What Type Of Income Are You Working For?

What I learned from Robert Kiyosaki is that to become financially free, we should first know what type of income are we working for. According to him, there are three types of income;

Ordinary earned income (job, self-employed businesses)
Portfolio income (paper assets, dividends, interests)
Passive income (income-generating assets, auto-pilot businesses)

But it seems like most people only know one kind of income; the<strong> ordinary earned income</strong>. That includes me.

But that was before.

For almost ten years now, my income has always been dependent on my job. Without my job, I would go broke within 60-90 days.

That's how important my job right now is. I feel secure because I have a job that can pay my bills, living expenses, and my splurge activities but the truth is, it isn't.

If I lose my job, I'll lose all in an instant. That's the reality. Currently though, my job seems to pay my bills comfortably.

I first felt this false sense of security when I experienced earning my first ordinary income. I felt that having a job is like having a happy ending story.

My First Experience Of Earning Ordinary Income

There came a time in my life when I had to stop going to college because;

I got debarred from UST because I failed almost all of my subjects and;
We had also financial difficulties during those times.

I got debarred because during those time, I'm a happy-go-lucky person.

I didn't pay attention to my studies because I think I'm smart enough and I'm very confident at that time. All is going well but when I reached my 3rd and 4th year, the subjects became more difficult. I failed almost all of my subjects during my fourth year and I was debarred by the Engineering Department.

It felt like there was no longer any hope of fulfilling my dream to become an Engineer.

I felt the fear of an uncertain future. It really scared me a lot. I got depressed. I felt it was the end.

When I told this to my parents, they were shocked and are furious as to why it happened. I couldn't say anything or even defend myself. My aunt, who was giving me my tuition fees, also got surprised and didn't expect that I would fail big time. I was really ashamed. It took me weeks to grasp the truth that I may no longer be able to go to college.

To move on and gain my confidence, I decided to work as a customer service assistant in a famous clothing shop with the help of my sister. It was a tough job but a very exciting and fun job. It was my first job and my salary during that time is Php 250.00 a day. It was the first time I experienced earning money from a job.

What Does It Feel Like To Have Ordinary Income?

Having an ordinary income gave me the feeling of comfort and security when I was in my darkest point in my life. It also rid me of depression.

Because of the money I'm now earning, I felt like I'm more in control. I no longer have to ask my parents for money. Back then, we only go into simple dates with my girlfriend because I only save little of my allowance. But when I started to work, I got to treat her into much expensive ones. I'm just happy that time because I'm making money. I felt like that it can go on forever like this.

Today, I have been working for ordinary income since I started my first real job as an Engineer way back in 2007. For the past 8 years, I felt the feeling of comfort and security because there's always money coming in every month. But thinking deeper, I realized one thing.

I realized that I want to have ordinary income but I don't want to live my life by just earning ordinary income.

There's a lot of reason why I feel this way;

When you have ordinary income, you don't worry about monthly bills but you don't get to live your life the way you want it either. In our home, I pay bills for water, electricity and Internet. I pay my monthly amortization of my sport bike 3 years ago. I pay for my food, cellphone load, gas and my father's medicinal needs. I pay for almost anything I need and want. If I lose my job, then paying all of this would be a big problem. My financial stress is eliminated as long as I keep getting my salary to pay bills in time. But I noticed that what I do is just pay an endless stream of bills every month. What's left after paying bills determines how I how will I live my life before the next payday comes.
Feeling of security but not totally permanent. My stable job makes me believe that as long as I continue working, I can live my life until I die. If I start a family, I believe that I can provide for them as long as I work. That is true. But as time passes, the feelings change. You grow tired of working but because you need to pay bills, you continue to do it. What motivates you is not the job, but the paycheck that you'll receive at the end of the month. And then there's the fear of change. We fear the feeling of uncertainty. Thoughts such as 'will I succeed if I resign my job and start a business' or 'what if I lose my job today, what will happen to me and my family' prevents us from going out of our comfort zone. I feel secure about my present job but I don't know for how long. I learned that unless you own a small portion of the profits of the company you're working for, you're not financially secure. So I feel that having my job makes me feel secure but not totally permanent.
Having a job boosts your confidence but the salary you get lowers morale. When we have a job, we feel confident because we feel that we are doing our part to make everyone's lives better. By not working, we feel that we have no use in the society. I felt this feeling when I'm out of job for almost 6 months. While waiting for interview invitations, I stayed at home and watched TV and play computer games all day. I felt I wasn't productive. I felt that my mojo was taken away from me. It's really a depressing feeling. When I got a job in a construction firm, it instantly boosted my confidence level. I felt that I'm now doing something important in the society I belong to. But as time passes, more work has to be done, more time is spent working, less quality time is spent on loved ones, stress piles up and now you wonder is it really worth it having this job for a meager salary?
Planning for my future has always been dependent on how much money I make. When I started working, I told to myself that if I got a stable job with a decent salary, I'll going to settle down to have my own family and kids before I reach the age of 30. But because of the way things are happening, I wasn't able to fulfill that promise. When I turned 30, I again told myself that I'll going to settle down at age 35 but seeing my progress today, I think I'll not be able to achieve it. I've analyzed my situation as to why this is happening and I found out that the fulfillment of my dreams has always been dependent on how much money I make.
Fear of failure. I really wanted to start my own business. But I fear failure. That's why I'm still hanging on to job security. I'm always thinking that if I start a business venture and fail, there's nothing to worry because I have a job to compensate for that. A job is still a job. It's always there. As long as you go to work, you get paid. It's a sure income. Whereas a business, it all depends on how good your strategy and hard work is. There are no guarantees. It's just pass or fail. That fear of failure keeps me from pushing through. As much as I wanted to escape the corporate world, fear keeps me coming back for job security.

Converting Your Ordinary Income Into Portfolio And Passive Income

According to Robert Kiyosaki, to become wealthy, we should learn to convert our ordinary income into the 2 other types of income; portfolio and passive income.

Last year, I came to realize from Bo's ebook the potential of portfolio income specifically stocks to become wealthy. I had spent almost 25% of my total salary since then. Because of the ongoing market rally caused by the election results, my investment has now grown at 5%. Based on the economic policies of the presumptive President, I'm predicting that it will grow higher for the next 2-3 months at around 10%.

Thinking deeply, I wonder what would have happened if I didn't invest my ordinary income every month. Here are some of the few things I might would have done.

Upgrade my bike to a much bigger and faster one.
Own a few Apple or top of the line Samsung smartphones/tablets since I'm a kinda techie.
Splurge it on travel vacations.
Use the money to own a piece of a liability or a bad investment.

If I hadn't learned about the proper mindset of the rich, I might have went to the first option since I love sport bikes and I dream of owning a liter bike like the one below.

All that changed when I learned many things about Kiyosaki and Bo's writings. Although I still dream of having a bike like the one above, I might buy one from the income that I'll get in my portfolio income.. or maybe in my passive income.

Speaking of which, another type of income is what we call passive income. I started my journey on building my passive income the same time I started building my portfolio income. I chose to build my passive income in the Internet. As it turns out, building a passive income in the Internet is much harder than building a portfolio income as per my experience.

I do affiliate marketing and I admit, my progress has been very slow since I started. The fact is, I almost only make it at break even if you factor in the costs for memberships and hosting. The reasons I believe as to why the progress is slow are enumerated below;

The proven techniques and strategies that I learned are not being applied very well.
I'm not using effective advertising campaigns.
I'm not spending enough time to actually learn the system.

But is this bad? No, because I'm making it barely at break even point. I believe that there will come a time that the income I'm producing out of this will increase and skyrocket without any necessary effort in my part.

What Are My Passive Income Streams?

Being a member of Truly Rich Club and Pinoy Investor gives me an opportunity to do both things;

To be a smart and well-informed stock market investor.
To make money as an affiliate marketer.

Some people say that it isn't really necessary to be a member of these services. For me, it depends on what you want to accomplish. These two programs provide us information to be successful in the stock market and also, an opportunity to make a steady stream of passive income through their affiliate marketing program. But how?

It's really a fact that not all of us have the ability and time to learn how to read charts and analyze stocks. Most of the people I get to talk to about stock investing tells me that they want to start but they are fearful because they don't know what stocks to buy and they are afraid of the potential mistakes they will get when they decide by themselves.

These people know the basics but when it comes to reading financial reports and analyzing the charts, they really don't know what to do. The limited knowledge and fear is the cause why most people do not take risks in stock investing. These group of individuals are the people who are most likely to benefit from TRC and Pinoy Investor's services.

By introducing TRC and Pinoy Investor to them, you are in fact helping them in a way that also benefits you. I think of the commissions I receive in them as more of like a blessing. You help people get valuable information on how to be wealthy and by that, you get blessed by earning a tiny commission.

As long as the person you refer maintains his/her membership, you earn a steady stream of passive income every month. These people if they want, can also do the same so that they too can earn passive income.

Some existing members of TRC and Pinoy Investor don't pay attention to the affiliate programs these websites offer. For example, in TRC, if you just get at least 5 people in the membership, your commissions will cover for your monthly membership.

Having a free TRC membership is cool. Now imagine if you referred 100 people. Same goes with Pinoy Investor. If you refer people to use their premium services, you earn commissions for it. Earning passive income in a free website is may much cooler.

If you're investing in stocks and are already using these services, I suggest you take advantage of these affiliate programs. There are many people earning substantial income using the programs mentioned and one of my goals is to achieve that level of income sometime in the near future.