The Rich Don’t Work for Money – The True Path to Financial Freedom

Most people starting out as self-employed in a small or home based business, find themselves working more hours than when they used to as employees, feeling overwhelmed with responsibility, with total luck of time and money freedom.

There is gab most entrepreneurs need to overcome between this ‘self-employed’ stage and the stage when you reach  financial and time freedom. According to educational entrepreneur Robert Kiyosaki, best known as the author of best selling book Rich Dad Poor Dad – considered as one of the most influential finance books of our time, there are four different mindsets that people have about money: Employee, Self-Employed, Business Owner and Investor.

By recognizing in which mindset you are right now, you can determine which specific steps you need to take, in order to reach the mindset of a successful Business Owner/Investor, who does not work for money anymore, but has their money work for them.


People in the ‘Employee’ Category dread economic uncertainty and have a strong need for security. For them, job security—which may be just an illusion—is often more important than money.  They can be messengers or presidents of companies. It’s not what they do or how much they earn that puts them in the ‘Employee’ category, but rather the fact that they’re working for others—and earning salaries and benefits.

If you remain in the Employee category for life, without entering any of the other categories, you might never acquire true time and money freedom, except maybe when you retire.


Self-Employed types are do-it-yourselfers and their own bosses. When it comes to money, they have fiercely independent souls. They don’t like to have their income depend on other people. If they work hard they expect to be paid well.

This group includes professionals such as doctors, lawyers, and architects, who spend years in school. It also includes small business owners—for example consultants, therapists, travel agents, car mechanics and hair stylists—as well as direct-commission sales people such as real estate agents.

Self-Employed types tend to be hard-core perfectionists. That’s why others hire them. Because of their perfectionism, they often have a difficult time hiring other people to work with them. To their way of thinking, no one else can do the work as well as they can. They may also be hesitant to train other people out of fear that their trainees will wind up being competitors some day. So they usually create conditions for themselves that if they don’t work, they won’t get paid, thus never achieving true time freedom and wealth, to enjoy what they work so hard for.

Business Owner

Unlike the perfectionist Self-Employed type, the Business Owner type loves to delegate work. The motto of a true Business Owner type is: Why do it myself when I can hire someone better to do it for me? The true Business Owner type can leave his or her business for over a year and return to find it more profitable than before. That’s not usually the case with someone in the Self-Employed category. When a Self-Employed type leaves his or her business for over a year, chances are there is no business to return to.

So if you are stuck in the Self-Employed category, the next step is to develop the right mindset, strategies and tactics so that you can move into the Business Owner category, where true financial freedom and time freedom begins. Business Owner’s motto is ‘Other People’s Money’ and ‘Other People’s Time’.

To be a Successful Business Owner, you need to know how to build the solid network of business systems to sell your offering. You have to be skilled in the art of leadership and learn to delegate work to others. Successful Business Owners bring out the best in their people so that their people will carefully tend the network of business systems.


Regardless of which category people make their money in, if they hope someday to be truly wealthy they must ultimately move into the Investor Category, for it is here that money becomes converted to wealth. What is wealth? Wealth is measured in time, not money. It is the number of days you can survive without physically working and still maintain your standard of living. Investor types don’t have to work because their money is working for them. This should be your ultimate goal, either as a business owner or as an employee.

Of course not everyone in the Investor Category meets with financial success. You can be poor in any of the four categories and also go bankrupt in any one. Being good in more than one category is much better than being good in just one. For example, you can be an employee who has worked out a way to be a good investor, so that you can retire earlier if you wish and that’s great.

The path to financial freedom

What usually happens with people moving out of the Employee category in order to become financially free in the Business Owner category is that they end up getting stuck with a Self-Employed type of business. The result is that they are running and running but getting nowhere in their quest to move into the Business Owner and Investor Category.

The biggest lesson that Self-Employed people need to learn in order to move into the Business Owner category is to ‘Hire people who play at things they need to work at’. They need to learn to delegate, inspire and become true leaders.

As explained by Robert Kiyosaki in detail in his book Cash Flow Quadrant, the true path to financial freedom is entering the Business Owner category and then the Investor category.

Why? Because in the Business Owner category, people will be working for you, and in the  Investor category, your money will be working for you. When you become good at those two categories is when you can have true time and money freedom and freedom from work.

So why is Robert Kiyosaki suggesting that people should enter the Business Owner Category before entering the Investor Category?  Surely, you’d rather be an investor than a business owner, right? Here’s Kiyosaki’s answer: If you have plenty of money, financial intelligence, and free time, then by all means go straight to the Investor Category. But if you don’t the first suggestion is the safest.

Here’s why: Succeeding as a Business Owner you have a greater chance of developing into a powerful Investor. After all, investors invest in businesses.  Also, if you have a business that’s up and running on its own—that doesn’t require your daily babysitting—then you’ll enter the Investor Category with two prerequisites: the free time to hunt for good opportunities, and the cash flow to support the ups and downs of investing.

You can get best selling book ‘Rich Dad Poor Dad’ on Amazon here: Rich Dad Poor Dad

The ‘Cash Flow Quadrant’ from Robert Kiyosaki analyzes in detail the four different categories described in the article and how to attain true financial freedom. Amazon link: Cash Flow Quadrant

If you are an online business owner, here is an outsourcing resource which is the ‘Secret’ that all the big guys in the industry are using for total time freedom –  Check it out here:  Replace Myself

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4 Responses

  1. Sebastien Eichler

    hi pavlina,
    we may define success with money, but is money everybody’s soul desire? there are more ways to live a life without worries and poverty.
    in most books they recommend changing your thoughts, some positive affirmations and the story goes on and on, i’ve read a few and i know these books and they all tell the same more or less.
    for those who really wanna understand in “detail” the functioning of our brain, functioning of our the sub-conscious level and how it affect one’s life, i recommend dr. joseph murphy. you’ll find the book.

    great day to everybody

  2. Pavlina Papalouka

    Hi Sebastian, thank you for your comment and your suggestion, I will definitely look into Dr Murphy’s work, it does look really interesting! I agree that happiness is definitely not about having a lot of money, although in today’s world, financial security is an important ingredient. I believe that happiness depends on what are the highest values that each person has for their life ie for one person the No1 value might be to become rich and No2 to become very recognized in their work, but for someone else happiness might be No1 about creating a family and No2 about living in nature only with the basics.
    However, due to how the economy and the business world has developed we see too many people and families suffering because of constant debt, working too many hours, feeling trapped and not able to see a way out. This is what I am exploring in this post and the solutions to this problem that Robert Kiyosaki suggests.
    I find Robert Kiyosaki’s work very interesting as I have been for a long time in the ‘self-employed’ category and struggeld. It opened my mind to new ways of thinking around business/financial behavior which I find helpful for all small and home-based business owners who are looking to create a good lifestyle for themselves. 🙂

  3. Have you ever considered creating an ebook or guest authoring on other sites? I have a blog based upon on the same subjects you discuss and would love to have you share some stories/information. I know my audience would enjoy your work. If you’re even remotely interested, feel free to shoot me an e mail.

    1. Pavlina Papalouka

      Hi ‘Backlink Service’, yes e-books have been in my mind since I started this blog as writing is one of my passions and the reason I started blogging. I am working on the first e-book right now, should be out soon! I’ll e-mail you to explore ways of cooperating 🙂

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