Before Diving into the World of Investing

In his book Cashflow Quadrants, Robert Kiyosaki talks about 4 kinds of people - Employee, Self-Employed, Business Owners and Investors. While Employees and Self-Employed people form the left side of the quadrants, Business Owners and Investors form the right side of the quadrants. Point of this book is that it is okay to start your life on the left side of the quadrants, but make sure when your life ends, you are on the right side of the quadrants. Most people also desire to rich, so they make a dive – straight from employee or self-employed to investor. Bad Move!

Most people who have a comfortable job, start investing in real estate. Everything is hunky dory. They spot a good deal, seal the deal, start making monthly payments, and hope to sell the property when prices go high. Sweet! Then they get laid off from work. Trouble begins. Can’t pay the bills, money is stuck in their real-estate property. Can’t afford to make mortgage payments for real-estate property. I know what you are thinking, it won’t happen to me. So did a lot of other people whose houses are being foreclosed.

What does the Employee or Self-Employed person need to do? They need to create a supplemental income, a secondary income which they control. Not their boss. So, if something happens to their job, they can still afford to pay bills and make mortgage payments on the house. It takes worry off your head. You can still invest, but without much worries now. You don’t worry much if you lose money on the deal. Treat it like a learning experience. But, if all your money was stuck in investment and it turned out to be sour deal, you could have been in a depression.

So, look for a way to create a secondary source of income. Even if you don’t plan to invest, it will help you incase you lose a job. Always keep you eyes open for opportunities. There are plenty.

Hope this helped. Looking forward to reading your comments.

Respectfully,
Mayur

Job Security or Financial Freedom?

Last night, I met a computer consultant who had been out of a job for the past few months. His project had ended and he was looking for a new project. Upon inquiry, I found out that due to his Visa status, he could only work in computing field. Next question I asked him was if he could start a business under his visa status. That, he could do. I recommended he start a business of his own and also gave him a few low-cost ideas. This way, he could start generating some extra income.

To my surprise he gave me every reason under the sun why he cannot start a business and why job was the way to go. I knew I had to run away from this guy. His values about money and my values about money contradicted big time. He was the kind of guy who went from job-to-job looking for that security. He even told me that if he does not find a job by end of this month, he might have to sell his car, just to get some cash for survival. I really feel sorry for this guy. But, if he isn’t willing to help himself, there wasn’t much I could do.

However I am glad I met him, because he got me thinking about my beliefs about money. He treasured a job security, whereas I am gunning for financial security and financial freedom. Nothing wrong with what he was doing, but there is a lot of misery in that path.

Anyways, hope this got you thinking about what you are doing? Do you have a spare income? Are you gunning for job security or financial security and freedom? Let me know.

Hope this helped. Looking forward to reading your comments.