5 Takeaways from “Rich Dad’s CASHFLOW Quadrant”

Rich Dad’s Cashflow Quadrant” is one of the follow-ups to the outstanding “Rich Dad Poor Dad”. Both books are written by Robert Kiyosaki. This book does an amazing job of specifying the differences between each of the CashFlow Quadrants. The 4 parts of the quadrant are E – Employees, S – Self Employed, B – Business Owner, and I – Investor. The book helps us identify what quadrants we are part of and how we can transition into the B and I quadrants. The B and I quadrants are taxed less, have more financial freedom, and have more free time to spend with friends and family. The E and S quadrants are taxed at the highest rate, work harder for their money, and become enslaved to promotions and work. This book is a must-read if you find yourself in the “rat race” of work, eat, sleep, and stress. With that, let’s get into the 5 takeaways:

1) The author is adamant that the education system is there to produce employees, and not employers. The old adage of “get a degree, get a good job with benefits, and you will be secure” is a lie. The only way to be financially secure is to obtain assets that produce income (such as rental income and investment income).

2) The authors’ dad assumed job security meant financial security, that is until he lost his job. The only way to have true financial security is to build up enough assets to pay for your expenses. At that point, you would have achieved financial freedom. For example, if you can live off of $2000 a month and you have enough dividends and interest each month to pay that $2000, then you are considered financially free. You can live free and not have to work anymore. Obviously you would want to obtain more assets for more security but you would be well on your way being completely free.

3) “The only difference between a rich person and a poor person is what they do in their spare time.” This is an amazing sentence. The rich use their free time to build businesses, self educate themselves and create more wealth. The poor watch tons of tv, sleep, and complain. 

4) “In order to be successful in real life, you just play it like a game of monopoly”. Buy 4 green houses and a red hotel. It couldn’t be more clear. Buy real estate build a steady stream of income.

5) “Money is an idea that is more clearly seen with your mind”. In order to see money, the brain has to be trained. We naturally think that going to work at a job is the best form of money. However, we have to train our brains to see different money paths. For example, if you like to run, maybe you can start a running group. You could find a way to monetize the group by maybe getting a sponsor or directing the group to eat at a certain restaurant after the runs. The possibilities are endless. But the brain needs to be trained via self-education, reading, taking courses, and mentorship.

This book is a great follow up to “Rich Dad Poor Dad”. I know that I am not ready to start a business currently, but I feel that after I retire, that is the path I want to take. It will definitely be something that is out of my comfort zone, however, it’s something I feel that I need to do. The book has started me down this path. I look forward to reading it at least once a year.

This link is to a physical product. The link above is to the digital book. Sorry. I get no credit for digital product links.

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article.


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