If you can’t find a way to make money in your sleep you will work until the day you die

In the last weekly sauce, we discussed debt. Towards the end of the newsletter, we spoke about the ways in which you can pay off that debt to break free from the debilitating lifestyle that comes with debt. The only way to pay off debt is to have income (unless you hoard cash like (El Chapo)

In this Sauce, we are going to speak about income. The average millionaire has 7 different streams of income. It is incredibly important to diversify your income, as unforeseen economic downturns, health, and personal issues are unfortunately inevitable.

If you want to create new income streams, you first must understand the types of income streams. In this Sauce, we are going to talk specifically on the Cashflow Quadrant. If you haven’t read this book by Robert Kiyosaki, I highly recommend it.

Understanding the Quadrant

The quadrant is four different categories distinguished by the type of work put in to acquire that income stream. They can be divided or separated into two sides. The left side is the active income side and includes the Employed or E category (top left) and the Self-employed category or S category (bottom left). The right side is the passive investment side. This includes the Business owner or B category (Top right) and the Investor or me category (bottom right).

The goal is to work through the quadrant and end up at the bottom right, in the Investor category. While this is not easy, it can be done if you are willing to put in the work.

Let’s jump into the 4 quadrants!


The Employed category is the largest category when expressed in population size. Most people go through their entire lives building someone else’s dream. If you enjoy the comfort of working for someone, there is nothing wrong with that. But, if you want a lifestyle full of freedom, options, and choices, this category should only be used long enough to stack enough cash in order to cover your expenses for some time and move on to the next quadrant.

The great thing about living in this era is technology. We now have the option to build a business from our smartphones or laptops during or after work, so you can, and likely will be in the E and S category simultaneously at the beginning of your journey. I would highly recommend creating a new income stream while in your job and only ditching your job when:

1) Your income from the new stream exceeds your current income from the job
2) There is a large opportunity cost for staying in your current job (job limits growth in your new venture)

Another tip when creating a new income stream is to make it coincide with your current income stream. If one can supplement the other, you have a much greater chance at success.


Does the image from above look like a good time?

It’s not. I have tried it.

The Self-employed category can be a deceiving one. Most people believe this is what you should shoot for as an entrepreneur. The idea of being a “solo-preneur” is viewed as a cool fad right now.

What most people fail to understand is that working for yourself is more stressful and demanding than being an employee. Living a better lifestyle comes from working less and making more. In order to do this, you need to lose the “I can do it all” mentality and move to the next category as soon as possible.

You are going to have to let go of your ego. There is a 0% chance you will make it as a business without the help of someone else. Whether that someone is a mentor, a cleric, an accountant, ect. you need help. You need to focus on your strengths and let other people fill in the gaps.

In this part of the quadrant, you are still in the active income lifestyle. You are still trading your time (and sometimes space) for money. For that reason, we want to advance to the next category as quickly as possible.

Business Owner

The Business owner category is where the first large leap takes place. This is the leap from active income into semi-passive income. In this category, you employ workers to do the grunt work for your business. You no longer trade your time and space for money.

This category is characterized in the sense that you could be away from all work for 12 months and it would have little to no effect on your income from the business. Being a business owner is the first time you will experience liberation from “the grind”. This takes time and patience is truly a virtue in this category. If you can achieve this, life becomes much easier.

While this category is a HUGE accomplishment, you still have to work for your money. We don’t want to do that our whole lives. We want money to work for us.


The final and most empowering income stream is being an investor. As a passive investor, you can seize to exist and your investments will continue to produce cash flow. When the cash flow from this category exceeds your expenses, you have reached a dangerous level of freedom. When this happens you can do whatever it is you desire in life without worrying about income the rest of your life.

The full transition over to the passive income lifestyle will not just happen overnight. It will take years of building saving and investing wisely.

The great thing about this category is you can be an investor as soon as you want. The best time was yesterday, the next best time is today. I highly recommend investing at least 10% of your income.
If you want your life to change, you have to change.

How does change occur?

With action.

Take action on this newsletter.

Go get this book.

find a way to navigate through this quadrant while creating new income streams.

Liberate yourself from the active income lifestyle and create some semi-passive and passive income streams.

You will thank yourself later.

Remember you, and you only, influence, direct and control your future.

Start acting like it and get those income streams up!

See you next Friday!

Published On: April 23, 2020 / Categories: Articles /