Forums: Discussions for entrepreneurs and small business.

Mark, you are amazing!  Thanks.   Are you a coach or mentor?


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Richard Johnson
New Ideas for a New World

Craig L,

I hope I am not repeating anyone else. I`m sorry but I only took time to read the first page. I`m not sure how exactly to go about this, but let me preface it by saying I mean no offense to anyone. First, I`d say that you`ve locked yourself into considering only E and S methods of making money. If that doesn`t immediately make sense to you, I`d recommend reading a book called "The Cashflow Quadrant" by Robert Kiyosaki. If nothing else, at least google image a picture of the cashflow quadrant, or wikipedia it so you understand what I am saying. E and S are income earning categories, and acquire income by the same forumla, Your Time for Their Money. You trade time either for your boss`s money, or for your customers, but you trade time for money indeed. With the definition of true wealth being Time + Money, you`ll see that a system that trades one for the other can not create true wealth. You can be rich, but not wealthy, and I like the definition of wealth better personally. I`ll assume you do too, based on your topic of post. I think what you are looking for is B quadrant income, where a leveraged system creates money. This form of business, while harder to find, requires much less of a time investment (and is in fact an investment, and not an expenditure) and can be easily built on the lunch hours, evenings, and weekends outside of work. In some cases, in a remarkably short time span. Does this make any sense? Give me a shout back and I can fill in anything that didn`t. I`m a cube farm escape artist. Free since October 2007. :)



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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward

Alright, I took a look at the Kiyosaki quadrant. (Interestingly, we`ve had some recent discussion regarding some of the untruths to the Rich Dad, Poor Dad writings.) I understand that the E/S side of the quadrant could be construed to mean trading or exchanging your own time for money.

I also understand the B/I concept, with the "B" meaning purchasing a business, or otherwise "coming to own" a business or system.

I think one reason affiliate marketing programs and MLMs seem to be so successful these days, is that they`re offering this "B" type of opportunity. However; even if you own a system and have people work for you, you`re still investing time of some sort. So, in my opinion, another way to phrase this involves the *ratio* of time to money.

Unless you`re given a large sum of money to invest, and someone else manages your portfolio, then you have to spend some amount of time relative to increasing money. If you can spend 1 hour a day, and earn $1,000, that`s great.

So how does someone who`s an employee---a common type of job---come up with the money to buy a system or business? Aren`t we talking about pretty much the same problem, just from a different direction?

Then there`s the type of person who`s looking for a "lifestyle" business, perhaps with something involving personal creativity, production, or hands-on connection.

Craig,

I was just checking the site for responses real quick. I am SUPER tired from being up 38hrs straight including a 14hr round trip from central Arkansas to Houston, TX so I`m gonna get some sleep. I`ll respond to this post and the other later this evening.



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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward

Alrighty Craig,

Got some sleep behind me. I`ll just take it paragraph by paragraph for simplicity:

P1: What "untruths" are you talking about concerning Kiyosaki`s writings? And what do you mean by "construed" as trading time for money. Employees definitely trade time for money, by the hour or by salary, there is still a set time for a set amount of money. Self-Employeed is really no different, although the rate is generally better. If you think about it, must people who own an auto shop or burger shack or small accounting business or any S business still work a 40+hr week. Employees don`t work as hard as when the boss is gone, so there is still a serious time element involved.

P2: Agree with you here.

P3: I`m with you except for the second sentence. Yes, there is always a time component. It`s the way time is used that marks the difference. In the E/S hemisphere, time is TRADED for a finite sum of money. In the B/I hemisphere, time is INVESTED for a passive residual income. This is a huge difference. It is the difference between having your one-time work bought off on the spot, and being paid on a residual basis for work done once. Any thoughts?

P4: I agree with you here. You are addressing the I quadrant. Kiyosaki fairly defines an investor as a certified millionaire who lives solely off of returns on his investments, and can afford to invest 1/4 million dollars today, lose it tomorrow, and it not effect his lifestyle. Of course none of us are there yet, or we wouldn`t be on here. You get here by dominating in the E, S, or B quadrants. However, you are most likely to get here the further you go the right on the 3 i just mentioned (B more likely than S more likely than E). Of course there are company CEO`s who are E`s and make 100`s of millions a year, but they are FAR and few between. And at any rate, the richest people in the world are in the B quadrant anyways, not the I quadrant.

P5: To your two questions here, I`d first say "no", the situation is not the same (to your second question). To your first, I`d say you answered it in paragraph #3, partially. MLM is, in my opinion, akin to pre-franchising. It has some problem areas, but it has some novel and brilliant aspects too. Like franchising prior to Ray Krocs McDonalds franchise. I`d say the answer is the "McDonalds" of MLM:  FPO (Field Profit Only). Which I believe fixes the problem areas of MLMs, even though I still believe there are a number of legal, moral, ethical, and profitable MLMs out there, I think FPO will be seen to dominate MLM over the next decade, and can be build in the off hours after work of an employee or self-employeed individual.

P6: The last statement you pose is, in my opinion, the people who will run S businesses. Everyone can`t be any one thing, E, S, B, or I. However, any one person can be any of them. If someone has a heart for some specific self-employeed endeavor, I won`t talk them out of it. My dad is a perfect example of that, and finds great satisfaction in owning an S business providing accounting services. And he is aware he could make more in the B or I quadrants. However, for someone looking to maximize results in a FMC environment, I would definitely suggest a move to the B quadrant.

Any thoughts, questions, ideas, or issues?

Look forward to hearing from you.



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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward

Let`s keep in mind the purpose of this topic. It`s to generate ideas for people who have a finite block of time to spend toward gaining money--hopefully an income.

If they are an employee, they have little time to invest in a startup business. Yet if they start a business, they typically use ALL their time on the business. That leaves no time for being an employee. The question is how to get out of the loop.

Regarding my use of the word "construe," in the E/S hemisphere. I don`t mean that Kiyosaki is pulling the wool over someone`s eyes. I mean that there are more than one reason why people are an employee. It isn`t all about trading time for money.

To that end, the person within the quadrant has varying perspectives of their actions---they can hold as their motivation the time-money exchange, or hold as their motivation something else. "Construe," in this context, applies to the underlying motivation and perspective.

For example, as a musician, my interest is in hearing my music "out loud," and in the enjoyment I get from people who like the music. Same with being a writer---to see my thinking in a book, and hear people`s thoughts as they react. The money is of course an important part---at some point---but not at the start.

So if we construe the E/S hemisphere as being only about time and money, then it`s a viable diagram. If we construe employee and self-employed as being about creating a long-term "thing," then the exchange formula doesn`t work the same way.

The reason it matters is that many entrepreneurs aren`t initially starting a business for the purpose of only the money. They don`t see it as an exchange of time for money. Instead they see it as an investment, more aligned to the "I" side of the quadrant.

With old-age funding about to go down the drain, one reason a person starts a business is to have a retirement income. Is that being self-employed, exchanging time for money? Or is it investing effort in an idea for the purpose of future returns?

Regarding untruths from the RD,PD book, I don`t know yet. Here`s the topic, and here`s a site referenced. I`m not all THAT interested in Kiyosaki so I haven`t yet pursued the references, but that`s what I meant about the "recent discussion."

Another example of unstated premises has to do with how a business lists their profit. Many business analysts, speaking with an entrepreneur, will suggest taking the total in materials as a cost, then the total in manufacturing labor as a cost. Deduct those from the revenue (and divide up stuff per unit), and you end up with a profit.

But suppose the entrepreneur is also the manufacturer, for instance in a bootstrapping craft item. Do they pay themselves a salary for labor? If they do, they net almost nothing from the sale of the item (initially). But if they don`t pay themselves the salary, they still get the remainder after materials. So is this a "salary" or a "profit?"

Again, it comes down to how does someone who badly wants to get out of the "cube farm" start a business? Where do they get the time? It seems to me, so far, that they either invest a sum of money in an already-going concern, buy into a business, buy into an MLM or affiliate system, or they partner with someone who can provide effort or capital.

I definitely see where you are coming from. It isn`t ALL about the money, but we all need money, so at first it is about that. We do have to eat and have a place to sleep, so it is a concern. For most, if they can make as much money in a business as they do at a job they want out of, they can then quit that job. Obviously I suggest finding a business that can be build during off-work hours at their job, without breaking the bank, and also of course something they enjoy, or that has a purpose/cause they believe in. This will make them better at it. If nothing else, they can find a business that creates money well, and is time efficient, and then when they have time and money later, find something they enjoy doing, perhaps an S business of some sort.

I think Kiyosaki`s material is accurate and valuable information. He is only concerning himself with the way money is made. When it comes down to it, E/S trade their time for someone else`s money, and B/I invest either money or time into a system that generates passive residual income. He`s not saying whether or not it is right or not for some people, or making a claim that any one area is better than another, except from a financial standpoint. Clearly, from a financial standpoint alone, the B/I side is the side to be on. Music can be a B business, since you mentioned music. When you perform a concert, you are performing in the S quadrant. When you make CDs, you are performing in the B quadrant, as your investment of time into developing the CDs can create PRI as some company copies and sells the CDs for you, and you`ll get a check in the mail.

You have listed the ways you see to get out of the cube farm. I am curious as to why you are not trying any of those things (investing in a running business, joining some form of MLM, or partnering with someone who can provide capital). Maybe you are, and just haven`t mentioned it. I would be interested in knowing which you are doing, if you are, or why you aren`t doing any of those things, if you are not.

Look forward to hearing back.



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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward

Yes, this is the crux of the issue. How, exactly, does someone find this magical "thing" where they can make as much money in a business as they do at their job?

We have a lot of people passing through the forum who`d love to quit their job. But they do need to eat. So sure, if---and it`s a big "if"---they could transparently pass from being an employee to being a business owner, they`d do it in a minute.

Can they?

In our situation, we have two of us---myself and Kathy. I was able to provide some income by working, initially, and that helped in the bootstrapping. Kathy would work on flags, I`d help when I had time. Then, as we moved along, I ran out of money, but the business was bringing in just enough that Kathy could cover some of our expenses, and I had more time to work.

So our way out of the Catch-22 was to have two people, one covering money to eat, the other building the business. In our combined spare time, we both would work toward improving the business.

In a marriage, perhaps this would be the solution: where one person quits their job, the couple reduces their lifestyle, and the other person builds the business. Couldn`t this also work without necessarily being a marriage? I think so, where there`s a sort of partnership formed for the sake of the business development.

Absolutely they can. I know many people who have done exactly that: Get out without having to work some sort of magic, or having one spouse work as an employee while the other handles the business. Without breaking the bank or using up all of there spare time. In fact, most do by keeping things the way they are, and simply trading out some time in the evenings, at lunch, and on the weekends that they would normally use to watch tv, relax, go to the movies, go out to eat, etc. They do this until business income is greater than employee income, and then quit their jobs. They do it leveraging a system, the B type business method, so that their time outside of work is an investment that pays a passive residual income, instead of being a trade of time for money. It is absolutely available and possible for anyone with the work ethic to do it. I`m sure there are more, but I am aware of at least three opportunities that leverage a system and create such results as I was just discussing. I wouldn`t say it is a big "if" at all. I know from experience that such opportunities exist, it is only a matter of knowing of them, and capitalizing on them. If it is of interest to you, I`d be more than happy to talk to you about it, or anyone else. My business in life is to help people out of the employee world that don`t want to be there, and into the business world, where they want to be. If they like being an employee, fine by me, someone has to. But if they don`t want to be, they shouldn`t be. All that is necessary is a combination of "don`t want to be an employee" and a willingness to do what is necessary to not be. If someone can answer the "why?" questions, I can handle the "how" questions.


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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward

So, I can`t figure out why the first paragraph where you quoted me is there twice, but whatever. Just ignore it. :)


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Team: Leadership Development Service Provider
"If you`re going the opposite direction of everyone else, keep going." - Sam Walton
"If you know how much you make per hour, you don`t make much." - Orrin Woodward