The CashFlow Quadrant If you have never read the Cashflow Quadrant by Robert Kiyosaki, I highly recommend reading it as soon as possible. In this book he explains that everybody falls into at least one of four quadrants.
Either you're an E,S,B, or I (Employee, Self employed, a "B" type Business owner or an Investor)
The left side (the Employees and self employed people) trade their most precious commodity which is "TIME" for income. The employee will go to work every day and exchange their hours for dollars. The Self Employed person will also go to work every day and exchange their hours for dollars but instead of having a job, they own a job. In fact, quite often the "S" stands for stress because these people are stressed out. Why? Because they are responsible for the success of their "S" type business as well as the expenses that come with it. They have to pay for the supplies, the buildings, the utilities, the trucks, the gas etc.. They are also the last ones to get paid since they owe their employees a paycheck first (whether or not they have a good week). An example of people that fall into the "S" quadrant are: Doctors, Lawyers, landscapers, electricians, plumbers, carpenters, etc. I could go on all day and list off all the Self Employed businesses where the owner still has to trade their time for money but you get the idea. It is said that 95% of people are in either of these two quadrants generating 5% of the money.
I would venture to say that when an employee gets fed up with their situation they try to move from the "E" quadrant to the "S" thinking that they will free up their Time however; what ultimately happens is that instead of having a job they own a job. What they really meant to do is switch sides of the quadrant which brings us to the Right side.
The Right side consists of 5% of the people who generate 95% of the money.
The "B" type business owners are the people who invest their time and money into "Systems" that generate passive Incomes that free up their time. It is sometimes said that these people can "make money while they sleep" because they have a system that generates passive income.
Now lets move on to the "I" or the Investor quadrant. This type of income is called portfolio income (when money generates money). This is the quadrant that is usually entered when people have enough Passive Income (the type of income that is generated in the "B" quadrant) to filter into different types of investments. It is said that if a person doesn't have $250,000 that they could lose in an instant and it wouldn't even make a dent in their finances, then they're really not the type of investor that is on the right side of the quadrant.
By now you should realize that the people on the left side of the quadrant (the "E" and "S" ) make up 95% of the population, but only generate 5% of the total dollars. That's like having 20 people fight over 1 dollar (The Rat Race). They trade their time for income.
The people on the right side of the quadrant (the "B" and "I" ) make up 5% of the population, but generate 95% of the total dollars. They invest their time and money into systems that generate passive and portfolio income.
Robert Kiyosaki explains that what you need to move from the left side of the quadrant to the right side is INFORMATION from the correct source. Now let me ask you a question.
WHAT SIDE OF THE QUADRANT DO YOU WANT TO BE ON?
The CashFlow Quadrant Full audiobook
