| The Four Buckets Principles |
"Why working hard is not getting you anywhere... and how you can
change it!"
I'd like to share with you something I've learned from a friend last
week. It's about taking a good look at our lives and seeing where
it's taking us. It's about seeing life in a new light - a new
AWARENESS and a PARADIGM SHIFT.
He told me about the FOUR BUCKETS PRINCIPLES.
You see, most of us started out living our lives with two buckets.
The first bucket is called the Cash-flow bucket. We work hard
everyday trying to make ends meet; making sure that we earn enough
for our daily and monthly expenses, such as food, clothing, going to
the movies, having a good meal once in a while at a fancy restaurant,
paying the rent - in short, meeting the day-to-day living expenses.
At the end of the month, whatever little we have left becomes our
savings.
The second bucket is our Dream bucket. It is a pretty common dream
that most ordinary people have, such as owning a house of our own, a
reasonably decent car, and perhaps even an occasional travel to see
the world we live in. We may even dream of retiring early.
In order to fulfill our dreams, we apply for loans from banks and
other financial institutions to purchase our dream house and car.
When we do that, we created the third bucket called the Liability
bucket. The moment we do that, we turn our dreams into a nightmare.
We end up working for the banks or the financial institutions that we
borrowed from since a part of our earnings goes into servicing the
loan. A big chunk of our salary goes into servicing just the interest
for the loan. We're not forgetting also that we are partially working
for the government as well - we pay taxes.
You can see from here that the Liability bucket is NOT good for us;
the bigger the loan, the bigger the liability. We could end up
working our whole life for others.
That pretty much sums up most of our lives at this point in time. So,
is there anything we can do about it?
Yes, there is. We can take the easy way out by downsizing our dreams
or we can get ourselves out of this vicious cycle by creating the
fourth bucket.
The fourth bucket is called the Asset bucket. We have got to get a
tool or business that will generate profit for us. Unlike the
Liability bucket that is full of holes and drains away our savings,
the Asset bucket has no holes. It just stores and generates more
savings for us. Naturally, the bigger this Asset bucket is, the
better.
This brings us to the next problem. Most of us are either working as
an employee or if you are more fortunate, self-employed. And we just
do not see how we can create an Asset bucket that is big enough to
stop the drainage from our Liability bucket, even though we know that
we have to throw the Liability bucket away somehow. So, is there a
way out?
Again the answer is YES. In order to show you the way out, you'll
have to understand the ESBI quadrant.
ESBI stands for Employee, Self-employed, Business Owner and Investor.
Most of us are either working for others as an employee or working
for ourselves as a self-employed person. In fact, the majority of
people on this planet fall into the E quadrant, the employee. Those
who are more "fortunate" are self-employed. These two groups make up
almost 95% of the population.
Obviously, they are NOT the millionaires. That's because these two
groups of people work for money. If they don't work, they don't get
paid. It's as simple as that. This includes professionals like
doctors.
The next two groups of people make up only about 5% of the
population. They are the businesspersons and investors. THEY are the
millionaires and billionaires of the world.
Why? The answer is because they don't work for money.
Instead, they let money work for them. The businessperson doesn't
need to be there and the business still goes on to generate profits
for him or her. It's the same with the investors.
In fact, they are the ones who truly have Financial Freedom. They
have the time to do the things they like to do, and the money to do
it. They are not slave to their work. This is called working to
create wealth, where "wealth = money + time".
Some people have the money but not the time to spend it, so they
cannot be said to have freedom of choice. If they choose to travel
instead of work, they lose their earnings. This is especially true
for most professionals.
That means that in order to achieve Financial Freedom, we must shift
ourselves from the E and S quadrants to the B and/or I quadrants. The
first step to achieving this is to change our present mindset from
that of an employee or a self-employed person, to one of a
businessperson or an investor.
This is called a paradigm shift, and is perhaps the MOST important
step to achieving Financial Freedom. Without this change in mindset,
we will forever be working for money, instead of letting money work
for us.
Once we have changed the present mindset, we need to learn as much as
we can about business skills and investment skills. It is here that
you begin to acquire financial intelligence. The best way to do that
is to get involved in a business of your own. And the best type of
business is one that requires small start-up capitals with
potentially big returns. That is why MLM and network marketing is so
popular and so successful.
I'm not asking you to join MLS but you should take a good look at
opportunities that come your way. Don't just dismiss them. Learn as
much as you can from them. Perhaps you might find one that suits your
beliefs and interest. In any case, start acquiring your financial
intelligence NOW.
So, go ahead and make a difference to your life TODAY. In ten years
time, do you still see yourself slaving at your job or would you be
among the 5% in the world enjoying true freedom of choice? Will you
be living your dreams or downsizing it?
The greatest part is..the choice is YOURS!
About the Author:
Tim Ong is a medical doctor and author of the online "Build From
Within" newsletter series. He is also the webmaster of The Self
Improvement Site (http://www.theselfimprovementsite.com) and Caring
For The Terminally Ill (http://www.caring-terminally-ill.com). You
may sign up for his free newsletter at
http://www.theselfimprovementsite.com/signup.html.
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