LESSON #6: Self Employed or Business Owner?

In the next lesson, I’m going to get more specific about exactly what kind of business we’re going to build, but first we need to get past a fork in the road.

You’ve decided that you really do want to make money on the internet, and now there are two paths set before us…

(Watch this video…)

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Main points:

  • Self employment vs. Business ownership. For many years I didn’t understand the difference. It will be beneficial for you to understand it before embarking on this business venture.

  • Cashflow Quadrant by Robert Kiyosaki: Employee, Self Employed, Business Owner, Investor

  • Each of these four quadrants make money in different ways.

  • Employees… You get paid for your time. You’re trading hours for dollars. You’re working for someone else, and in return they give you a paycheck.

  • Self employed people work for themselves. Like employees, they often trade their hours for dollars. Or perhaps they work for a fee or a commission. There are many examples of self employment, such as construction contractors, consultants, realtors, and even doctors in many cases. They’re not working for someone else, but their income is primarily dependant on themselves doing the work.

  • Business owners use leverage to make money. Most commonly, they hire people and leverage other people’s time. That way, the business owner doesn’t have to do the work and they can scale their business larger. The benefits of being a Business Owner rather than self employed are generally more freedom and ultimately more wealth.

  • Investor’s let their money do the work. They put their money to work making more money.

  • MYTH: You’re not making enough money. FACT: You need to be a better investor.

  • the Investor quadrant is for everyone.

  • If your goal is to never work, then ideally you need to end up in the Business Owner quadrant, not the self employed quadrant.

  • Virtually any self employment situation can be turned into a business owner situation if you know how.

  • The business model I’m going to teach you is really a combination of the self employment and business owner quadrants. And it’s going to be up to you if you want to fully leave the self employment quadrant and hire people to do the work that I’m going to be teaching you how to do.

    Action steps:

    1) If you haven’t read Cashflow Quadrant, read it. You can most likely pick it up at your local library for free, otherwise you can pick up a copy of it here on Amazon.

    2) Determine which quadrant(s) you are currently in, and which one(s) you WANT to be in.

    There’s no right or wrong answer, because it’s really a matter of personal preference regarding how you want to spend your time and how you want to make money.

    As always, you are welcome to post your questions and comments below.

    Have a great day!

  • 294 comments on “LESSON #6: Self Employed or Business Owner?

    1. Abhaskar

      Hi Eric’s

      Here is my request that I want to learn your lesson more fast…. Where I can get all these lesson at a time?

      Reply
      1. Julius M. Scott

        Hi Eric,
        How can I get to the rest of the lessons. I am 85, have BSEE and MSEE degee and would like to accelerate the course.

        Reply
        1. Micah

          Hello Julius,

          Eric will still be completing 100 lessons. The next lesson will be sent to you soon. You can also visit the following link to see the latest lesson updates and revisit earlier lessons:
          http://www.ericstips.com/tips/category/lessons/

          Here is the direct link to lesson 7:
          http://www.ericstips.com/tips/lesson7/

          You may also simply change the number at the end of the link, to go to a different lesson number (example: /lesson1, /lesson2, /lesson3, etc…).

          If your email happens to block some of the lessons, we recommend that you view this tip on whitelisting an email address:
          http://www.ericstips.com/whitelist/

          Reply
    2. Micah

      Hello Abhaskar,

      Please see our reply below.

      Reply
    3. John Templin

      Apparently this system didn’t work… The domain has expired.

      Reply
    4. Kay

      I find it interesting that you are quoting Robert Kiyosaki and yet advised against the Direct Marketing business model. Kiyosaki is very strong in direct marketing.

      Reply
    5. Larry

      The goal here is to create a residual income. Income from a “set it and forget it” business. First one needs to make money before he can spend money. On the one had you say you make money while on vacation and while sleeping but then you explain how it really does take w-o-r-k! Which is fine I am not afraid of work, I just don’t like to work and not get paid. I would rather work and get paid over and over.

      Reply
    6. Charles

      Hello Guys,
      I just started getting these lessons and have just finished viewing lesson #6 – so I don’t know if this info is well known or will help anyone out there. This concerns the investing quadrant mentioned in the lesson. There are two books out there by Charles J. Givens that really cover investing strategies well AND how to protect your money. They are:
      More Wealth Without Risk and
      Financial Self-Defense
      If you are trying to get your financial house in order, the information in these books may help you along.

      Reply
    7. Gary Jensen

      FIRST I WOULD LIKE TO SAY THAT I HAVE ENJOYED YOUR TRAINING VIDEO SO FAR. YOU HAVE PROVED TO ME THAT YOU REALLY KNOW WHAT YOU ARE TEACHING.

      I HAVE WRITTEN SEVERAL TIME IN THIS COMMENT SECTION ONLY TO NEVER FIND MY COMMENT THE NEXT DAY OR GET A REPLY.

      SEVERAL TIMES I HAVE ASKED THE SAME QUESTION. I HAVE A PAYPAL ACCOUNT BUT IT HAS BEEN LIMITED, THAT IS TO SAY I CAN NOT SEND OR RECEIVE FUNDS. WITHOUT A WORKING PAYPAL ACCOUNT, AM I WASTING MY TIME TAKING YOUR TRAINING. I HAVE SENT IN SUPPORT TICKETS BUT I AM NOT SURE THAT I AM GETTING THE ANSWER I AM LOOKING FOR. AM I WASTING MY TIME WITH THIS TRAINING? SHOULD I REQUEST A REFUND? I READ LESSON 53 AND THAT WAS NOT VERY ENCOURAGING.

      GOD BLESS YOU.

      Reply
      1. Gina

        You should check with Paypal. But I think you should have a verified paypal account. Meaning you should have credit card or a banking account as your funding source on your paypal. Go to your Paypal acount and click profile and you will be routed accordingly.

        Reply
    8. Gary Jensen

      HAVE YOU EVER HEARD OF FIVER THROUG GIG PROSPECTOR? IF SO, IS IT ANY GOOD?

      Reply
    9. Micah

      Hello Kay,

      The man is obviously very wise. You don’t have to agree with everything he says, to be able to glean from him on certain points.

      Reply
    10. Micah

      Hello Gary,

      Due to rampant spam, all comments have to be approved manually. If you visit your other comments, you will now see our replies.

      If you plan on selling items online directly, you will need either a PayPal account, or some other online payment processor.

      However, if you are sticking to affiliate marketing, or another avenue of online revenue, it might not be necessary for you.

      Reply
    11. Micah

      Hello Gary,

      Eric recently promoted GigScraper, which helps in finding the good Fiverr leads.

      If Gig Prospector is anything like GigScraper, it should be beneficial for you.

      Reply
    12. jay beacham

      And investing can leave one penny less and head over heels in debt.

      Reply
    13. Jeremy

      Great tips. Thank you for posting this.

      Reply
    14. Don Karp

      The site above is not available, nor does clicking on the name bring me anywhere

      Reply
    15. Sue

      Eric,

      The first thing that comes to mind is tax structures are different on all of these. Additionally the deductions could be as well depending upon how you have your business set up or participate in business if you are an employee.

      This particular lesson is self explanatory to me.
      However thanks for the review.

      Reply
    16. alex

      Read it 6years ago and keep learning self development books. Eric, the more I read and search into your website the best appreciation I have for your work. Thanks for helping us see clearly without making money what ‘s wouldn’t bad viewed the quality of your work.

      Reply
    17. C Fountain

      Eric’s delivery is a joy. Frankness and truth pours out. But I find I@m increasingly comfortable. DANGEROUS. This is not a comfort zone. It is the beginning of our families future,
      CONCENTRATE! Hard work is around the corner….the first real decision. Good luck mates. Watch your tail!

      Reply
    18. Roger

      I am being patient, I know it will all come together when it is ready. I cannot force it to happen. There should be no force associated with the manifestation of this Image I am trying to send out. “FORCE NEGATES”

      Reply
    19. Johann

      Eric,
      I am forced by circumstances beyond my control to be ‘unemployed’ at this stage!
      At my age I need to have an income and am trying my best at being self-employed.
      The chances of becoming successfull is much greater online than ‘off-line’, as more traffic will be sent to my forthcoming website.

      There are only so many hours in a day, but what you put into those available hours, is what count!

      I worked hard my whole life and achieved no financial freedom, and being retrenched at the age of 63, did not help either! Whenever an opportunity to make money arise, I give 100% to satisfy my client and I feel good about it!

      I love reading and will try my best to get a copy of the books you mentioned!

      From what I learned from you, and as I see it, I am in the self-employed quadrant, aspiring to be in the business owner quadrant aa well.

      Thank you for the inspiration! You make my day!

      Johann

      Have a day full of WONDERS!!!

      Reply
      1. Mark Munoz

        First off, thank you from my heart. I am as Johann is only 61 and on disability. As a teacher, 66% of last year of base salary taught doesn’t go far. March ’06 last work month. Given away everything of so called discretionary income to sites promise this and that. “If it sounds & looks too good!…” Learned the hard way and paid for it. “Don’t buy” “Put your wallet away” My life is literally in your hands with your team. I believe in you guys. On to lesson 7.
        God bless
        Mark M

        Reply
    20. RWoodruff

      Eric/Personal Assistant:

      I only learned of you and your internet businesses earlier this month. It was at that time I signed up for ERIC’s TIPS.

      I would have preferred to have submitted my questions directly to you but fully realize this is not reality with the large numbers of people you are maintaining communication with.

      I have owned a very small business in several technical areas for a number of years. My current company was established as an R&D (Research & Development) company. With being unable to obtain outside funding (grant or Venture), I and my partner have internally funded our project. We are no longer able to do this. I am considering several alternatives as sources of income, including an internet business.

      I have a question which has nothing to do with Lesson #6, but I did not know where else to submit it. You are promoting two internet business programs, both which seem to be sound. The first is Chris carpenter’s Info Cash and the second is Brad Callen’s AK Elite. Are you in a position to, and will you, make a recommendation as to which, assuming equal input of time, work and money could provide a reasonable monthly income.

      If you do not feel comfortable with an answer to this question, I understand.

      Sincerely,

      Reply
    21. Eric Post author

      Chris Carpenter’s Info Cash program, and Brad Callen’s AK Elite are two totally different things, so it’s not really comparing apples to apples…

      The Info Cash program is based on pay-per-click advertising, and makes it possible to earn money as an affiliate marketer without having your own product. In some ways, this is good for newbies, because you can get started without developing your own product or website. It works best for those who are able to write catchy and effective ads, and who are good at testing and tracking (it’s basically a numbers game. Paid advertising is all about ROI).

      Brad Callen’s system is for building an Amazon Kindle publishing business, wherein you either write your own niche ebooks, or outsource them. His software then helps you get them ranked for your keywords on Amazon. In some ways, I’d say this business is a little more difficult for newbies, but I also really like the fact that you’re building a long term business, with product (the kindle ebooks) that can sell for many years and bring in passive income.

      I think both of them have the potential to generate income, so I think the better question to ask yourself is which of the two business models would you be more inclined to pursue?

      Reply
    22. Emmanuel

      Hi Eric,
      I’m also a neebie on internet and this your free training advice sound great.

      I’d like to start early then what is this “x-site pro V1 and Joel Comm’s re-sale templates DVD’s”?
      Can I have links for my information?

      Reply
    23. Emmanuel

      Thanks Micah, for this promissing information.
      Let’s go ahead in this Eric’s courses!

      Reply
    24. Luke

      Hi Eric,

      Thanks so far for the lessons. I am still on track.

      Reply
    25. Bill

      I apprciate the name of Robert Kiyosaki’s book’I have his other book that I have not read.Its hard for me to keep my head in any book that isn’t a fantasy.But lately I have read a lot of e-Books that I have on time management,I.M.,blogging and others.But if my library has it I will give it a try. From Texas

      Reply
    26. Dan Merryday

      Hi Eric,

      I am still on the self employed quadrant, but I definitely want to move to the business owner quadrant in affiliate marketing. You are right about having to know how to build the business first, so it’s better to learn and grow as a self employed before starting to research ways to reduce my involvement in my business.

      I assume you will have a lesson on outsourcing eventually? I look forward to reading your recommended resources for the best outsource for each type of task (market research, keyword research, website setup and design, content creation, and search engine marketing).

      Cheers,

      Reply
    27. Iordache Cosmin-Alin

      Hi Eric,

      My name is Alin and I am from Romania.I watched the 5 lessons and I want to make money with your help.But,I have 2 question:
      1.What can you tell me about PTC programs?Can I make money from them how to take a decent live?
      2.What can you tell me about trading binary?Which is the most reliable site for trading?

      I want to help me and teach me how to make money, and I do not mean to millions, I want 200/300 $ per month, for the salary that I earn in the country is very small ($ 180 / month work schedule – 12 hours).

      I hope you understand what I wrote because my official language is Romanian, not english.In hope I have not bored you, look forward to your next movie and your response to my email.

      Have a good day and very good health!

      Alin – Romania

      P.S.:I will wait your answer in my e-mail please:cosminaliniordache@yahoo.com

      Have a nice day!!!

      Reply
    28. Angelo

      Thank you for the tips I was trying to start a internet business but they are so many, I was praying and God lead me to you and Im a newbie.

      Reply
    29. Sam

      Hi Eric

      Enjoying the videos and training so far…very good explanation of business and marketing.

      Thanks

      Sam.

      Reply
    30. Steven

      Read this book last week, freakin’ cool. I am beyond broke without any hope for bank loan.
      I am just started working again after trying to go to school, but unemployment cut-off mid-school.
      10% go’s away for future investing.

      Reply
    31. Grenell Stocks

      The quadrant theory is pretty interesting. I’ve been meaning to read that book, I guess now is the time.
      Thanks again.

      Reply
    32. carl stifter

      It is great that this program will lead us to the development of our own business, We must invest the time to develop a business that we can sell or transfer to our family in the future.

      This is the first program that did not imply that we would be rich by ‘next Thursday’

      Thank you for your time!

      carl stifter

      Reply
    33. Jeremy

      Hello Eric,
      I’m a recent subscriber and want to thank you for the information you’ve put together. I trust you and therefore I’m going to keep watching, listening, taking notes and the required action steps. I have listened to the Cash Flow Quadrant along with just about every other audio book Robert T. Kiyosaki has out there, including The Midas Touch that he co-authored with Donald Trump. The Cash Flow Quadrant simply make sense and without Robert bringing its principles to light, I like many others wouldn’t have put it all together. And now seeing that you are putting his teachings to practice provides me with the social proof that what he teaches is the truth. I’m onboard and I’m hungry for more. I want to “fire” my boss and provide the life that my wife and children have lacked for the past 20 years. Let’s do this thing!

      JP

      Reply
    34. Leslie Denning

      Hmmm … I have a copy of Cash Flow Quadrant that I haven’t gotten around to reading yet. Time to dust it off and read it.

      Reply

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