Rich Dad’s Cashflow Quadrant – Robert T Kiyosaki
Key Themes:
Business, Wealth, Investment, Financial Education, Personal Finance
Summary:
Rich Dad’s Cashflow Quadrant is Kiyosaki’s follow-up guide to his infamous book Rich Dad, Poor Dad. The book focuses on the importance of achieving financial security and the ‘money’ philosophy shared in his first book. In this book, Kiyosaki outlines his philosophy for categorising people with regards to how they earn / make money. The Quadrant focuses on the four key sections – E for employees, S for small businesses or self-employed people, B for bigger businesses and I for investors. The quadrants are meant to identify your current position in terms of personal finance and help you plan where you want to be in the future.
Content Overview:
Rich Dad’s Cashflow Quadrant is a book for our times and contains the following 3 key lessons:
- A good education, high grades and a safe secure job rarely lead to financial freedom.
- Changing quadrants isn’t like changing jobs or changing professions. You need to change how you think and how you view the world.
- In order to become financially secure, you don’t have to overwork yourself. You simply need to build a system that can support you whether you work or not.
The whole book provides a blueprint of how you can improve your financial future moving you from the left side of the quadrant to the right side:
- On the left side of the quadrant we have:
- E: Employees:This applies to most people. This covers those who look for job security and value this higher than stepping out and working for themselves.
- S: Self-Employed: Most small businesses owners come into this category – exchanging time for money.
- And here’s what’s on the right side:
- B: Business-Owners:These people focus on creating a business that operates around a system that will potentially work without them being physically present.
- I: Investors: Investors are the people who make their money work for them. This is the true key to financial independence.
Kiyosaki outlines that to change quadrants requires a change of mindset and the need to commit to thinking and acting differently. He shows you the methods to do this but recognises there isn’t a magic one size fits all formula and that there may be some financial losses during the process. However, as he explains, the real reason people don’t move across quadrants is due to not being able to handle the extra work and reframing required. They can’t cope emotionally and intellectually and return back to the quadrant they feel most comfortable in – the regular job.
Kiyosaki also ascertains that most people think that achieving financial independence is a goal that is out of reach and needs start-up capital. They concentrate their efforts on finding a professional, secure job, when they could be creating their own path to financial freedom.
My main takeaway from the book was that the opportunity to create financial freedom (moving to the right side of the quadrant) has never been easier. We’re living in the information age which provides us with numerous low-cost ways to start building our financial pipeline and side hustles. You just need to find your passion, monetise it and create a system that will earn you money while you sleep.
Rating: 9/10
If you enjoyed Rich Dad, Poor Dad this is the natural follow up read. It’s filled with practical, applicable lessons and the steps to achieving financial freedom. I found the book hugely inspiring, particularly the focus on mindset and thinking and acting differently to achieve your goals.
Readability: 9.5/10
Very readable – Kiyosaki has a very easy style and a knack for explaining the complicated in a simple way.
Does what it says on the tin: 9.5/10
Yes! This book will change the way you think and act and your financial mindset if you take action!