Entering the module
One sentence: money reaches people along five paths — and each path has its own freedom, its own risk and its own rules.
The five flows: | No. | Flow | What you sell | Who pays you | |---|---|---|---| | 1 | Employee — employment contract | your time | the employer | | 2 | Self-employed — liberal profession | your skills, on your own | the clients | | 3 | Business — your own business | a system that works even without you | the business's clients | | 4 | Investor — capital: debt and equity | your money | businesses and borrowers | | 5 | Public funds — projects and budgets | an idea + the ability to deliver it and report on it | programmes, funds, municipalities, the EU |
The first four are the quadrants from Kiyosaki's book Cashflow Quadrant (1998). The fifth is ours: the money society has set aside for shared goals, waiting for someone to turn it into work.
The motto of the fifth flow:
- Danny DeVito, as Larry Garfield in the film Other People's Money (1991), says he loves money, but there is something he loves even more — other people's money: "There's only one thing I like better: other people's money." (⚠ matches word for word in the Reelviews review and on Wikiquote, opened 21.10.2026; the film itself or its subtitles have not been checked.)
- Galin: "Money is rolling down the street, and nobody bends down to pick it up."
Chapters:
- The lemonade stand (the five flows for children)
- Flow 1 · Employee
- Flow 2 · Self-employed
- Flow 3 · Business
- Flow 4 · Investor
- Flow 5 · Public funds
- The mix: which flows you live on → The iron principle of the module
For the youngest · ages 6–7
🐣 The youngest: Money reaches people in different ways. Someone works for another person and gets a wage. Someone else bakes cakes on their own and sells them. A third person has a little stall or a shop. And shared money helps people with a good idea for the park.
Play together (5 minutes): Act out a summer street: one child sells lemonade, another helps for a coin, a third mends toys. Swap the roles. Each time, ask: "How did the money come to you this time?"
A question for the evening: "If you could earn money with something you love, what would it be?"
Chapter 1 · The lemonade stand
👧 Child One summer there are five children in the neighbourhood, and each of them earns money in a different way:
- Annie helps the neighbour sell lemonade, and he pays her €5 a day. → employee
- Bobby makes lemonade himself and sells it. If it rains, he earns nothing. → self-employed
- Vicky sets up three stalls and hires friends to sell. The stalls keep working even when she is at the seaside. → business
- George gives Vicky €20 for a new stall and gets a share of the profit. → investor
- Daisy writes to the town council: "I'd like a lemonade festival in the park." The council gives her money for the festival, but Daisy has to make a plan, keep every receipt and show at the end what she has done. → public funds
🧑 Teenager The five flows are not "good" or "bad". They differ in:
- how much you depend on your own time — 1 and 2 stop when you stop;
- risk — 3 and 4 can lose money;
- rules and accountability — 5 has the most.
Most people live on one flow; some live on several.
🧔 Adult The framework helps you see the structure of your income, not just the total. Two people with the same yearly income can be very differently protected:
- one depends on a single salary;
- the other has a salary, a small share in a business and a funded project.
Pecuvo tells them apart in the portfolio: every item of income carries a flow number, 1–5.
Scene for 3D: a park with five stalls. The child walks between them. At each one "it starts to rain" (risk), and you can see who keeps earning.
Chapter 2 · Flow 1 · Employee (employment contract)
👧 Child You work for someone else and they pay you every month. It is safe, but however hard you try, you usually get the agreed amount.
🧑 Teenager An employment contract gives you:
- a regular salary;
- paid holiday;
- sick pay;
- the employer pays part of the social security contributions (pension, health).
You sell your time. You grow through skills, promotion or changing jobs. In most countries tax and social security contributions are deducted from your pay before it reaches you; your payslip shows gross pay, each deduction and net pay. How income from a salary is taxed, and how contributions are split between worker and employer, is decided by each country — the EU does not set these rates.
Example: Bulgaria — income from a salary is taxed at a flat rate of 10 % under the Personal Income Tax Act ✔, and social security contributions are split between the worker and the employer ✔. The exact contribution rates change — check with the National Revenue Agency (NRA, НАП) and the National Social Security Institute (NSSI, НОИ).
Check in your country — your payslip (gross pay, tax, contributions, net pay); the national tax authority for income tax rates; the social security institute for contribution rates and what they entitle you to. A neutral starting point: the European Commission's Your Europe portal, pages on work and social security (https://europa.eu/youreurope/citizens/work/index_en.htm) ✔ (opened 21.10.2026).
🧔 Adult The strength of flow 1 is predictability: banks value it when you ask for a loan, and households value it when they plan the budget. Its weakness is the ceiling and the dependence: one salary is one source; losing the job means losing the whole flow. That is why an emergency reserve of 3–6 months (The eight iron principles of cash flow) matters most right here. The best investment in flow 1 is skills (Where to reinvest: true value — reinvesting in yourself).
Myth → truth
- Myth: "A salaried job is for people with no ambition."
- Truth: most people in the world live on flow 1. For many of them it is the support that makes the other flows possible.
Who profits? The employer — from the difference between the value of the work and the wage. The state — from taxes and contributions, which are deducted automatically.
Scene for 3D: a clock that turns into coins. When the clock stops, the coins stop too.
→ Continue at the source
- Your national tax authority — personal income tax. Example: Bulgaria's National Revenue Agency: https://nra.bg ✔
- Your national social security institute — contributions. Example: Bulgaria's National Social Security Institute: https://www.nssi.bg ✔
Sources
- ✔ Example: Bulgaria — the Labour Code; the Personal Income Tax Act (flat tax of 10 %); other rates are taken from the NRA and NSSI with a date.
Chapter 3 · Flow 2 · Self-employed (liberal profession)
👧 Child You are both the boss and the worker. You decide when to work, but if you fall ill or there are no clients, there is no money.
🧑 Teenager A liberal profession means you sell your skills directly to clients: designer, translator, programmer, doctor with a private practice, lawyer. You have more freedom, but:
- you pay your own social security contributions;
- you keep your own accounts;
- you find your own clients;
- you have no paid holiday.
Most countries have separate tax rules for the self-employed — for example, which costs you may deduct from your income and how you pay contributions. These rules are national.
Example: Bulgaria — the tax regime for liberal professions has its own rules, such as statutory deductible expenses (a fixed share of income treated as costs) under the Personal Income Tax Act ✔. Check the current rules with the National Revenue Agency (NRA).
Check in your country — the national tax authority's pages for the self-employed: how to register, which expenses are recognised, how and when you pay tax and contributions in advance, and whether you need to file a yearly tax return.
🧔 Adult The trap of flow 2: it looks like a business, but it is really a job without an employer. When you stop, the income stops. Ways out of the trap:
- raising your hourly rate;
- making products that sell without your time;
- or moving to flow 3 — hiring people and building a system.
Separate accounts for personal and professional money are not a formality (The eight iron principles of cash flow).
Myth → truth
- Myth: "As a freelancer you earn more."
- Truth: sometimes. But compare it with everything an employer would otherwise pay: contributions, holiday, equipment, empty months.
Who profits? Clients — flexibility without a long commitment. Freelancer platforms — from commissions.
Scene for 3D: a person juggling five balls — "clients", "accounts", "taxes", "skills", "rest". The child adds balls and sees when they start to fall.
→ Continue at the source
- Your national tax authority — the self-employed. Example: Bulgaria's NRA, liberal professions: https://nra.bg ✔
- The Guide — Kiyosaki, the S quadrant (with an honest note).
Sources
- ✔ Example: Bulgaria — Personal Income Tax Act, income from liberal professions.
Chapter 4 · Flow 3 · Business (your own business)
👧 Child A business is a machine that keeps working even while you are playing. But first you have to build it — and sometimes the machine breaks down.
🧑 Teenager The difference between self-employed and business: in a business, the system works — people, processes, a brand. Not just you. Most often it is a company with limited liability, which:
- pays corporate tax on its profit;
- can pay out the profit to its owners as a dividend, which is also taxed.
Corporate tax and dividend tax are set by each country.
Example: Bulgaria — the usual forms are a single-owner or multi-owner limited liability company (EOOD, ЕООД / OOD, ООД). Corporate tax is 10 % (Corporate Income Tax Act, Art. 20) ✔ and the final tax on dividends paid to individuals is 5 % (Personal Income Tax Act, Art. 46(3)) ✔ (texts of the laws as amended up to State Gazette No. 85 of 2026, opened 21.10.2026). Rates change — check with the NRA before publication.
Check in your country — the business register (company forms and how to register), the national tax authority (corporate tax, dividend tax), and the Your Europe portal's pages for businesses (https://europa.eu/youreurope/business/index_en.htm) ✔ (opened 21.10.2026).
The risk is high: many new businesses close in their first years ✔ (Eurostat tracks survival up to 5 years across the EU).
🧔 Adult A business brings two kinds of value:
- the current flow — the profit;
- the capital value — what the company itself is worth.
That is why flows 3 and 4 overlap: the owner is also an investor in their own business. The company's money is not the owner's money. Mixing them leads to tax and legal risks. That is why Pecuvo keeps the spaces separate: company ≠ person. Cash flow ≠ profit (The eight iron principles of cash flow): a profitable company can go bankrupt with no cash in the till.
Myth → truth
- Myth: "Your own business is passive income."
- Truth: for years, it is not. It becomes "more passive" when the system works without you — if it does.
Who profits? Clients, employees, the state. The owner — last, after all of them.
Scene for 3D: the child builds a machine of cogwheels — people, processes, clients. Then takes themselves out of the machine and watches whether it still turns.
→ Continue at the source
- The Guide — Kiyosaki, the B quadrant.
- Pecuvo — the "Company" space (budget against actual, weekly balance).
Sources
- ✔ Example: Bulgaria — Corporate Income Tax Act, Art. 20 (corporate tax 10 %); Personal Income Tax Act, Art. 46(3) (final tax on dividends to individuals 5 %) (texts of the laws as amended up to State Gazette No. 85 of 2026, opened 21.10.2026). Rates change — check the NRA as well before publication.
- ✔ Eurostat — business demography: https://ec.europa.eu/eurostat/web/structural-business-statistics/entrepreneurship/business-demography
Chapter 5 · Flow 4 · Investor (capital: debt and equity)
👧 Child An investor gives their money to someone else to "make it work". They can lend it and get interest. Or they can buy a piece of a business and get part of the profit. Sometimes the money comes back bigger, sometimes smaller.
🧑 Teenager Two main ways:
- debt — you lend: bonds, deposits, loans. You get interest and your money back, if the borrower can pay;
- equity — you become a co-owner: shares, stakes. You get part of the profit and of the value — but also of the loss.
Debt is more predictable. Equity offers more possible profit and more risk.
🧔 Adult An investor works with capital, not time. But capital needs knowledge too: what you are buying, from whom, with what fees, how quickly it turns into cash (Assets and cash equivalents). Leverage means investing with borrowed money — a mortgage for a property, margin trading. It magnifies both the gain and the loss. This is where Kiyosaki differs most from the conservative authors (the Guide). Diversification (Markowitz, 1952) reduces your dependence on a single issuer. It does not reduce the risk of the market as a whole.
🎓 The academic basis: diversification is one of the "Big Three" financial literacy questions (Lusardi & Mitchell). It is the one people get wrong most often.
Myth → truth
- Myth: "Investors earn without working."
- Truth: their work is to choose, to check and to carry the risk. Most non-professionals who trade actively fall behind the market ✔ (Barber & Odean, 2000).
Who profits? The intermediaries — from every trade and every fee, whether or not you profit.
Scene for 3D: two doors — "I lend" and "I become a co-owner". Behind each, the child sees what happens to the coin in a good year and in a bad year.
→ Continue at the source
- The Guide — Kiyosaki (the I quadrant), Graham, Bogle (next wave).
- Your national financial supervisor — registers of licensed firms. Example: Bulgaria's Financial Supervision Commission (FSC, КФН), "Registers and enquiries": https://www.fsc.bg/registri-i-spravki/ ✔ (opened 21.10.2026).
Sources
- ✔ Lusardi & Mitchell (2014) — see
04_Akademichna_osnova. - ✔ Markowitz, "Portfolio Selection", Journal of Finance, vol. 7, no. 1, 1952.
- ✔ Barber & Odean (2000), "Trading Is Hazardous to Your Wealth", Journal of Finance, vol. 55, no. 2, pp. 773–806, DOI 10.1111/0022-1082.00226.
Chapter 6 · Flow 5 · Public funds (projects and budgets)
👧 Child The town, the country and Europe have money set aside for good shared things: parks, schools, festivals, new skills. This money is not just handed out. You bring an idea and a plan, you get the money, you do exactly what you promised and you show where every coin went.
🧑 Teenager EU programmes, national programmes and municipal budgets fund projects run by NGOs, companies, schools and municipalities. The mechanics are:
- call for proposals;
- project proposal (idea, activities, budget);
- evaluation;
- contract;
- implementation;
- report;
- audit.
The money is not "free": it comes with rules, deadlines and responsibility. If they are not kept, the money is paid back.
🧔 Adult Flow 5 is managing other people's money for a shared goal. That is why it demands the strongest discipline of all five:
- a budget by line;
- eligibility of costs;
- a document for every cost;
- separate accounting;
- reporting and audit.
The most common loss is not fraud but a broken rule: an ineligible cost, a missed deadline, a missing document → a financial correction. In Pecuvo this flow is the one most closely tied to the tool: a project space, budget against actual, weekly balance, a link to the accounting system (ACE).
Why "money is rolling down the street": there are many programmes, but to get money from them you need to be able to write, deliver and report on a project. It is a skill that can be learnt — which makes it both an opportunity and a responsibility. How much of the money is actually used can be seen programme by programme in the European Commission's open data (https://cohesiondata.ec.europa.eu).
The line: misusing public funds is a crime (Fraud, pyramids and getting rich quick — "how to get rich quick" comes bundled with the criminal code). Suspected fraud involving EU funds can be reported directly to the European Anti-Fraud Office (OLAF) ✔ (https://anti-fraud.ec.europa.eu/olaf-and-you/report-fraud_en), and in every EU country to the national anti-fraud coordination service (AFCOS) — each Member State must designate one (Regulation (EU, Euratom) No 883/2013, Art. 12a(1), https://eur-lex.europa.eu/eli/reg/2013/883/oj) ✔.
Example: Bulgaria — reports of fraud with EU funds go to the AFCOS directorate at the Ministry of Interior (online form "Submit a report") and to OLAF ✔ (https://www.mvr.bg/afcos, opened 21.10.2026).
Check in your country — your country's AFCOS (every EU member state has one) and the managing authority of the programme that funds you; OLAF accepts reports from anywhere.
Myth → truth
- Myth: "Grants are free money."
- Truth: they are money in exchange for results and accountability. They cost work, time and discipline — and that is why few people take them.
Who profits? Society — if the project delivers. The organisation — capacity, a team, a reputation. Consultants — from writing projects. Everyone loses if the money is spent without purpose.
Scene for 3D: a street where glowing coins roll along, labelled "education", "green", "culture". The child can pick up a coin only if they carry three things: a plan, a budget and a folder for documents. If they drop the folder, the coin rolls back into the street.
→ Continue at the source
- grants.varnahub.com — the funding radar for NGOs (calls from the European Commission and from Bulgaria's national system for EU funds) — our tool.
- The European Commission's Funding & Tenders Portal (SEDIA): https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/home ✔
- Example: Bulgaria — UMIS 2020 (ИСУН), Bulgaria's system for EU funds: https://eumis2020.government.bg ✔ · information: https://www.eufunds.bg
- Pecuvo's "Portfolio" — budget → implementation → report → accounting.
Sources
- ✔ Regulation (EU) 2021/1060 (common provisions for the funds) — eligibility, corrections: https://eur-lex.europa.eu/eli/reg/2021/1060/oj
- ✔ OLAF — reporting: https://anti-fraud.ec.europa.eu/olaf-and-you/report-fraud_en · ✔ Example: Bulgaria — AFCOS (Ministry of Interior), online form "Submit a report" (Information centre → Reports): https://www.mvr.bg/afcos (opened 21.10.2026).
- ✔ Data on the use of funds: https://cohesiondata.ec.europa.eu
- ⚠ Other People's Money (1991), dir. Norman Jewison — Larry Garfield's line from the opening monologue was checked against the Reelviews review (https://www.reelviews.net/reelviews/other-people-s-money) and Wikiquote (https://en.wikiquote.org/wiki/Other_People%27s_Money), opened 21.10.2026 — not against the film itself; to be heard or checked against the subtitles.
Chapter 7 · The mix: which flows you live on
👧 Child If you have only one stall and it rains, you are left with nothing. If you have two different ones, one of them can keep going.
🧑 Teenager Most people start with flow 1 — a first job. Over time some add:
- 2 — a side practice;
- 4 — savings that work;
- 3 — their own company;
- 5 — projects.
There is no required order and no "right" flow. There is one question: how much of my life depends on a single flow?
🧔 Adult Typical mixes:
- 1 + 4 — salary + long-term savings;
- 2 + 5 — an expert who works on projects;
- 3 + 4 — an owner who reinvests;
- 1 + 5 — an employee of an organisation that runs projects.
Each mix needs a different reserve and a different cash flow discipline (The eight iron principles of cash flow). And in flow 5 — different reporting too. The framework is not a ladder you "must" climb, but a map that shows you where you are.
Myth → truth
- Myth: "The goal is to reach 'investor' and stop working."
- Truth: the goal is resilience and meaning — see the modules Values and rules for life, and Where to reinvest: true value. For one person that is a good salary and time for the family; for another — a company or projects.
Who profits? "Passive income" courses profit from the dream of flow 4 without work (Fraud, pyramids and getting rich quick).
Scene for 3D: a river with five tributaries. The child "dries up" one tributary and watches how much still flows down the river.
The iron principle of the module
Know which flow your money comes from and how much your life depends on a single flow. And guard other people's money — from an investor, a client or society — more strictly than your own.
- 👧 Child: "Which stall does my money come from?"
- 🧑 Teenager: what will your first job be, and what skill will you add so that you have a second flow?
- 🧔 Adult: what share of your income comes from a single flow? How many months could you manage if it stopped?
Your step in Pecuvo: in the portfolio, tag every item of income with flow 1–5. Look at the split over the last 12 months and how much of it sits in one basket. For flow 5, open a project space with a budget.
Check yourself (3 questions per level)
- 👧 1. Which child at the stalls was the investor? 2. What do you need to bring to get public money? 3. Why is it good to have more than one stall?
- 🧑 1. What is the difference between self-employed and business? 2. Debt or equity — which is more predictable, and why? 3. Why are grants not "free money"?
- 🧔 1. What is the trap of flow 2? 2. What is leverage, and what does it do to risk? 3. What is the most common cause of loss with public funds?