Are you working for money or is your money working for you? That is a familiar statement to those that read RichDad books. I’ve just finished reading RichDad’s Cashflow Quadrant all over again. It is not my first time of reading the book. But this time around a question really kept ringing in my heart. What kind of Income are you earning? If I stop working now, can I sustain my present level of monthly expenditure?
There are two kinds of income.
Income Earned By Working For Money
This is where most people start from, except you inherited some income generating asset from your parents. It consists of Salaries, Wages etc. The issue here is that you only earn by working. If you don’t work, you don’t earn. Once you stop working the income stops. So, it is not the best source of income. For many small scale entrepreneurs in Nigeria, this is the case.
Income Earned By Your Money Working For You
This refers to income generated from assets you own. Here, you invest in an asset and the asset in return generates passive income for you. Even if you decide not to work again, as long as you have a system in place to manage and maintain those assets the income keeps flowing.
Now that I’m done with the brief definition, let’s get back to my question.
What kind of Income are you earning?
Initially, when I read Cashflow Quadrant, I was congratulating myself that I receive income from different sources. Some are earned by me working while some are from assets that I owned. However, now I am more interested in the percentage of the passive income to the total income.
I sat down and wrote down all the income I earned monthly. I then classified them into Passive Income and Non-passive Income. The analysis was an eye opener. I realized for the first time that even though I was earning passive income, it was less than 10% of my total income. Invariably, I am still in the rat-race. I’m still busy working for money. That means, if I stop working today, I will not be able to sustain my present standard of living. The income from my assets is grossly insufficient to cover my monthly bill.
Since I made that discovery, I’ve been working on a plan to change my strategy. I don’t want to work for money at my old age. I will rather spend my time doing what I really enjoy doing while my money works for me. So, now is the time to start acquiring assets that will generate the volume of income that I desire to earn so as to sustain the kind of lifestyle I want to live.
The Cashflow Quadrant is a great book for small scale entrepreneur to read. I recommend it to my fellow Nigerian Entrepreneurs. It offers some great financial knowledge that would have cost you years to acquire. The paperback edition is readily available in bookshops and is not expensive. Please note that this is not a product review. Now it is your turn to answer the question, What kind of income are you earning? Tell us in a comment. Cheers.
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Tags: Income, Nigerian Small Scale Business, Passive Income, Small Scale Business
Well,i think its nice having your money work for you.I’ve been waiting for an opportunity to a member of FOREX, even i had it once but i guess it was not time for me to be ib.But right now i think its time for me to be,so i need your help,because i dont have any knowledge of it.I’ll be waiting for reply as soon as possible.Bye and thanks.Obadiah.
EXCELLENT POST! My income is still 100% active. If I stop working today I will most definitely not be able to survive on my own. How I wish my folks owned NNPC then I can relax and await inheritance. LMAO.
Seriously I’ve got some serious work to do with regards passive income now that yeye Google has decided to delay the delivery of my adsense PIN. Affiliate marketing is showing some light but not enough to equal the balance between passive and non-passive income.
I hope I come up with a brilliant idea soonest!
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I’m not sure it is Google Adsense that is delaying your PIN. I guess it is our dear NIPOST. It took 2 attempts before I eventually got mine. It was sent twice and both arrived after a very long wait.
What Zip code did you use for Google Adsense? I used 234100 which I think corresponds with Lagos. I hope I’m not wrong and that’s probably why it’s delaying. Pls confirm. Thanks 😉
.-= Udegbunam Chukwudi´s last blog ..Hostgator Web Hosting Order Requirements For Nigeria =-.
@Chukwudi
Whoever gave you that zip code gave you a wrong one. Since I don’t know your particular location, I can’t get your zip code for you. However, you can easily do it yourself. Visit nigeriapostcodes.com. One the left hand side where you have a sidebar, click on POSTCODE FINDER. You will need to key in some small information and then you will get the right zip code you need. It is obvious now that the long delay in your receiving your Adsense PIN from Google is because you’ve been using a wrong zip code. “No be NIPOST cause this one” 😉
No be lie oh! I just checked the link and my correct postal code was meant to be 100264 of I’m not wrong.
Thanks for the heads up 😉
.-= Udegbunam Chukwudi´s last blog ..Hostgator Web Hosting Order Requirements For Nigeria =-.
You’re welcome. You did the right thing by asking for help. I’m heading to your blog right away because I need to read your latest post. Cheers. 🙂
Hello,
I am new to this blog but i have heard alot about google adsense. please can you enlighten me on it.
i will be most grateful to you.
please contact me through my email
romeobukkuyum@yahoo.com
thankyou
i am earning from many sources…but i am growing my passive income source…cash flow quadrant is a great read…cheerz
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[…] on how to Get More From Your Site’s Visual Acreage.NaijaECash pops the most interesting question What Kind Of Income Are You Earning? : Passive Income (Income Earned By Your Money Working For You) or Non-passive Income (Income Earned […]
Good to be back here. You are indeed doing a greta job. Your post is as interesting as usual. I recently started a personal finance section for my website. It is free-standing too. Many of the tips I have put together are things that I wish I know when I was back home in Naija. Now that I am here, I have applied many of these principles, mainly in a refined more automated way and it is mind-blowing.
Cashflow quadrant made a good read when I read it. However my single contribution to every Naija person visiting this page today is to READ MORE BOOKS! Read about finance, life,nature religion etc. When driving get audio CD books and play. The radio will always say one calamity or the other. If you do not hear it in the news, your neighbor will tell you or you will get a text message. However, the secrets of the ages lie in BOOKS.
Thanks for having such a great blog. I will send you a few nice posts soon.
Osita
Great post we are a Forex broker looking for good traders to win a car http://www.forex-hunt.com earn high incomes
I’m at the bridge point between both of these. I’ve been very busy building passive income, it’s really starting to take off but it does require me to put a lot of work in.
As they say, the more you work you put in now, the more you’ll earn without it later on.
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Murlu, the initial hard work required in building a passive income generating system is what scare most folks. Every passive income generating system will have an incubating or development time whereby the returns on investment may not necessarily justify the labor, time and fund expended on the project. That alone is a risk that many don’t want to take. Human beings love instant gratification. We love security, we naturally don’t like to take risk. However, refusal to take risk is the enemy of success.
I myself is in the same position with you. I’m earning from paid employment while building business systems that will generate passive income. Once my passive income exceeds my present income from paid employment, I will simply resign. I really wish I’ve started much more earlier. I would have been out of the rat race by now. But like they say, it is better late than never.
it’s nice to have money to work for you. like myself i earn a passive income from two of my blogs on google adsense and how to build blogs for little or nothing for start-up enterprenuers. i am earning from paid employment and also doing this it is very nice because i do what i like best doing.but if you want a blog please give me a buzz at my mail http://www.ideasonlinebusiness@yahoo.com
i’m the kind that u would reffer to as start-up entrepreneur, but the point is that i really dont know how to go about the internet and other ways to get “money work for me”. i relly need guidance.
I am about to launch the biggest job site in the Nigerian history
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