Where Do You Fit In The Cashflow Quadrant?

Finance Tid Bits

Where Do You Fit In The Cashflow Quadrant?

30th June 2007

I personally love to read books of a financial and business genus. In one way or another they have had an influence on my personal finance life so yes they are relevant and practical. I remember the first time I was in bad debt and financial trouble. I read a book by Robert Kiyosaki titled "The ABCs Of Getting Out Of Debt." There were practical steps to follow in oder to get out of bad debt and they worked for me as I'm sure they will work for anyone who is willing to follow them.

Finance Tid Bits Today though I want to tell you about another book by Robert Kiyosaki titled "The Cashflow Quadrant." Before I talk to you about that, I'm pretty sure you are wondering why I like Robert Kiyosaki so much and aren't I making him richer by buying all these books of his? In a way I am making him sales for his books but I really don't mind and here's why. Robert Kiyosaki's net worth is estimated to be at US$80 million and he is a self-made millionaire. I've read his books and followed his advice and it has worked for me. Now let me ask you a question. If you want to learn how to become wealthy are you going to seek advice from someone who is wealthy? Or are you going to seek advice from a financial advisor or chatered accountant who is trained professionally to advise you on money matters but they are not personally wealthy? You'll spend more on these guys than on buying a book guaranteed!

The cashflow quadrant is an interesting and ingenious way looking at your current financial status and where you ultimately want your financial future to be. Now I like the 80 - 20 philosophy. The people on the left side of the quadrant form 80% and the majority of the population. The people on the right hand side of the cashflow quadrant form 20% and are the minority of the population. Below is the cashflow quadrant:

Cashflow Quadrant by Robert Kiyosaki

E: Employee — Working for someone else
S: Self-employed or Small business owner — Where a person owns his own job and is his own boss
B: Business owner — Where a person owns a "system" of making money, rather than a job to make money
I: Investor — Spending money in order to receive a larger payout in return

Wikipedia writes that "For those on the left side of the divide (E and S), Kiyosaki says that they may never obtain true wealth. Conversely, those on the right side of the divide (B and I) are supposedly following the only road to true wealth."

Having said this it is pretty easy to figure out that the E and S are the ones that work the hardest and they work for money. The B and I work hard too but their money works for them. In his book Robert also talks about ways in which you can move from the left (80%) to the right (20%). So which side fo the quadrant are you on and which side would you rather be on?

"Your future is created by what you do today, not tomorrow. " - Robert Kiyosaki

Comments (13):

Vince Says: I have a boss so I'm definately on the wrong side of the quadrant | 06.30.2007 |

Chris Says: I choose the right hand side | 06.30.2007 |

James Says: I read the book and yes I choose the right hand side although I believe most people start on the left and then work their way to the right. Some never get it quite right though | 06.30.2007 |

Pamela Says: I currently fit into the left but I have made it my mission to fit into the right side in this lifetime so wish me luck! | 06.30.2007 |

Sylvia Says: Good luck Pam and I'm also following the same mission | 06.30.2007 |

Linda Says: I am currently on both the left and right although I'm still more on the left side | 06.30.2007 |

Jason Says: I'm in the same boat although you need to make a complete cross over from left to right. That's my main objective since I'm a bit of both and it sure isn't the best of both worlds in this case | 06.30.2007 |

Leo Says: Good one Jason, best of both worlds! Financially there's no such thing it's either or. I am on the left but I am trying to move to the right | 06.30.2007 |

Karen Says: I'm on the left too and under the E. I'm going to need some serious help to get to the right but I'm willing to try | 06.30.2007 |

Sean Says: Still to the left | 06.30.2007 |

Mercy Says: I want to move to the right I'm sure everyone does | 06.30.2007 |

Gary Says: In a perfect world we'd all be on the right side | 06.30.2007 |

Lillian Says: Since it ain't a perfect world I am on the left!! | 06.30.2007 |

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Where Do You Fit In The Cashflow Quadrant?

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