The Worst Financial Trade In Your Life

You might have heard of this - if you have been following me for a while.

"The worst investment is a trade of $5 for $2."

This refers to the ultimate insanity of selling your soul from Monday through Friday for a paycheck of Saturday and Sunday.

Let Me Get This Straight

Before I go on, I need to emphasize this.

I do not despise the notion of an employee (after all, I am in one myself).

This is why I specifically highlighted selling your soul - because this only applies to those who dread their jobs and are trapped simply because they are solely dependent on their job for an income.

Essentially, it is five days of servitude for two days of freedom.

But, that's not a bad thing become for most of us - we need to be an employee first.

Being An Employee As A Necessary Phase For Most

You might have heard about this, called the ESBI quadrant - developed by Robert Kiyosaki, the author of Rich Dad Poor Dad.

There are two very distinctive halves of the quadrant - (1) the "E-S" quadrant and (2) the "B-I" quadrant.

The quadrant that makes more money and wealth?

Well, I think it is clear that it is the "B-I" quadrant - simply because they are not exchanging a finite resource (i.e. time) for money.

But here's the punchline.

The reality is that most people would start as an employee or self-employed at some point.

This is because, the transition from the E-S to the B-I requires a very specific set of skills, which are not taught as part of our formal education.

Even if you did start your own business, you would be classified as a self-employed, as you wouldn't have the resources to hire others at the starting stages of the business.

For the majority of us - we would start our journey in the E-Quadrant.

We then build up (1) the capital and (2) the skill set to transit into the other parts of the quadrant. 

The Employee Path Through The Quadrants

If you are an employee like me, this is the path I would recommend.

Focus on being a self-employed first.

Becoming a self-employed (or starting your own small business) is one of the best ways to develop the necessary skill sets which are not taught within the realm of formal education. In other words, you will be learning from the school of hard knocks.

Note that trading in the stock market is akin to starting your own small business.

You need to hyper focus on trading your time for higher income skill sets (option trading could be one of them). More important than money, being a self-employed requires a level of tenacity and discipline which it is hard to develop as an employee. Remember that millionaires are not built by events, but rather built by processes and experience they been through.

As you build up more capital, the next logical step is to invest further into yourself or the business you are building.

This means that your very initial capital would start from the savings you get as an employee. However, as you develop your higher income skill sets - you then reinvest your additional income into courses, mentors, masterminds. This is what I call the compounding effect of active income growth.

Passive Income Comes From Being Active

The idea of the B-I quadrant is to dissociate time with the amount of money you are making,

In the Business Quadrant, you have people working for you to generate income.

In the Investment Quadrant, you have money working for you to generate income.

However, to get to these two quadrant - you must be willing to be active in the first place.

Remember that a person does not become a millionaire because they have a million dollars in the bank. They become a millionaire because of the skill sets they have developed over the years.

Conclusion: Why I Am Obsessed With The B-I Quadrant

The notion of exchanging 5 days of servitude of 2 days of rest - from the age of 25 to 65 is just crazy to me.

Wealth is best enjoyed when you have health, vibrancy, energy and having hair would be a bonus as well.

This is especially so, if you have your loved ones or children.

You need to question the normality of these 5-for-2 concept.

Or are you willing to put your best effort to transform these 5-for-2 into 3-for-4 or even 7-for-0.

The journey to the B-I quadrant will not be easy.

Because it requires you to step out of the comfort zone as an employee and start to learn from the school of hard knocks and failures.

But I dare say - it will be worth it.

Not because of the money you will make, but because of the person you would have evolved into.