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Income & Expenses


If you were to go around asking people what would make them
happier, you'd get answers like "a new car," "a bigger house,"
"a raise in pay," or "winning the lottery." Probably not one
in a hundred would say "a chance to help people," and yet
that is what brings about the most happiness of all.

George Burns



This section will provide a short overview of various income sources and expenses.

This may seem to elementary for most people but read further, the information may be helpful.

Robert Kiyosaki (author of Rich Dad Poor Dad) has broken down the income of people into 4 basic areas.  Most people are aware of these but this "quadrant" approach may help visualize the income process easier.



1 : a coming in : ENTRANCE, INFLUX <fluctuations in the nutrient income of a body of water>
2 : a gain or recurrent benefit usually measured in money that derives from capital or labor; also : the amount of such gain received in a period of time <has an income of $20,000 a year>

Some Basic Information:

bullet 80% of all domestic arguments start as a result of income problems (no enough income). 
bullet A great majority of divorces start over income problems. 
bullet Most personal bankruptcies could be avoided with just another $400 per month in income.

80% of people "hate" their job


On average people change jobs about 9 times between age 19 and 30 (why?)


Most people change "careers" about 4 times in their work life (why?)


Over 1.4 million jobs were "lost" during 2001


This may sound strange but there are only two problems with money: 

bulletHaving to little
bulletHaving to much

Some people say money makes people "bad."  My experience (and others) is that money will tend to make you more of what you already are.  For example, if you are greedy and inconsiderate then more money will tend to amplify those traits.  However, if you are kind and generous then more money will tend to amplify those values.

Many people recognize that money is just a tool.  You can do good with it or you can do bad.  The choice is made by the person not the money.  However, if you don't have money you don't have any real choices.


There is a cliché in the real estate business:  Location, Location, Location!

A similar cliché is relevant in business/investing:  Leverage, Leverage, Leverage!
Without leverage (whether additional products, employees, stock, money etc) a business will stop growing very rapidly.

LEVERAGE is what the Businesses Presented here provide for you and your family.

Below are a few examples of how "Leverage" may be used:

bulletIndividuals use leverage:  When you borrow money to by a house (or business, real estate etc.) you are leveraging someone else's money (i.e. the borrowed portion).  Other examples of leverage are:
bulletWrite one book but you may sell it a 1,000 + times
bulletMake a movie but it may be viewed many times in many theatres
bulletThis web site is an example of leverage
bulletBusinesses use leverage:  When you (or a business) hires employees you are leveraging the employees' time and effort (DuPont® could not sell $40 Billion per year with just one person, the company is leveraging the work of over 40,000 employees).  This is true whether a large or small business.
bulletFranchises use leverage:  McDonalds® could not sell $30 Billion of food each year from one store.  Instead they open additional franchises (stores) to increase sales.  (currently there are about 27,000 franchises worldwide with each selling about $1 Million per year).   The corporation receives a small % of sales from each franchisee.

Additionally successful businesses and investors have Multiple Sources of Income (MSI).  Why then do most Employees and Self-employed people only have their "JOB" income?

Below are the 4 basic income methods people use to generate income:

This is where you work for someone else and receive a paycheck
No real leverage

This is where you own a large business (or multiple businesses) that you may hire someone else to manage and your presence at the business is not necessary for success, e.g. franchisor.
Very good leverage
This where you are self employed or you effectively "OWN" your job, e.g. doctor, accountant, lawyer, franchisee or small business owner. Without your presence the business would not survive.
Very limited leverage (usually a few employees)
This is where you invest in other companies (business systems) and derive income from mainly passive sources, e.g. business growth, stocks
Very good leverage
This side comprises about 96% of people This side comprises about 4% of people
This side controls about 4% of the wealth This side controls about 96% of the wealth
This side has a limited income potential This side has an unlimited income potential
This side generally works for the other side This side generally employs, or invests in the both sides

Which side do you want to be on? 

One side is easier but more costly in the long run (Left) and one side is harder but more rewarding in the long run (Right).  The only difference between the sides is "knowledge", consistent effort, a simple effective plan, and a desire to "change" your current situation.

Click here if you want to change your Financial situation.

There are 3 basic Income Producing Strategies used today.  They are:

bulletTrading time for money.  About 96% of people are in this group (Left Side).
bulletThis group includes Doctors, Lawyers, Accountants, Managers, Clerical people etc. anyone with a "JOB."   Why?  Because this group works a certain number of hours and they get paid for those hours.  While the pay may be high or low - when they run out of hours their income stops, i.e. very little leverage.  This group also tends to have very little free time and flexibility.


bulletInvest money to earn money. About 3% of people are in this group (Right Side).
bulletTo make a living in this group generally requires a significant amount of specialized training and money to get started and continue.  The risks may be high. However, this group is usually Financially Secure!


bulletLeverage time by multiplying their efforts to create Multiple Sources of Income.  About 1% of people are in this group (Right Side).
bulletThis group includes businesses with more than one person, franchises, law firms, large businesses, etc.  Why?  Because more people in a business usually means more leverage for the owners.  They effectively "multiply" their efforts through the efforts of others.  Franchises are excellent examples.  For instance McDonalds® or similar organizations.  Why?  The owners multiply their efforts by establishing "outlets" for their products which in-turn provides "Multiple Sources of Income" to the company through sales but mainly "royalty" payments, i.e. passive income (usually as a percentage of sales).  This group is usually Wealthy!

bulletSeveral of the businesses presented here follow this business structure.  You will be able to take advantage of significant business/investment leverage





1 archaic : the act or an instance of expending : EXPENDITURE
2 a : something expended to secure a benefit or bring about a result b : financial burden or outlay : COST <built the monument at their own expense> c : an item of business outlay chargeable against revenue for a specific period
3 : a cause or occasion of expenditure <an estate is a great expense>


Expenses can be grouped into 2 basic areas:  "Good" expenses and "Bad" expenses.

Good expenses are those that help you obtain your short and long term financial goals.

Some expenses that may fall into the "Good" area are:

bulletProfessional advice
bulletBusiness investment
bulletCharitable contributions


Bad expenses are those that just consume money and do not contribute to your overall financial success.

Some expenses that may fall into the "Bad" area are: (by the way everyone has expenses in this area and may have a short term emotional benefit)

bulletExpensive cars


This is the first part of the Income Statement mentioned earlier, i.e. Income and Expenses (you may want to list a few of your income sources and expenses).














 The next part of the Income Statement will be Assets and Liabilities.




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