The ESBI Model of Earning Money

Essentially, there are four different ways to earn money, as shown in the figure below. This ‘ESBI Model of Earning Money’ is based on the book “Cashflow Quadrant” (published in 1988) by Robert Toru Kiyosaki (1947).

The way to earn money differs per quadrant.

1. “I work for others”. In the first quadrant, you are an employee who has a job. Therefore, you receive a salary from your employer. You trade your time, energy, and competencies for money.
2. “I work for assets”. In the second quadrant, you are self-employed, meaning that your time, energy, and competencies are your main assets. Your money comes from your customers who pay you for your application of these assets. In this second quadrant, you depend solely on yourself. This means that you are independent, but also fully responsible for all financial matters.
3. “Others work for me”. In the third quadrant, you own all or part of a business, in which other people are involved. Either you are an employer or you are part of an enterprise in which people participate, as employees, volunteers, or co-workers. Your money comes from this business’ profit.
4. “Assets work for me”. In the fourth quadrant, you own financial assets which generate money for you, such as dividend payments or return on investment in one way or the other. Your money grows because it yields more money, depending on how you have used it. But you can also lose money.

In the first quadrant (e), the earnings are relatively low, and so are the risks, like the risk of losing your job or not getting paid (in case your employer goes bankrupt). On the other hand, the earnings are relatively high in the fourth quadrant (i), but this is also true for the risks, as you could not only lose all your money, but even ending up with a debt is a possibility. The earnings in each quadrant are therefore more or less proportionate to the risks. In other words, financial management includes risk management.

Currently, about 95% of the people are in the left-hand-side quadrants (e and s), while 95% of the money is earned by the people in the right-hand-side quadrants (b and i). Therefore, to increase your earnings, becoming a business owner (b) or an investor (i) is the smart thing to do. If this is what you want, then contact me. With relatively low risks, I can help you earn considerably more as soon as possible. And no, it is most certainly not too good to be true; it is too good to let it slip by.

If the above statements trigger negative thoughts in your mind, I can understand this very well, as this happened to me as well when these opportunities were presented to me. Nevertheless, I dared to commence with it. Now looking back, I am very grateful that I grabbed this opportunity with both my hands when it came by. What do you do?

This article on the ESBI model, written on Saturday 7 September 2019, by Johan Oldenkamp, is also available in Dutch.

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