LESSON #6: Self Employed or Business Owner?

By | June 17, 2008
309 Comments

In the next lesson, I’m going to get more specific about exactly what kind of business we’re going to build, but first we need to get past a fork in the road.

You’ve decided that you really do want to make money on the internet, and now there are two paths set before us…

(Watch this video…)

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Main points:

  • Self employment vs. Business ownership. For many years I didn’t understand the difference. It will be beneficial for you to understand it before embarking on this business venture.

  • Cashflow Quadrant by Robert Kiyosaki: Employee, Self Employed, Business Owner, Investor

  • Each of these four quadrants make money in different ways.

  • Employees… You get paid for your time. You’re trading hours for dollars. You’re working for someone else, and in return they give you a paycheck.

  • Self employed people work for themselves. Like employees, they often trade their hours for dollars. Or perhaps they work for a fee or a commission. There are many examples of self employment, such as construction contractors, consultants, realtors, and even doctors in many cases. They’re not working for someone else, but their income is primarily dependant on themselves doing the work.

  • Business owners use leverage to make money. Most commonly, they hire people and leverage other people’s time. That way, the business owner doesn’t have to do the work and they can scale their business larger. The benefits of being a Business Owner rather than self employed are generally more freedom and ultimately more wealth.

  • Investor’s let their money do the work. They put their money to work making more money.

  • MYTH: You’re not making enough money. FACT: You need to be a better investor.

  • the Investor quadrant is for everyone.

  • If your goal is to never work, then ideally you need to end up in the Business Owner quadrant, not the self employed quadrant.

  • Virtually any self employment situation can be turned into a business owner situation if you know how.

  • The business model I’m going to teach you is really a combination of the self employment and business owner quadrants. And it’s going to be up to you if you want to fully leave the self employment quadrant and hire people to do the work that I’m going to be teaching you how to do.

    Action steps:

    1) If you haven’t read Cashflow Quadrant, read it. You can most likely pick it up at your local library for free, otherwise you can pick up a copy of it here on Amazon.

    2) Determine which quadrant(s) you are currently in, and which one(s) you WANT to be in.

    There’s no right or wrong answer, because it’s really a matter of personal preference regarding how you want to spend your time and how you want to make money.

    As always, you are welcome to post your questions and comments below.

    Have a great day!

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    • 309 thoughts on “LESSON #6: Self Employed or Business Owner?”

    1. KEVIN O.

      Hi Eric,
      Will you be publishing all your lessons on a DVD, such as a video library.

      Reply ↓
    2. Alison

      Hi Eric, i’m really enjoying your down to earth and friendly approach. your a great coach!!!
      I’m a complete beginner at running an on-line business. i bought the x-site pro V1 last year to build my wesbite and Joel Comm’s re-sale templates DVD’s just a couple of wks ago. So your lessons will definitley help me get it all together. its like learning a foreign language that you are making easy to learn.thanks Eric.

      Reply ↓
    4. Kay

      I’ve read both “rich dad, poor dad” and the “cashflow quadrant” and have personally attended a few of the rich dad seminars. Although I didn’t buy anything, I did learn enough from attending to save me quite a bit of money and had a better understanding of investment in property. But this isn’t where I want to make my fortunes, I’m not passionate about real estate.

      I am passionate about helping others and I am looking forward to your next chapter in moving forward towards my own goals.

      Kay
      the Marriage Mistress
      http://www.MarriageMistress.com

      Reply ↓
    6. Cashflow Quadrant 10 Capter Summary

      Great work Eric! The link above will take you to a 10 Chapter Summary of Cashflow Quadrant… the action step Eric encourages in this lesson. While you should read the whole book this summary will give you the basic overview and keypoints, this will Help you stay on pace with Eric for lesson #7(as the book is over 200 pages). Eric has approved the link I am posting for you..so thank him and leave your comments here before you read the summary:) Thanks Eric! Pura Vida! Nico

      Reply ↓
    9. Eric Post author

      Actually I got my hair cut real short a couple weeks ago on my wife’s request… maybe I’ll post a pic sometime 😉

      Reply ↓
    11. JT

      This link went directly to the summary not to bizsum… didn’t have to sign up for any trial

      Reply ↓
    13. Joseph

      It is about time that someone came thru with their promiss to teach a step by step lessons.
      Great start, keep up the great work. Thanks

      Reply ↓
    14. Bill Burniece

      Great stuff Eric. I cannot thank you enough for all of the effort you put into these daily lessons. Very generous of you. 🙂

      I live right down the road from you in Arvada – Bill

      Reply ↓
    15. Allen

      Once again another winner! Thanks Eric. BTW, Robert Kiyosaki has a book called “Rich Dad’s Guide To Investing” in case others here want to check it out. I haven’t read it yet though.

      Be Well…

      Reply ↓
    16. Jim Cook

      Hi Eric,

      A bit of Jim Rohn advice …
      “To become financially independent you must turn part of your income into capital; turn capital into enterprise; turn enterprise into profit; turn profit into investment; and turn investment into financial independence.”

      Probably every major player both online and offline (Kennedy, Brian Tracy, Kiyosaki … etc.) listens with extreme intent when this man speaks.

      Oh, a little dig, Eric … he’s an MLM man.

      Also, Kevin Hogan of Coffee with Kevin Hogan gives a bit of a different story particularly in reference to investing.

      If your readers would like to read it – after you have – I think it will impress upon them the difference between an “investor’ and a “good investor”.

      the only reason I bring this up is because of a personal friend of mine who retired a couple of years ago at the age of 57 with a net worth of approx. 10 mil. with the recent stock market problems vis-a vi the housing industry, he dropped 60% of his net worth – almost overnight. I won’t mention the name of the financial house involved – most can figure it out.

      He made good money and was a good investor but got lazy and let someone else care for his portfolio.

      What did our founding fathers (USA) say?
      The cost of freedom is eternal vigilance.
      I think eternal vigilance is what makes a good investor. How true!

      anyway, Kevin Hogan leans much more towards business ownership than investments and shows the correlation with some neat facts and drawn conclusions from the US government’s end of year report for 2007.

      Here’s a quote and then a link to it on one of my website pages. I think you’ll find it VERY Interesting.

      “The answer to your security over the next 1,3,5,10,20 years isn’t in an “investment plan,” it isn’t in your “retirement account,” your 401K, in fact, that false sense of security very well could be the undoing of MOST people’s financial future.”

      http://www.never-refuse-money.com/greatest_net_worth_strategy.html

      Reply ↓
    17. Gaida

      Hi Eric,

      Yet again another clear & concise lesson and the importance of knowing which quadrant we belong or want to belong to. Ive also read a few of Robert Kiyosaki books which are brilliant.

      It’s so true what you said about being a smart investor and you have to learn by educating yourself….and as yourself I’ve made some great investments & not so good.

      Hopefully my teenager will take on some of the financial info I have to share.

      Reply ↓
    18. Jeff Miles

      Unlike other options given, investing, rightly pointed out by Eric works for everyone.

      Reading Kiyosaki’s books gets you in the right mindset to make your money work for you.

      But there is just one BIG problem to making money from investing. Do you know what ?

      Its finding the right opportunity at the right time and price !

      About 2 years ago, I stumbled on an exciting way to get access to some of the best investment opportunities by a team of 21 top grade analysts to do all these grunt work.

      I make full time income on this.
      I invest , place stop loss to protect downside risk and rake in the profits !

      Nothing could be simpler. Just requires some amount of patience to wait for your investment to reach the expected profit level.

      For more info contact: jeffmiles1968 @ yahoo.com

      Reply ↓
    20. Stefano

      Great lessons! I have read Kyosaky’s books but never applied them! You give me the boost to do a clear action on my job. Thanks

      Reply ↓
    21. Mike

      Good stuff Eric. Thanks! I look forward to more of the lessons.

      I’m go the audiobook first. Most libraries carry it. Robert Kiyosaki reads it to you himself. AAA+++ rating. Then later, purchase the book.

      Thanks again,
      Mike

      Mike

      Reply ↓
    22. Goffin

      Nico, That’s just a sneaky way to redirect people to your forum. I thought this was going to be about ethical internet marketing. Eric, did you really approve this?

      Reply ↓
    23. Frank Wohl

      Hi, Eric!
      Great informations!
      I have a question – is it a good idea to invest in
      well established online website?
      Will you please tell me your opinion.

      Thanks
      Best regards

      Reply ↓
    25. mohd ariff

      Hi Eric,
      Actually we have some knowledges of today lesson, but to be self employed or business owner this is something that we need to learn.
      May your lessons put us in the right track to success on this business.

      Ths, regards
      Mohd

      Reply ↓
    26. Ken Wood

      Hey Eric,
      You caught my eye a few months ago. I got the impression that you might be a person of ethics after reading some of your material.
      I want to thank you for this series and for your positive infuence on others. I am a classic study in paralysis by analysis.
      I am glad to report than I am experiencing a little bit of movement and feeling in some of my extremeties. lol
      Thank ya , thank ya very much.
      I ask the God of Abraham to bless you in your missionary efforts as I am sure He will.

      Reply ↓
    27. Linda McElwrath

      I am loving the lessons, Eric. My only complaint is that they are not arriving fast enough! Is there any way to complete these lessons at my own pace rather than having to limit myself to one lesson per day?

      Thanks
      Best regards

      Reply ↓
    28. Sandra

      Hi Eric, this is great. I will call the library to get the other book. I read, “Rich Dad…” I would love to have the opportunity to work first, self-employed, and then have my own business in the same field. This is the type of information I need. God has blessed you. My blessings are on the way. Sandra

      Reply ↓
    31. Tomas Ortiz

      Hey Eric, Every day I sit and watch your videos & listen to the wealth of information you offer. Now every morning I’m checking my email for the next Lesson. So keep them coming.
      Till the next time.
      Thanks Eric.

      Reply ↓
    33. James Tan

      Hi Eric,

      Thanks so much for your lesson. It is fantastic and now finally i have understood which quadrant my online business have fallen into. Thanks once again!

      James

      Reply ↓
    34. Nicky

      This is excellent stuff.

      And I want to say thanks to Nico for posting the summary and also to Jim Cook for the link… both of which I’ve bookmarked. Interestingly, I have a foot in E (financial) have a plan for moving fully into S (I’m a copywriter who enjoys writing) and my intention is to move to B then I, then be in SB and I.

      The CFQ actually helps clarify things for me really well.

      Reply ↓
    36. Lyn

      Eric, thank you so much for these videos. I look in my email each day to make sure I listen. It’s helping me to focus….as they say “how do you eat an elephant?– one piece at a time”

      Reply ↓
    38. subodh

      Hi ,
      Eric .

      Good work , keep on writing o money making methods on internet as every one wants financial freedom .Im also trying to built a website on info products . Website on cost reduction methods for manufacturing industries .

      Thanks a lot once again
      http://www.factory-costreduction.com

      Reply ↓
    40. sean

      love your stuff but what happened to lesson 6?
      it stops at myth 1 please help I would like to finish the lesson thank you sean

      Reply ↓
    41. James Stephenson

      Alison,

      You sound like you are in the same position I am. I am curious, how do you intend to use the re-sale templates? I bought them too and am trying to decide just how I want to use them.

      Jim

      Reply ↓
    42. Eric Post author

      It is not for certain, but I most likely will be releasing them on DVD or DVD-ROM when they are all done.

      Reply ↓
    43. Eric Post author

      There’s a lot of ways to use them, but one of the best ways is to resell them on their own, or in conjunction with other products (ie. use them in whatever niche you’re in)

      In case you hadn’t seen it, here’s a tutorial I made to show IRT customers how to get setup…

      http://irthelp.com/

      Reply ↓
    44. Eric Post author

      Yes I told Nico it was OK. The forum was not my idea, but I’m cool with it as long as it doesn’t detract from the lessons.

      Reply ↓
    45. Eric Post author

      I’ll make note of it and I’ll try to make sure it’s included somewhere in the series. Thanks

      Reply ↓
    48. Eric Post author

      Frank- there’s a lot of variables there, so it just depends. If you’re a newbie, then no I don’t think you should buy an established site. I think it’s better to build your first online business from scratch and figure out how to make it successful. Otherwise, you could end up investing a lot of money in an existing business, only to watch it go downhill because you don’t know what you’re doing.

      On the other hand, if you KNOW HOW to run a successful online business, then it could be totally worthwhile. There are many scenarios…

      -You could take a site that someone is tired of and simply add an income stream to your overall business.

      -OR you could “flip” sites… buy ugly sites (that have good business fundamentals)… fix them up and sell them for a profit.

      -OR you could buy an existing business and scale it (hire people and grow a $100k website into a million $ website). The big companies do this too. Google and Yahoo are often buying million and multi-million dollar established websites and scaling them to the next level.

      Reply ↓
    49. Eric Post author

      I’m currently still making the lessons, and releasing them almost as fast as I can 🙂

      Reply ↓
    50. Eric Post author

      The whole thing is there. Perhaps try closing all the programs on your computer. Clear your internet cache. Then come back and try again without other programs running…

      Reply ↓

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