LESSON #6: Self Employed or Business Owner?

By | June 17, 2008

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…)

Join my coaching club

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!

  • 309 thoughts 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:

          LESSON #7: What kind of online business will we build?

          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:

          How To Add a Sender to Your Whitelist (Safelist)

          Reply
    2. John Templin

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

      Reply
    3. 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
    4. 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
    5. 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
    6. 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
    7. Gary Jensen

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

      Reply
    8. 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
    9. 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
    10. 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
    11. 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
    12. 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
    13. 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
    14. 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
    15. 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
    16. 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
    17. 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
    18. 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
    19. Emmanuel

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

      Reply
    20. 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
    21. 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
    22. 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
    23. 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
    24. Sam

      Hi Eric

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

      Thanks

      Sam.

      Reply
    25. 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
    26. 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
    27. 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
    28. 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
    29. 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
    30. Susan

      I would like to get the point “busines owner”, I wonder what a ballpark time investment is like to be? 20 hrs per week? or more? There has to be some, or business will die. Thoughts?

      Reply
      1. Micah

        Hello Susan,

        Thank you for your question. A realistic minimum investment for an online business would be about a couple hundred dollars, for web hosting, a domain name, an autoresponder service, and a product to start selling.

        However, there are many different ways to earn money online. Here is Eric’s lesson highlighting 18 different ways to earn online revenue:

        LESSON #4: 18 Ways to Make Money Online

        We can’t guarantee that your idea or business will be successful, but the people who don’t quit, but try again and again with new ideas, often find great success!

        We have seen people earn money on their first day in some cases though. If you work hard, it’s possible for you to build a successful business too!

        If you don’t have any money to invest right now (or even if you do), we recommend that you hang in there with Eric’s free video lessons at http://www.ericstips.com/. Eric’s lessons have helped many people to go from beginners, to successful online business owners!

        The lessons are presented in a sequence that starts at the very beginning, where the very first things you need to learn about online marketing are shown in the first few lessons!

        Later, if you’re interested to go even more in-depth with marketing, you might also want to take part in Eric’s coaching club:
        http://www.realguysrealmoney.com

        Eric, Paul, and Jeff are expert marketers. They will be a great resource for you!

        Reply
    31. Severo Dia, Jr.

      To Eric or a support guy,
      Have just seen Lesson #6. I have learned a lot already, but I’m broke right now so I can’t afford to have a web site made, pay for domain name hosting or auto responder service yet. I plan to do self employed work first so that I will have enough money in my pay pal account and then enroll in your program. However, please continue sending the lessons and other notices. Please keep in touch. Thanks so much, God bless.

      Reply
    32. Luz

      Hi Eric. Where can I go to also learn the investment side of the business. I have researched many businesses but have not been able to find a good place to learn to become an investor.
      Thanks

      Reply
      1. Micah

        Hello Luz,

        Are there specific investment streams that interest you? Eric does have a number of stock market and trading related courses:

        Products

        Reply
    33. Howard Ford

      Hi Micah,

      Can you please email details of Erics investment courses and also the newsletter as I applicd many times and never received it.

      Thanks,
      Howard

      Reply
      1. Micah

        Hello Howard,

        Here is the link to Eric’s current products:

        Products

        Here are Eric’s recommendations:

        Recommended Websites

        If you subscribed to any of Eric’s mailings, you would need to click the confirmation link sent to you whenever you signed up, to receive further mailings.

        It should have arrived right away, but you may need to check your junk/spam email folder.

        Reply
    34. Marc M. Demers

      Hi Eric,

      My first ascertainment is that we have a similar goal and path, except for the Online Business.

      I’m a small stock market investor, I own a few short domain names as investment and hope, in a near future, to manage my own Online Internet Marketing Business.

      I’m excited about the incoming lessons.

      Thanks for this great Cashflow Quadrant theory.

      Marc

      Reply
    35. Glenn

      Hey…I was wondering if you guyd have z transcript of the videos in esch lesson? The reason I ask is for thosr folks in the audience eho are hearing inpaired. Although I wear aids, the audio comes out garbled. It would be nice to hsve s transcript of the video. Just wondrring

      Reply
      1. Eric Post author

        Sorry about that. Not at this time, but I plan to release them soon. Also I think you can use some speech to text software to generate a transcript on the fly.

        Reply
    36. Ellen VanSlyke

      In talking about Phishing, I believe you said to beware of those who ask for your log in information. However, your entry process asked me for my Pay Pal email address and my Pay Pal password. I was terribly concerned but wanted this so badly that I gave it to you and then immediately went into Pay Pal and changed it. Why did you ask for that private information?
      Respectfully,
      Ellen

      Reply
      1. Eric Post author

        There is nothing that ever comes from me that should ask for your Paypal password. If you purchased something from me, then yes you would need to enter your password when you log into Paypal during the payment process. But that doesn’t go to me, you should only enter your paypal password if it’s on PayPal’s domain and it shows as secure in your browser.

        Reply

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