Most people wish they had more and earned more.  With the cost of living rising and lifestyle creeping, who doesn't wish they had a few extra pounds in their pocket or zeros on the end of their bank balance? But when was the last time you stopped to think about how you earn money and how this could be increased? Then, of course, there is the way that 99.9% of the population knows of increasing hours, looking for that promotion, but what if there were alternate ways?

In this blog, we discuss two different income models from 2 different authors. These are four types of person and four types of income to help you understand how the rich are getting rich and why the 99% struggle even if in a highly paid employed job. Although they are similar, it is only when you combine the two models that they reveal their real power. So keep reading to the end.

Type of Person

One of the first people to look at how we earn money was Robert Kiyosaki in his best-selling self-published book Rich Dad, Poor Dad, which has sold millions of copies Worldwide.

Rich Dad Poor Dad: 20th Anniversary Edition: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

He described four types of people and their wealth values and characteristics using the ESBI model as the following:

  • Employee
  • Self-employed/Small Business
  • Business
  • Investor

He suggests that to become wealthy, we need to buy assets rather than liabilities and move to become business owners and investors. As he sees it is the only way to generate real wealth.

Types of Income

The second way of looking at this is not necessarily the person but the type of income an individual generates, regardless of their role or position. Rob Moore describes this well in his book Multiple Streams of Property Income and describes the four following incomes(BEEP Model):


This type of income is any income derived from a business you own all or part of. This can be from profit, dividends etc. An important distinction is that this is not income made from work in a corporate business job. Instead, this is earned income through employment.


Earned income comes from any activity that exchanges your time for money. This is typically a job for a private or public sector organisation. As the individual is exchanging their time for money, they usually have an hourly rate and receive benefits such as sick pay and pension, giving the perception of security.


Equity income usually comes from assets such as a stake in property or shares which grow over time. This can be your home, other real estate or stocks in publicly traded companies. Alternatively, this can be an equity stake in a business you own or have interests in.


Passive income is the exact opposite of earned income. That is income that does not exchange any of your time for money. Instead, it comes in regardless of what you do. Examples include dividends from stock and shares, outsourced management of property, intellectual property, books you have written, or digital assets producing recurring income.

Multiple Streams of Property Income

What Type of Person and What Type of Income Should I Aim For?

Putting these models together is where the real magic happens and helps you understand why even highly paid employees often struggle with their incomes. Let's take each type of person and look at where their income comes from.

The employee makes up >99% of the population. They often derive their income from one job, even if highly paid, to bring income in.

Being self-employed, they often have a few employees or act as a sole trader. While exchanging their time for money, they can leverage other contractors or employees, giving them the ability to scale. Robert Kiyosaki describes this as a self-employed or small business with less than 500 employees. At this level, there is the possibility to build equity in the small business in addition to earned income, thereby providing two income streams.

The next two levels or types of a person get interesting. But first, take a look at the big business owner and the types of income they can achieve.

There can be income from their business activities which can be leveraged, so they are not exchanging their time for money. For example, a business owner or part owner can be paid as an employee or director and build income through equity as the business grows. They can also receive dividend payments from shares in the organisation. Having multiple streams of income compounding over time is a powerful way to increase income and build wealth.

The final type of person, the Investor, or professional Investor in Robert Kiyosaki's model, can also benefit from multiple income streams. For example, they can own parts of businesses, e.g. angel investors, build equity through building an asset base or earn money as a highly paid employee, e.g. Hedge Fund manager. In addition, depending on the type of Investor, they can build their passive income through dividends, property income or other forms of recurring passive income.

Robert Kiyosaki is in no doubt about where you should be if you want to generate wealth. He suggests that we should try and move from employed and self-employed to business owners and Investors. Even if you are a highly paid employee such as a Doctor or Lawyer, relying on one form of income leaves you open to financial ruin if your circumstances or external circumstances change.

What can you do about this?

I can guess what you are thinking……. it's alright to say I become a big business owner or professional Investor, but I struggle to keep my head above water and pay the bills. This is a million miles away and very difficult to put into practice. But there are steps that we can all take to change where we are and move to a more wealthy future.

Actionable Steps:

  1. Where do you see yourself in the ESBI framework? For example, are 100% and employees exchanging time for money, or do you have other ways of bringing in income?
  2. Could you work out where your income comes from in each BEEP sector? For example, even if you are exclusively an employee, you may be getting some income from equity from your home or dividends from shares. What could you do to increase some of the other income streams?
  3. What else could you do to increase income in non-earned sectors? Invest in property, start a small side business? Invest in shares? Taking one step at a time, no matter how small, will compound over time to build these alternative income streams.
  4. You can improve your financial education. No matter where you are, there are always things to learn.
  5. Follow us on Twitter at building out.
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  7. Buy and read the books in this blog which are some of the best written on building alternative income streams and changing your perspective on being an employee.

Good luck on your journey!