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Level 6: You are among “the Kennedys


canada goose Weekend Inspiration: Create an Owner Mindset Paula Pant, Afford Anything Dec. 2, 2011, 1:43 AM Note from Paula: Every Friday I write about a book. I’m not trying to craft an opinionated review. I prefer to explore some of the book’s key ideas, share insights, and tell funny or inspiring stories. I call this segment “Weekend Inspiration.” ***** When I started freelancing, I thought: “Cool! I’m working for myself!” Every morning I pour myself a cup of coffee, pull on a warm fuzzy pair of slippers, and plod into my home office, which has a view of the downtown Atlanta skyline. I watch traffic build on the busy streets while I sit at my desk wearing pajamas. I thought I’d be satisfied with this. But I’m not. I’ve recently started to realize I’m only on the first step of a much longer road. I “work for myself.” I ditched my dental plan in favor of a location-independent life, and that’s nice. But I’m still a glorified employee. I trade my time for money. I write for magazines and websites; I don’t OWN those magazines or websites. Freelancers enjoy freedom; people with traditional jobs enjoy security and benefits. Yet we share a common shortcoming: We aren’t the owners. We have income, but no assets. At least, not yet. This idea has been kicking around in my head for a few months, but it gelled this week after I read Cashflow Quadrant by Robert Kiyosaki, the bestselling author of the Rich Dad, Poor Dad series. It’s an old-school book – at several points, the author advises people to “listen to cassette tapes” – but if you can overlook the obvious 1990’s references, the wisdom in this book is classic. Kiyosaki classifies people into four groups: employees, the self-employed, business owners and investors. Listen to a person’s words, he says, and you’ll have a window into which mindset they hold: The employee says: “I’m looking for a job with good pay and excellent benefits.” The self-employed says: “My rate is $35 an hour” or “I charge a 6 percent commission.” The business owner says: “I need to hire a President who will run my company.” The investor says: “My team will study the valuation of that company.” Loads of people – myself included – operate in multiple roles. Most of my income comes from my self-employed pursuits, but I play the role of an investor as I foray into real estate. It doesn’t matter where your current income comes from. Your mindset is what matters most. The bigger point is to ask yourself what kind of mentality you have: an employee mindset or an owner mindset? In other words, who you ARE is more important than what you DO. That’s why none of Kiyosaki’s books contain how-to information. Instead, they’re conceptual guides on the psychology of ownership, freedom and wealth. What is Wealth, Anyway? In this book, Kiyosaki defines “wealth” as “The number of days you can survive without working … and still maintain your standard of living.” In other words, “Wealth is measured in time, not dollars.” If your expenses are $2,000 per month, and you have savings of $10,000, your wealth amounts to 5 months. Your goal, obviously, is to create a lifetime of self-sustaining wealth. 7 Levels of Investors Since many people benefit from self-exploration, Kiyosaki outlines the “7 levels of investors.” Which one are you? Level 0: You have nothing to invest, because you spend everything you earn.Level 1: You borrow money to afford your lifestyle. If you invest, you do it with borrowed money. Many outwardly-rich people fall into this category. Level 2: You’re a saver. You put money into “safe” vehicles like savings accounts, CD’s and money-market accounts. You save for the sake of later consumption (i.e. saving for a vacation or a house) rather than saving to invest. (Note – I was a Level 2 investor a few years ago, when my singular goal was to travel the world for 2 years. I saved with gusto for the sake of taking that trip, and it was one of the best decisions I ever made.)Level 3: You participate in the company 401(k) plan and you might even have a non-retirement mutual fund or two. But you also say things like “I don’t have time to learn about investing,” or “I’ll leave it to a professional.” Some Level 3 investors read the Wall Street Journal, buy a stock based on a “hot tip” from Jim Cramer, and think that they’re a player in the game. They name-drop — “my brother at Merrill Lynch says …” – so they can feel like a bigger player. But deep down, they’re just following the crowd. Level 4: You have a long-term plan or idea. You invest in tax-advantaged ways and take advantage of dollar-cost averaging. You have minimal debt and admire Warren Buffet. According to The Millionaire Next Door by Thomas Stanley and William Danko, most self-made millionaires are Level 4 investors: they own a business www.musichouseltd.co.uk , drive a used car and invest in tax-advantaged ways for the long-term. Level 5: You have a solid financial foundation, so now you pursue bigger, more aggressive investments. You focus your investments in a few areas in which you’re highly knowledgeable – perhaps you own a shopping center or a 40-unit condominium building. You have a formal or informal team of coaches, mentors and advisors that you use as a sounding board. Level 6: You are among “the Kennedys Canada Goose factory outlet , Rockefellers, Fords, Gettys and Perots.” You create the stocks that other investors buy. Final Thoughts About Cashflow Quadrant This Book Is For You If: You want to read a conceptual framework that explores the nature of investments, ownership, work and freedom. This Book Is NOT For You If: You want step-by-step guidance. If that’s the case, I’d recommend you find a “How-To” book that’s tailored to the specific action you want to learn about – “How to buy dividend stocks” or “How to flip houses.” Read more reviews of Cashflow Quadrant by Robert Kiyosaki.Sign Up for Free Tips on Affording Anything: I’d Like to Thank the Academy … The host of the Carnival of Wealth says I’m his favorite Nepalese-immigrant personal finance blogger. Stiff competition for that slot! I’m in this week’s Best of Money carnival! Considering there are only 10 spots, that’s an honor. Thanks! Thanks to the Carnival of Personal Finance for featuring one of my posts. Let’s hear it for the Festival of Frugality, which was kind enough to applaud me this week. Photos courtesy Casey Serin and David Paul Ohmer. Read more posts on Afford Anything » Read the original article on Afford Anything. Copyright 2018. canada goose parka