CASHFLOW Quadrant (Kim Tứ Đồ) by Robert Kiyosaki

Which quadrant are you in? Is it the right one for you?

Are you financially free? The CASHFLOW Quadrant was written for you if your life has come to a financial fork in the road. If you want to take control of what you do today in order to change your financial destiny it will help you chart your course. This is the CASHFLOW Quadrant:

The letters in eCashflow Quadrantach quadrant represent:

E for employee
S for self-employed
B
for business owner
I
for investor

Each of us resides in at least one of the four quadrants of the CASHFLOW Quadrant. Where we are is determined by where our cash comes from. Many of us rely on paychecks and are therefore employees, while others are self-employed. Employees and self-employed individuals reside on the left side of the CASHFLOW Quadrant. The right side of the CASHFLOW Quadrant is for individuals who receive their cash from businesses they own or investments they own.

The CASHFLOW Quadrant is about the four different types of people who make up the world of business, who they are and what makes individuals in each quadrant unique. It will help you define where you are in the Quadrant today and help you chart a course for where you want to be in the future as you choose your own path to financial freedom. While financial freedom can be found in all four of the quadrants, the skills of a “B” or “I” will help you reach your financial goals more quickly. A successful “E” should also become a successful “I”.

WHAT DO YOU WANT TO BE WHEN YOU GROW UP?

This book is in many ways Part 2 of my book, Rich Dad Poor Dad. For those of you who may not have read Rich Dad Poor Dad, it was about the different lessons my two dads taught me about the subject of money and life choices. One was my real dad and the other my best friend’s dad. One was highly educated and the other a high school drop-out. One was poor and the other rich.

Whenever I was asked the question, “What do you want to be when you grow up?”

My highly educated but poor dad always recommended,

“Go to school, get good grades, an

d then find a safe secure job.”

He was recommending a life’s path that looked like this.

Poor Dad’s Advice:

Poor dad wasCashflow Quadrant recommending that I choose to become either a high paid “E”, employee, or a high paid “S”, self employed professional, such as a medical doctor, lawyer, or accountant. My poor dad was very concerned about a steady paycheck, benefits, and job security. That is why he was a high paid government official; the head of education for the State of Hawaii.

My rich, but uneducated dad, on the other hand, offered very different advice.

He recommended,

“Go to school, graduate, build businesses and become a successful investor.”

He was recommending a life’s path that looked like this.

Rich Dad’s Advice:

Cashflow Quadrant

This book is about the

mental, emotional, and educational process I went through

in following my rich dad’s advice.

WHO THIS BOOK IS FOR

This book is written for people who are ready to change quadrants. This book is especially for individuals who are currently in the “E” and “S” categories and are contemplating b

ecoming “B’s” or “I’s”. It is for people who are ready to move beyond job security and begin to achieve financial security. It is not an easy life’s path but the prize at the end of the journey is worth the journey. It is the journey to financial freedom.

Rich dad told me a simple story when I was 12 years old that has guided me to great wealth and financial freedom. It was rich dad’s way of explaining the difference between the left side of the CASHFLOW Quadrant, the “E” and “S” quadrants, from the right side or the “B” and “I” quadrants. It goes:

“Once upon a time there was this quaint little village. It was a great place to live except for one problem. The village had no water unless it rained. To solve this problem once and for all, the village elders decided to put out to bid the contract to have water delivered to the village on a daily basis. Two people volunteered to take on the task and the elders awarded the contract to both of them. They felt that a little competition would keep prices low and insure a back up supply of water.

The first of the two people who won the contract, Ed, immediately ran out, bought two galvanized steel buckets and began running back and forth along the trail to the lake which was a mile away. He immediately began making money as he labored morning to dusk hauling water from the lake with his two buckets. He would empty them into the large concrete holding tank the village had built. Each morning he had to get up before the rest of the village awoke to make sure there was enough water for the village when it wanted it. It was hard work, but he was very happy to be making money and for having one of the two exclusive contracts for this business.

The second winning contractor, Bill, disappeared for a while. He was not seen for months, which made Ed very happy since he had no competition. Ed was making all the money.

Instead of buying two buckets to compete with Ed, Bill had written a business plan, created a corporation, found four investors, employed a president to do the work, and returned six months later with a construction crew. Within a year his team had built a large volume stainless steel pipeline which connected the village to the lake.

At the grand opening celebration, Bill announced that his water was cleaner than Ed’s water. Bill knew that there had been complaints about dirt in Ed’s water. Bill also announced that he could supply the village with water 24 hours a day, 7 days a week. Ed could only deliver water on the weekdays … he did not work on weekends. Then Bill announced that he would charge 75% less than Ed did for this higher quality and more reliable source of water. The village cheered and ran immediately for the faucet at the end of Bill’s pipeline.

In order to compete, Ed immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better service, he hired his two sons to give him a hand for the night shift and on weekends. When his boys went off to college, he said to them,

‘Hurry back because someday this business will belong to you.’

For some reason, after college, his two sons never returned. Eventually Ed had employees and union problems. The union was demanding higher wages, better benefits, and wanted its members to only haul one bucket at a time.

Bill, on the other hand, realized that if this village needed water then other villages must need water too. He rewrote his business plan and went off to sell his high speed, high volume, low cost, and clean water delivery system to villages throughout the world. He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water everyday. Regardless if he works or not, billions of people consume billions of buckets of water, and all that money pours into his bank account. Bill had developed a pipeline to deliver money to himself as well as water to the villages.

Bill lived happily ever after and Ed worked hard for the rest of his life and had @inancial problems forever after. The end.”

That story about Bill and Ed has guided me for years. It has assisted me in my life’s decision making process. I often ask myself,

“Am I building a pipeline or hauling buckets?”

“Am I working hard or am I working smart?”

And the answers to those questions have made me financially free.

That is what this book is about. It is about what it takes to become a “B” and an “I”. It is for people who are tired of hauling buckets and are ready to build pipelines for cash to flow into their pockets… not out of their pockets.

This book is divided into three parts.

Part One: The first part of this book is about the core differences between people in the four quadrants. it is about why certain people gravitate to certain quadrants and often get stuck there without realizing it. It will help you identify there you are today in the Quadrant and where you want to be in five years.

Part Two: The second part of this book is about personal change. It is more about “who” you have to be instead of what you have to do.

Part Three: The third part of this book defines seven steps you can take on your path to the right side of the Quadrant I will share more of my rich dad’s secrets on the skills required to be a successful “B” and “I”. It will help you choose your own path to financial freedom.

Throughout The CASHFLOW Quadrant I continue to stress the importance of financial intelligence. If you want to operate on the right side of the quadrant, the “B” and “I” side, a person needs to be smarter than if you choose to stay on the left side as an “E” or “S”.

To be a “B” or “I”, you must be able to control the direction your cash flow is flowing. This book is written for people who are ready to make changes in their lives. It is written for people who are ready to move beyond job security and begin to build their own pipelines to achieve financial freedom.

We are in the dawning of the information Age and this age will offer more opportunities than ever before for financial reward. It will be individuals with the skills of the “B’s” and “I’s” who will be able to identify and seize those opportunities. To be successful in the Information Age, a person will need information from all four quadrants. Unfortunately, our schools are still in the Industrial Age and still prepare students for only the left side of the Quadrant.

If you are looking for new answers to move forward into the Information Age, then this book is written for you. It is written to assist you in your journey into the Information Age. It does not have all the answers … but it will share the deep personal and guiding insights I gained as I traveled from the “E” and “S” side of the CASHFLOW Quadrant, to the “B” and “I” side.

Source: http://www.eflanger.com/homefront/business/Cfquad.htm

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