Passive Income

Have you ever read the book "Rich Dad Poor Dad"?

Well, one topic which caught me the most in this book series is the idea about "Passive Income".
One of the books in Rich dad series is "Cash Flow Quadrant". Robert Kiyosaki, the author, mentioned that there are 4 types of people, 4 types of cash flow.

1. E = Employee
2. S = Self-employed
3. B = Business Owner
4. I = Investor

The first type is very easy to define. Employee has no passive income because employee works in other people company. Employee's cash flow is totally depends on salary they will receive. If they quit their job, no money, no cash flow. That's it.

The second and the third one are quiet tricky to explain. Self-employed is the person is someone who open a small shop which he has to open by himself every day. He has maybe 1-2 employees but obviously, he cannot leave the shop for these employee to look after. He wanna go somewhere for a holiday, he has to close his shop and yes, that's mean his cash flow is stopped. On the other hand, business owner is someone who create a system to run his business even he isn't there. The different between Self-employed and Business owner is Business owner can leave his company for 2 years and come back to see his business growing while Self-employed will come back to see his ruin.

The last one, Investor, is another one who invests in securities and asset such as Bond, Stocks, Real estate and has a passive income such as interest, dividend or rent from their assets.

Kiyosaki suggested that, if you want to have a "financial independence", you must create passive income cash flow which cover your daily expense. The passive income must be a cash flow which always flow in your pocket even when you sleep.

The point here is which one you choose to be. As entrepreneur wanna be, we may scope just self-employed and business owner first. In my opinion, self-employed is easier to be. Most of new venture is start from this part and growing up until they build the system and company becomes self-organizing firm.