Robert believes that the reason most people struggle financially is because they've been spent years in school but were never been taught about money. It’s for those who want to make significant changes in their lives and take control of their financial future. It’s the second book in the Rich Dad Series and reveals how some people work less, earn more, pay less in taxes, and learn to become financially free.ĬASHFLOW Quadrant was written for those who are ready to move beyond job security and enter the world of financial freedom. Image(s): FreeDigitalPhotos.Rich Dad’s CASHFLOW Quadrant is a guide to financial freedom. If you enjoyed this post please comment and share Discussion about the Cashflow QuadrantĪre you in the right quadrant? Why do you feel it is right for you? Have you any experiences like mine in the different quadrants? Be sure to share this on Facebook and post your comments below. If you want to download the Cashflow Quadrant PDF, this appears to be a link here. Here is a link to the Cashflow Quadrant game and here is a link for the Cashflow Quadrant Audiobook. I recently started putting a lot of money into insurance and very glad my friend taught me about this (shoot me an email,, if you want to know more as I KNOW more people need to know about this type of investing). Word to the wise, understand that banks rely on insurance and I fully believe that investing in insurance makes way more sense than an IRA or 401k where you have more risk and are penalized for early withdrawal. Most people cannot start in this quadrant but can work their way into it. This is where you no longer have to rely on your efforts of even the efforts of others, your money is working for you and you are just living off the interest or payouts. Probably the coolest experience from this for me was going away to Fiji for ten days on our honeymoon just to come back realizing my passive income was greater during that trip than the actual cost of the trip. People with passive income have options in how they spend their life. This is where you can develop “cashflow” or passive income that is NOT tied to your individual daily efforts but from yours and the efforts of others. This is most easily seen in network marketing but in certain cases can also be accomplished in an insurance agency or even some real estate brokerages allow you to earn off the efforts of others. The income does NOT come from the sole efforts of the owner but from people associated with the business center or unit. A “business owner” is defined as someone who earns leveraged income. Being a business owner is different than just being self-employed at least in how Kiyosaki defines the cashflow quadrant. This is not true of all of course but for the vast majority, their small business does not work and they find themselves back as an employee, working less hours but with the full realization that they might never achieve their dreams with a job. Why? Most self-employed people quit their 9-5 to work 9-9 (or worse) and they lack a system of how they could ever get leverage out of their business. Many times when I am doing a presentation and ask “How many have owned a business before?” and then ask “How many realize their business owns them?”, almost always the same hands go up. If you are in this section you might find this post useful: Can you be an entrepreneur?Īh, so surely the self employed or small business owners are better off right? Well, not always. Also know that someone ONLY in this section pays the most taxes as they have no write-offs. Even if someone absolutely loves their job, it still might make sense to at least part time look into one of the other sections as bosses, positions, wages and demands of a job change which can make a desirable job, not so desirable. This is not a leveraged way to make a living. Their income is derived from 100% of their activity, meaning, they can only increase one factor and that is their wage. Employees, typically at least, perform certain functions and get paid either an hourly wage or a salary. This post is NOT to bash any section over the other, it just enlightens you to the differences. The cashflow quadrant has four sections and teaches you the difference between all of them. If you click the image to the right, it will open up larger in a new window allowing you to easily see what it teaches. In this post I will break down the cashflow quadrant based on my experiences and it might help you to understand how to talk to people that might not understand why starting your own leveraged business is so important. Robert created the Cashflow Quadrant to easily break down the different types of careers out there and help to understand why some are more attractive than others. And Comment Below! What is the Cashflow Quadrant?Ī lot of us entrepreneurs learned from a guy named Robert Kiyosaki.
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