Monday, December 17, 2007

INCOMESTREAMS

It is a common say today that there is no job security whatsoever, that is true worldwide. The civilized countries of the world are not left out.They all downsize. So what's the hope of an average employee who only keeps the 9 to 5 grind as the only source of income? The first objective for such people is to get out of rat race and move on to financial fast track, then to achieve their dream while they're on financial fast track.But before you talk about financial fast track, how do you get out of rat race first?
To get out of rat race, you must have equal or more passive income than your monthly expenses. In other words, your passive income must be enough to cover your monthly expenses before you can move onto financial fast track. Like everyone else, you have your own profession. You have a job and you receive paycheck at a fixed time interval. It's what you do differently that determines how fast you get out of rat race.But how do you accumulate enough passive income to get out from rat race?
There are only two ways to achieve this; Robert Kiyosaki in his bookRich Dad Poor Dad has pointed out that we live in an age where we must ensure that we have Multiple Sources of Income. He correctly identified four ways of earning money:
1. Employment (i.e. a normal tradional 'job')
2. Self Employment (working for yourself)
3. Business (having a 'system' that makes money)
4. Investment (earning money of accumulated capital)
Kiyosaki argues that an individual seeking financial freedom should try top osition himself in both nos. (3) and (4), which is exactly what the rich do - they either own a business (its management can be outsourced at a cost to a professional manager), or invest surplus capital in other people's business - and both these do not require an individual to work (i.e. trade time for money).The point is basically to be free from being wholly dependent of an employer.A wise man does not work for money, but lets money work for him. So to get out of rat race, the trick is to accumulate as many assets as possible by investing in money opportunities that appear around you.You know very clearly what asset is and what liability is. Once you know the difference, you focus on accumulating assets rather than liabilities.The feeling is great when you are able to get out of rat race and move onto financial fast track. No words can describe my feelings when I first got out of rat race. Why? When you're on financial fast track, money is no problem as it will come regardless of whether you work or not. You do not depend on a job to receive your money anymore. You are totally free to do what you love. So its time to forget the golden watch and the dream of easy sweet retirement at 65.

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