Even if you pay off your mortgage, your house is still a liability: it has to be maintained, and you have to pay taxes on it. Your mortgage is a liability and a debt that you have to service, not an asset.
The secret to wealth is the same as the secret to win the game Monopoly: buy four green houses and then trade up for a large red hotel.With a secure system that produces money for you, you don't need to worry about unemployment. The right side of the quadrant is the safe side.To quote Buffett: "Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway." Don't hand over your investment decisions to an "expert.".The better strategy is to focus on a few investments, not on diversification. But as Warren Buffett advises, diversification is a way not to lose money, rather than a way to make money. E- and S-quadrant stock market investors focus on diversification.The opportunity for real wealth lies in the I-quadrant. The Investor, or the I-quadrant, uses money to make money.The Business owner, or the B-quadrant, has a system where other people do the work- like Henry Ford, who surrounded himself with smart people who knew all the answers so that he could concentrate on new ideas.The key to success in this S-quadrant is to know when to get out and move onto something new. Nationally, nine out of ten such businesses fail in the first five years, mostly due to a lack of experience and capital. Self-employed is the riskiest quadrant.They essentially own their job and is likely a hardcore perfectionist who values independence and expertise. The Self-employed person, or the S-quadrant, does not want their income to be dependent on other people.This person works within someone else's system to earn money. Employee, or the E-quadrant, values security above all else and seeks the safety of a long-term contractual agreement.Each of these four categories, or quadrants, has its strengths, weaknesses, and characteristics. Everyone can be categorized according to how they get their money: Employee, Self-employed, Business owner, or Investor.
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