Cash Flow Quadrant Forex Trading

Robert Kiyosaki Applying The Cash Flow Quadrant To Forex Trading

Those of you familiar with Robert Kiyosaki's teachings will know about his "Cash flow Quadrant" book and how it goes into extensive detail with regards to 4 very specific groups that we people all fall under.

The 4 groups are called the cash flow quadrant and goes as follows:

The Employee, the Self-employed, the Business owner and the Investor.

The ideal quadrant for anyone wanting to get wealthy is to be under the Business or Investor quadrant.

Why?

Because it allows you to exploit leverage to its fullest potential, which means that you can continue to increase your income by working the same amount of time (if not less) as opposed to an employee or self-employed person who can only make "x money per hour" worked.

Now, Robert Kiyosaki emphasizes continually on becoming an Investor because this is the quadrant that allows passive income to be generated. This is the end goal, to become an investor who can generate passive income no matter if he/she gets up for work or not (and This is my personal goal).

So in order for this to be achieved in the fastest possible way, Mr. Kiyosaki suggests you build and grow businesses to create cash flow which then allows you to "invest" and eventually become a wealthy "full-time" investor.

So what the hell does all this have to do with trading Forex?

You see, there is a false belief traveling the Internet whereby people tend to believe that trading is nothing more than a mere job, when in reality they don't have a clue how powerful this "alleged job" truly has on impacting their life's!

First of all, let's get something straight. Trading Forex can be anything you want it to be:

- It can be a hobby (a very unprofitable hobby I may add).

- It can be "just another job" (like many call it online).

- It can be a business.

- It can be an investment and wealth creation vehicle.

If you understand HOW to structure your Forex trading correctly, you will be in for the biggest ride of your life Guaranteed!

So bear with me as I first explain what exactly occurs and differs between the Business quadrant and the Investor quadrant:

#1 Business owners develop "systems" that contain employees for them.

These "business systems" are nothing more than step by step rules and parameters that the employee must adhere to on a consistent daily basis, also known as "jobs". Some of these rules could be:

- The days the employee works.

- The time the employee works per day.

- The full responsibilities of the job held, whatever the business may be.

In exchange for this, the business owner will pay the employee a salary, meanwhile the business owner creates cash flow that then allows him to "invest", with the ultimate goal of creating residual income.

#2 Investors create and own money systems that create more money for them.

These "investment systems" are nothing more than entry, risk management and exit rules for the investor to abide by to grow his portfolio over time in a systematic and professional manner.

Are you starting to get the big picture yet!?

Forex trading, or any other type of trading, contains an amazing composition not many other types of businesses provide.

You see, in a home based Forex trading business you automatically take advantage of 3 of the best quadrants, even though you still haven't realized!

Now let me share with you how exactly this applies to your Forex trading career:

The Business Quadrant:

The "owner" of the Forex Trading Business develops a system so that his "employee" can do his "job".

This system contains the hours worked per day, the days he works per week and the responsibilities of the job, that is, to control and manage risk accordingly.

The Investor Quadrant:

This person develops a money making system that allows him to make money FROM money.

He is also the owner of the Forex Trading Business. This business is his INVESTMENT.

The Employee Quadrant:

This is the person that holds the "risk management" job for the Forex Trading firm.

He gets paid a monthly salary for doing his job correctly.

But the cool thing here, is that YOU are all three quadrants, built into one.

You are the business owner who creates cash flow which allows you to invest and make more money.

You are the investor who invests money and makes even more money.

You are the employee who trades for the company and gets paid a salary.

The cool part is that because you are the business owner, the investor and the employee all in one, you take full advantage of leverage.

What does this mean to you?

1) You work a set amount of hours per day, just like an employee does, with the difference that your income grows exponentially over time with no additional work involved.

2) You own a business which grows consistently and generates cash flow which in turn allows you to invest.

3) You are an investor, with a business that generates consistent cash flow, which can now re-invest and make even more money from your money.

Eventually one of your goals should be to set yourself up as a correct business entity not only to protect yourself but also to take advantage of the huge reductions in taxes that the government gives.

So get cracking! And remember, you are an investor with a positive cash flow business and with an extremely hard working performance driven employee.

Article Source: http://www.articlesbase.com/wealth-building-articles/robert-kiyosaki-applying-the-cash-flow-quadrant-to-forex-trading-3582518.html

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