Of The 4 Types Of Income Earners, Only One Usually Lives A Rich Life With Lots Of Free Time
Gordon Cowie | Unsplash The true dream for most people not born with a silver spoon in their mouth is financial independence and loads of free time. Unfortunately, not all of the four types of income earners end up achieving that dream.
Existing in a late-stage capitalist economy means that most people give more than they earn. The system isn’t exactly set up in a way that prioritizes equity: People are positioned along different levels, and there’s always someone who earns more than you and someone who earns less.
There are 4 types of income earners, but only one lives a rich life with free time:
Darryl Chicoine shared his economic worldview, which he based on the 1997 book “Rich Dad, Poor Dad” by Robert Kiyosaki. Chicoine broke down economics in the simplest terms: there are four different types of income earners in society.
“In the world that we live in, there are four income quadrants,” Chicoine stated. "You can be an employee, you can be self-employed, you can be a business owner, or you can be an investor.”
The two most common are, unfortunately, the cogs in the wheel. They pay the most taxes, work the hardest, get paid the least, and have almost no free time.
1. Employees earn the least with limited free time
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Most people are employees, meaning they work for someone else and make a fixed income. “Employees are the highest tax-paying humans on this planet, which actually fuels the people who created this system, who are teaching this system," Chicoine explained. "It fuels their life, not yours."
“When you’re an employee, you trade your time for money. You try to get paid the most amount of money and do the least amount of work, get the most holidays per year, and you end up being the highest-paying tax person on the planet,” he continued.
According to data collected by the Tax Policy Center, the U.S. federal tax system is a progressive system, meaning that higher-income households are taxed more than lower-income households. Yet not all taxes in the federal system are equally progressive, and some are even regressive.
Income tax is progressive, yet as the Tax Policy Center explains, certain tax preferences, like those for capital gains, retirement savings, and home mortgage interests, make the income tax less progressive.
2. Self-employed individuals often make more money than employees, but have very little free time
The next level of income earners is self-employed people. It's a professional status that makes you “Your own boss,” as Chicoine was for a long time.
“You have no cap on your income because you’re your own boss,” he explained. “But there was a cap on my time.” A self-employed person puts in what they get out, meaning the more time they devote to working, the more money they’ll make.
“So, [being] self-employed, you sell products and services, but you’re limited on your time, on how many products and services you can sell. So, it’s still a trap, it’s just a bit of a better trap,” Chicoine said. “The people who created this system, the elites, their kids, don’t do any of these,” Chicoine exclaimed, referring to being employees and self-employed.
3. Business owners earn the most money for the work they do and get a lot of free time
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Chicoine described how he viewed a wealthy life: having access to money, resources, and an infinite amount of free time. “A rich life is whatever you think it is, whatever you would prefer to be doing every single day of your life, is a rich life,” he said.
While a so-called rich life obviously includes money, it's not the only thing of importance. “When I was self-employed in my last gig, I had lots of money, but I didn’t have free time, which is one of the things that made me realize when I had a health scare, a rich life is not about money,” Chicoine shared.
According to his theory, the wealthy people of the world first operate as business owners.“Once you’re a business owner, now you’re not limited by time and money, because now, you have systems and people and employees and operations that create income for you,” he said.
4. Investors let their money work for them and have unlimited free time
According to Chicoine’s viewpoint, business owners can level up their income and lifestyle by becoming investors. Chicoine maintained that being an employee or self-employed is “programmed into us.” The powers that be want you to “stay stuck," "keep paying the system", pay high taxes, and remain "unhappy" and "unhealthy."
Yet he declined to mention that, more often than not, wealth and access are built upon an already existing amount of wealth and access.
Even Robert Kiyosaki, the author of the book that Chicoine based his economic perspective on, isn’t immune to deep financial struggle. As of January 2023, Kiyosaki was $1.2 billion in debt, yet he maintained that losing his wealth would be the bank’s problem, not his. “If I go bust, the bank goes bust. Not my problem,” he stated.
The author and businessman explained that he uses debt as money and doesn’t save cash, a mindset that seems shortsighted at best and incredibly risky at worst.
While there’s more to life than the money you make, it’s important to note that money opens doors for opportunities like better healthcare, better childcare, and just more access all around.
In theory, we all deserve to live a rich life where we choose how we want to spend our time and money. Unfortunately, we live in a system that relies on backbreaking labor from some to prop up the few, and until we overhaul our economy, that truth will remain constant.
Alexandra Blogier, MFA, is a writer who covers psychology, social issues, relationships, self-help topics, and human interest stories.
