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How To Apply The Cashflow Quadrant Concept

This document outlines seven steps to apply Robert Kiyosaki's Cashflow Quadrant concept from his book Rich Dad Poor Dad. It explains the four quadrants - Employee, Self-Employed, Business Owner, and Investor - and encourages the reader to identify their current quadrant, decide where they want to be for financial freedom, and gain the skills and intelligence needed to transition successfully. While pursuing financial freedom through business ownership or investing offers greater rewards, it also carries more risks and requires fundamental changes, continuous learning, and stepping outside one's comfort zone.

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Zulhilmi Rosli
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1K views2 pages

How To Apply The Cashflow Quadrant Concept

This document outlines seven steps to apply Robert Kiyosaki's Cashflow Quadrant concept from his book Rich Dad Poor Dad. It explains the four quadrants - Employee, Self-Employed, Business Owner, and Investor - and encourages the reader to identify their current quadrant, decide where they want to be for financial freedom, and gain the skills and intelligence needed to transition successfully. While pursuing financial freedom through business ownership or investing offers greater rewards, it also carries more risks and requires fundamental changes, continuous learning, and stepping outside one's comfort zone.

Uploaded by

Zulhilmi Rosli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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How to Apply the Cashflow Quadrant Concept

Edited by Keelan Cunningham, Teresa, Luv_sarah, Peter and 8 others


All of us in one way or another desire financial security and many of us dream of attaining
financial freedom. Robert Kiyosakis Rich Dad, Poor Dads Cash-flow Quadrant book and
board game teach the principals of income, assets and cash flow. Understanding the
different methods by which income or money is generated and how it is utilized is
essentially what Cash-flow Quadrant is about.
Step 1
Learn about the concept of the 4 individuals. The basic premise of the Rich Dad, Poor
Dad series of books is that the business world is made up of largely 4 types of individuals:
Employee (E) has a job.
Self-Employed (S) owns a job.
Business Owner (B) owns a business system.
Investor (I) makes money work for them.
Step 2
Identify where you are now. Identifying where you are in this Cash-flow Quadrant can
be done by looking at where most of your income comes from. What affects which
quadrant we decide to generate our income from is due to internal differences in our core
values, interests, outlook, life stage etc.
Step 3
Decide where you want to be. Traditional schooling teaches us largely to focus on
become an Employee (E) or a high-paid Self-Employed(S) individual such as a doctor,
lawyer or accountant. While there is nothing wrong with this idea, it becomes a problem if
your primary goal is to attain financial freedom. Financial freedom is seldom to be found
in these quadrants.
Step 4
Decide if financial freedom is for you. The words financial and freedom go hand-in-
hand. You can never really be truly free in the modern world we live in unless you are
financially free. The whole purpose of life is to generate and experience more life. Money
allows you to live more life. Financial freedom is when you have enough wealth (assets
and cash-flow) to allow you live more life on a sustainable basis.
Changing quadrants is a life-changing experience and often requires a
fundamental shift in ones core values in order to come about.
This requires massive action and massive personal transformation. You will be
required to step outside your comfort zone. Once you have crossed the proverbial
Rubicon, or "crossed from the left side of the quadrant into right side", there is
generally no turning back.
Step 5
Gain financial intelligence. The attainment of financial freedom requires a high level of
financial intelligence. You need to be ready to move beyond job security (in the E
quadrant) in order to begin your journey towards financial freedom. Be under no illusions
though; it is a bumpy, windy road laden with risks that need to be constantly managed. It
is NOT for you if you want a secure, normal life. However, if you are prepared to make the
leap, the prize at the end of this particular journey is financial freedom.
Step 6
Become aware of the risks included. It is important to note that success is not
guaranteed. For example, 80% of businesses start-ups never get to celebrate their 5th
birthday. And of those that have become a successful, many successful Bs have lost
their money through over-confidential forays in the I quadrant. The road to financial
freedom is littered with casualties and people who turn back on their goals out of fear.
Step 7
Get the skills needed. Many of the skills required to be successful as a Business Owner
(B) or Investor (I) are not taught in school. In fact its remarkable just how many successful
businessmen left school early but got their real education in the cut and thrust of the
business world. Most successful business owners are innately curious, knowledge-thirsty
and uncompromising in the pursuit of their goals. They chose to learn through Mentors;
they read voraciously, and attend training courses and educational seminars converting
this knowledge into action.
The rules of the game are totally different in each quadrant. They are completely
different worlds and require different mindsets, tools, skills and behavior.
Continuous learning and education will be your constant bedfellows in order to help
you on this journey through each quadrant.

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