.
The Cashflow Quadrant Where Business Goals Are Actualized
From the self-employed quadrant we move to the business level. Kiyosaki defines business owner, as BIG business, meaning about 500 or so people working in the company that you own.
This is where I’ve made the biggest cashflow quadrant change.
The business level for entrepreneurs and internet marketers is to have a business with systems over a ton of employees. I’m all about no employee businesses.
This means that you’ve got business systems in place, and your business, which once was your side hustle continues running with or without your input.
You know I believe that you need to go after what you really love, find a niche that excites you and go after endeavors that you’re passionate about. If you do that, you’re going to love getting up in the morning, stoked to do what you do, put out more content and have some fun.
What’s fantastic is my wife and I can literally walk away, go on a vacation for 6 months to a year, and our team will still be there to keep the business running without much or any negative impact at all in our cash inflow.
The “B” level in the cashflow quadrant is where the magic happens.
We have a corporate structure going, so we’ve eliminated that massive self-employment tax, we have people and systems doing work for us…
A lot of my contractors are from the Philippines.
When you’re building your business systems and employees, you want great quality of work but not at the point of spending more than you’re making.
My team knows when there’s a problem, and are able to take care of it on their end. This makes things very efficient for the business.
Why These Systems Are So Important
I was invited to speak on a cruise where there was no internet connection. Melanie and I just said, “Alright, there’s no internet, we’re just going to relax and enjoy ourselves.”
There were people on the cruise who were freaking out, their businesses were collapsing. One woman had to refund $7500 to a coaching client because the internet wasn’t working and she couldn’t get in touch with them.
That’s a perfect example of what the grind is like in the self-employed realm. When you’re in that cashflow quadrant, you have to constantly be there on the ground for your business.
As fast as you can, move into the business quadrant and develop systems to have in place.
Then there’s no need to panic when there’s no internet connection and you can’t reach your clients.
Unfortunately there are a number of myth's floating around about making money online and internet marketing. From purposeful mis-information and mis-direction to wanna-be experts passing along things they 'read in a forum' that are simply not true... It can be difficult to know what is…
Making mistakes is a part of the game. If you aren't making mistakes, you aren't trying. And honestly, you probably aren't learning, either. So don't let this post confuse you into thinking that the goal is to avoid mistakes. In fact, the opposite is true.…
One of the real 'make or break' pieces of the internet business puzzle is doing research... And most people are either ignoring the research side all together, or they are doing it all wrong. This post will help you understand the right approach to get…
Miles is a full time internet marketer who sells information products and a niche membership program with his wife, Melanie. Together they have created a lifestyle business that allows them true location independence and this blog where you get to see behind the scenes and see how they have built their online business from scratch.