Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki


The Spare Time Co. or boosting your personal bottom line and getting out of the Rat Race with a business in the basement

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When playing Cashflow, most players in 101 won’t start the small businesses “in the basement” like the software company or widget company thinking it’s a lot of money with no payoff and a chance to lose your money. This is the same attitude that they have in life. The network marketing in 202, Spare Time Co., on the other hand, every wants to do because it’s cheap and easy (too easy, really).

Most things in life take real effort. Taking the time to come to Cashflow games and getting out of the Rat Race takes effort to. It just happens to be enjoyable so it doesn’t seem to be as much work. Most people that play with the Twin Cities Rich Dads and Moms are in the E Quadrant. Remember the Cashflow Quadrant? We are all trying to make our way to the Investor and Business Owner quadrants. Going through the S Quadrant (self-employed) is an excellent way to move in that direction because of extra income and business growth.

Of course, not all small businesses make it. But there are enormous tax benefits to having a “business in the basement” that is not a hobby as defined by the IRS. And that doesn’t mean the business can’t be your hobby either! After all, improving your economic means is about life style as well, right?

Any type of business or investing takes effort and your part-time business would too. The pay-off could be immediate but probably takes some amount of money to start and perhaps on an on-going basis for a while, but when you reach profitability, you have cash flow. We’ve all heard about “delayed gratification” and this kind of falls into that category.

What kind of things can you do? The possibilities are endless. You could be an online affiliate marketer, have a ecommerce site where you do no product fulfillment or orders, follow the system laid out in “The 4 Hour Work Week”, build picnic tables, create websites, manage real estate, plan parties, walk dogs, etc. You could do all of the work yourself, some of it or none it. There’s still planning, managing and funding it (and other things too) but it doesn’t have to kill you.

So when you think about your goal of getting out of the Rat Race, do you think that extra income and an asset you can sell later perhaps would help? And think of the education you’ll get!

One real important aspect of the business in the basement, or any business for that matter, is it changes how you are taxed. Remember what Rich Dad says: in a business, you make your money, you pay your expenses and you are taxed on the rest. As an employee, you make your money, you are taxed and you pay your expenses on the rest. When you have a business, there are a number of expenses that are legitimate business expenses. So it costs less to live, and you keep more.

What could be better?

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The Spare Time Co. or boosting your personal bottom line and getting out of the Rat Race with a business in the basement

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