Season 2 - Episode #10 - The Cash Flow Quadrant - By Robert Kiyosaki

Hello, Self Developers and welcome to The Patrick Kelly Podcast for Self-Development, where I will be reviewing  audible books on Self-Development that can change your life for the better this year, and years to come. It is said that if we keep on doing what we always did, we will keep on getting what we always got. In other words, to change our output, we first have to change our input. 

Today is March 06, 2022, and This is Episode 10 of Season 2, and today we will be reviewing the audible book “The Cashflow Quadrant” By Robert Kiyosaki. This audible book will tell you which quadrant you are currently in, and how you can move from the worst quadrant, to the best quadrant that will grant you, freedom. What is the cashflow quadrant? The cashflow quadrant is a quadrant of four people that dictates how their cash flows or where their money is coming from. The quadrant is divided into 4 parts. The E quadrant is for Employees. The S quadrant is for Self Employed. The B quadrant is for Business Owners and the I quadrant is for Investors.

Chapter #1: Why Don’t You Get A Job?: What is a job? Some people think that the acronym j.o.b. means just over broke, just off the boat or juggling our bills. A job is where you start to earn money, but it is your choice if you want to stay in the job. You will never make more money than the person you work for. Your Employer will dictate when you work. Where you will work. When you will have lunch, and how long your lunch period will be. And how much money you will get paid, by trading time for money. While money is all the same, the way it’s earned, can be vastly different. If you begin to look at the four different labels for each quadrant, you might want to ask yourself, “Which quadrant do I generate the majority of my income from?” Each quadrant is different. To generate income from different quadrants requires different skills and a different personality, even if the person found in each quadrant is the same. Changing from   quadrant to quadrant is like playing tennis in the morning, and then attending the opera at night. By knowing the different features of each quadrant, you’ll have a better idea as to which quadrant, or quadrants, might be best for you.

Chapter #2: Different Quadrants, Different People: Changing quadrants is often a change at the core of who you are, how you think and how you look at the world. What Are the Core Differences of the quadrant? Behind the words a person chooses are the core values and core differences of that individual. How do I tell if a person is an E, S, B, or I without knowing much about them? One of the ways is by listening to their words. Words are powerful tools. A person’s words will always reveal their core values. Here are the words of an E quadrant, S quadrant, B quadrant and I quadrant person:

E Quadrant: Also known as an Employee will say “I am looking for a safe, secure job with good pay and   excellent benefits.”

S Quadrant: Also known as Self Employed will say “My rate is $75 per hour.” Or “My normal commission rate is six percent of the total price.” Or “I can’t seem to find people who want to work and do the job right.” Or “I’ve got more than 20 hours into this project.”

B Quadrant: Also known as a Business Owner will say “I’m looking for a new president to run my company.”

I Quadrant: Also known as an Investor will say “Is my cash flow based on an internal rate of return or net rate of return?”

Chapter #3: Why People Choose Security Over Freedom: Many people seek job security because that’s what they are taught, both at school, and at home. We are all taught to go to school, get good grades, so we can get a good job. Rich people tell their children to go to school, get good grades, to one day take over the family business, or open up their own business. One parent’s core values is based on job security, and the other parent’s core values is based on financial freedom. If you look at the CASHFLOW Quadrant, you’ll notice that the left side is motivated by security. The right side is motivated by, freedom. The left side is motivated by active income, and the right side is motivated by massive, passive income. Financial intelligence determined, not so much how much money you make, but how much money you keep, how hard that money works for you, and how many generations you can keep it. Success on the right side requires financial intelligence. If people lack basic financial intelligence, they’ll find it hard to survive on the right side of the CASHFLOW Quadrant.

Chapter #4: Three Kinds Of Business Systems: Your goal is to own a system and have people work that system for you. In moving to the B quadrant, remember that your goal is to own a system, and have people work that system for you.  You can develop the business system yourself, or you can look  for  a system  to  purchase.  Think of the system as the bridge that will allow you to cross safely from the left side of the CASHFLOW Quadrant to the right side. It’s your bridge to financial freedom. There are three main types of business systems commonly in use today. They are: 1.  Traditional C corporations—where you develop your own system 2. Franchises—where you buy an existing system 3. Network marketing—where you buy into and become part of an existing system Each business system has its strengths and weaknesses, yet each ultimately does the same thing. If operated properly, each system will provide a steady stream of income, without much physical effort on the part of the owner, once it’s up and running. The problem is getting it up, and running.

Chapter #5: The Five Levels Of Investors: Investing is the key to financial freedom. Learning to invest is important because investing is the key to financial freedom. Five things happen to people who do not invest, or who invest poorly:

1. They work hard all their lives.
2. They worry about money all their lives.
3. They depend on others, such as family, a company pension, or the government, to take care of them.
4. The boundaries of their lives are defined by money.
5. They will not know what true freedom is.

You will never know true freedom until you achieve financial freedom. Learning to invest is more important than learning a profession. When you learn a profession, let’s say to be a doctor, you learn how to work for money. Learning to invest, is learning how to have money work for you. The moment you have money working for you, you have your ticket to freedom. The more money you have working for you, the less you pay in taxes—if you are a true, investor.”

Chapter #6: You Cannot See Money With Your Eyes: Money is an idea that is more clearly seen with your mind. “It’s not what your eyes see,”. “A piece of real estate is a piece of real estate. A company’s stock certificate is a company’s stock certificate. You can see those things. But it’s what you can’t see that’s important. It’s the deal, the financial agreement, the market, the management, the risk factors, the cash flow, the corporate structuring, the tax laws, and a thousand other things, that make something a good investment or not.” Most people think, but never do. If you do something, you make mistakes, and it’s from our mistakes that we learn the most. Remember that anything important can’t really be learned in the classroom. It must be learned, by taking action, making mistakes, and then, correcting them. That’s when wisdom sets in. So, what is the first step in training your brain to see money? The answer is easy. It’s financial literacy. It begins with the ability to understand the words and the number systems of capitalism.

Chapter #7: Becoming Who You Are: The real issue is the changes you must go through and who you become in the process. If you receive money as an employee, then you get accustomed to that way of acquiring it. If you get used to generating money by being self-employed, it’s often difficult to break the attachment to earning money in that way. And if you get used to government handouts, that, too, is a hard pattern to break. “The hardest part about moving from the left side to the right side is the attachment you have, to the way you are used to earning money,”. “It’s more than breaking a habit. It’s breaking an addiction.”

An E (Employee) works for the system.

An S (Self-employed Person) is the system.

A B (Business Owner) creates, owns, and controls the system.

An I (Investor) invests money into the system.

Chapter #8: How Do I Get Rich? The formula for getting rich in Monopoly is simple, and it works in real life as well as in the game.

Four Green Houses… One Red Hotel

The secret to wealth when playing Monopoly is simply to buy four green houses, and then trade up for a large red hotel. That is all it takes. It Is Easy to Do, What Rich People Do

Doing what rich people do is easy. One of the reasons there are so many wealthy people who didn’t do well in school is because the “to-do” part of becoming wealthy is simple. You don’t have to go to school to become rich. The “to-do” part of becoming rich, is definitely not rocket science. The fact is that people who work the hardest do not wind up rich. If you want to be rich, you need to think independently, rather than go along with the crowd. One great asset of the rich is that they think differently than everyone else. If you do what everyone else does, you’ll wind up having what everyone else has. And for most people, what they have is years of hard work, unfair taxes, and a lifetime of debt. BE DO HAVE: This audible book is about strengthening your thoughts (being) so that you can take the action (doing) that will enable you to become financially free (having).

Closing Thoughts: On scale of 1 to 5, I would give this audible book, a 5, for teaching the concept of the cashflow quadrant.

*To find out more about this audible book, Go To: www.audible.com and download this audible book, or go to www.richdad.com to find out more information about the Author.

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