Are you an employee or a self-employed business owner simply selling your time for money? Most working people fall into one of these two categories…..and as a result, they’re effectively earning an hourly rate no matter how good the title or salary sounds.
But a small percentage of the population earn income even while they’re at the beach, on holiday, or asleep. These are the enterprise owners and investors……the people who have true wealth. Not just money, but freedom: the ability to focus on what I call the Five Fs of Wealth: finance, friends, family, fitness, and fulfillment (fun).
The Business Trap I Fell Into
When I was younger, I thought that running my own business would give me freedom. And in a way, it did…..I no longer had a boss. But I quickly learned that clients became the new boss, and I was responsible for everything. I had to constantly hustle to ensure enough revenue came in to pay the bills.
So I thought: “Once the business is big enough and I hire staff, I’ll be free.” Fool’s thinking. Suddenly, managing people became my full-time job. And if you’ve ever managed a team, you’ll know this principle I created rings true: “People are like parachutes—they’re made to let you down.”
I wasn’t free…….I was locked into an 80-hour week, completely trapped in a machine I had built and couldn’t walk away from without letting down clients, staff, and partners.
The Lightbulb Moment: The Cashflow Quadrant
It wasn’t until I read Rich Dad Poor Dad by Robert Kiyosaki that I realised I had it all wrong. In the book, he introduces a simple but powerful concept: the Cashflow Quadrant. It explains how different people earn income…….and more importantly, how to shift from working for money to having money work for you.
Whether you’re an employee, freelancer, business owner, or investor, this model helps you understand where you are now…….and what steps to take to achieve financial freedom.
The Cashflow Quadrant Explained
| Quadrant | Label | Description |
| E | Employee | You work for someone else. You earn a paycheck, usually tied to time. |
| S | Self-Employed | You work for yourself. You are the business. Time = income. |
| B | Business Owner | You own a system or enterprise that generates income without your constant involvement. |
| I | Investor | Your money works for you through assets like real estate, shares, or businesses. |
The Problem with the E & S Side
The left side of the quadrant—E and S—is where most people live. This side is time-intensive, heavily taxed, and often stressful. You only get paid when you show up.
The right side—B and I—is where the wealthy live. Here, your time is decoupled from income. Systems, staff, or capital work for you.
As I like to say and a principal i live by: “It’s called capitalism because wealth comes from putting capital to work, not labour.”
A Few Exceptions (a.k.a. The Outliers)
Sure, there are a few roles on the E/S side where you can earn truckloads of money:
- Investment bankers – tens of millions per year
- CEOs of blue-chip companies – tens of millions per year
- Elite athletes (F1, Soccer, Golf, Tennis, Football) – tens of millions per year
- Top-tier lawyers/accountants/consultants (partner level) – millions per year
- Doctors/Specialist – millions per year
But make no mistake: to reach that level, most people sell their soul and their time. It usually means 80–100 hour weeks for decades. Sounds glamorous, but for most people, it’s a fast track to burnout, not freedom.
How to Shift from E/S to B/I
Everyone starts on the left side of the quadrant. Whether it’s a teenage job at a supermarket or your first post-uni gig (mine was in accounting), you’re initially trading time for money.
What separates those who stay stuck from those who build freedom is the decision to move right.
Step 1: Shift Your Mindset
- Replace the desire for security with a desire for freedom.
- Start seeing income as the result of ownership and leverage, not effort alone.
Step 2: Build Financial Literacy
- Learn how money works: cash flow, taxes, debt, investing, and systems.
- Read books, listen to podcasts, and educate yourself daily.
Step 3: Start a Side Hustle
- Keep your day job, but build something scalable on the side.
- Test ideas. Learn what works. Build muscle for risk.
Step 4: Systemise and Delegate
- Move from self-employed to business owner by building systems.
- Hire capable people. Focus on growth, not grunt work.
Step 5: Invest Your Profits
- Don’t inflate your lifestyle. Buy assets that generate passive cash flow.
- Think property, shares, index funds, or private equity.
Step 6: Use Structures to Reduce Tax
- The rich don’t just make more—they keep more.
- Learn about trusts, companies, and depreciation. Get a great accountant.
My Personal Journey Across the Quadrants
Here’s how my path unfolded:
- E: Accountant
First full-time role after uni, trading time for a wage. - S: Consultant > Co-owner
Consulting for Agentpoint, then buying into the business. Still trading time for money—and ironically, at a lower hourly rate than when I was an employee! - B: Business Owner
After six years, I hired strong managers and reduced my hours to three days a week. I finally had leverage. - I: Investor
I reinvested profits into assets—property, equities, crypto and other ventures—which began generating passive income.
It took over a decade post-uni to realise that financial freedom isn’t about earning more…….it’s about earning differently via passive income.
True Wealth = Passive Income > Expenses
Wealth is Having More Passive Income Than Expenses and is about creating sources of passive income that exceed your expenses, allowing you financial freedom.
Financial freedom then allows you to spend your time how you please.
That’s when life truly opens up…….and you can spend your time on what matters most…true wealth. True Wealth is about freedom, balance, and fulfillment in every aspect of life. I believe that true prosperity is achieved when you have full control over your time and live in harmony across the Five Fs of Wealth.
TheBucket 