Robert Kiyosaki, in his bestselling book Rich Dad: Poor Dad, introduces the idea of the Cashflow Quadrant®.
The Cash Flow Quadrant is a concept and diagram that simply organizes how we generate income into 4 distinct categories. These categories are E for the employee or employee, S for the self-employed/professional who are on the left side of the quadrant and B, the leveraged business owner, and I, the sophisticated investor on the right side of the quadrant. the quadrant
Kiyosaki makes it clear that most of us must do everything we can to be on the “right side” of the quadrant if we ever aspire to be financially free. Otherwise, the probability of ever achieving true financial abundance is too slim if we stick to the left side of the quadrant.
Interestingly, we can choose which section and side of the quadrant we ultimately want to end up on if we are aware of them. Our choice largely depends on how “wired” we are, our temperament, and our level of drive and ambition.
Whatever you do, you can choose to do it in the section of your choice. For example, suppose you are a Chinese (ie Mandarin) translator.
If you are in this section of the quadrant, you could:
me – Work for a company where you are an employee translating and working with Chinese customers and clients. He likes the comfort of being told what his next task is and what he will do. Financial definition: You are trading time for money and charging what the JOB is worth.
S – Be a freelance translator for hire where you would translate materials, correspondence and conversations between Chinese and American clients. You’re the best, so you do the translation because you think it’s too risky to have someone else do the translation for you. Financial definition: You are trading time for money and getting paid what YOU are worth, but restricted by YOU and your available time is maxed out by 24 hours.
B. – Starting a small business or company that provides a variety of services to companies or entities seeking to work in China or who are Chinese or speak Chinese. Language and document translation may be your core services, but you have many other translators and support team members working for you who allow your business to continue generating revenue and growing even when you’re not around. Financial definition: You are leveraging people’s skills and time and creating a synergy between their skills and their time that can provide you with unlimited income, but may still require some of your time.
me – Take the income you’ve produced in the A quadrant or now in the B quadrant and start investing in both active and passive investment opportunities. Many of these opportunities may have been made available through the relationships created through your activities in S or B. The key here is that your financial assets are now invested to produce more financial income (and therefore more assets). for you and your estate. Financial definition: You are leveraging your own money to create other income-producing financial assets that allow you to purchase even more income-producing assets. When you have enough assets, you can do absolutely nothing or anything you want and can afford to do… best of all, more and more money keeps coming in.
So you can clearly see that a person can take their skill and/or passion and choose to use it in any of the four sections of the quadrant, but if they want to be truly financially free, their goal and focus should be to get to me quadrant as soon as you can work up to that level. There is no more direct way to do this than to start a home business. When you consider the low cost of entry, the many legitimate opportunities available, and the US tax code written to provide tax savings for home-based business owners who might pay some, if not all, of their start-up expenses, You just can’t beat starting a home based business. business.
I have been lucky enough to have earned millions in personal income by starting my own small business in the S quadrant (Network marketing is one of the few S businesses where you get all the upside leverage and 7-figure income potential without the time-wasting and financial risk associated with most S business.) and I have had the joy of participating actively in the me quadrant, but there are some important things I’ve learned along the way that I’d like to share with you.
- Moving into the S and I quadrants is a process. There is an old entrepreneur maximum That goes like this. In the first days you work a lot and they pay you little, so in the last days they pay you a lot and you work little.
- God’s delays are not God’s denials. He doesn’t make the mistake and doesn’t see the important value in delays in HIS time. What you’ll usually find in hindsight is that if you had gotten it when you wanted it, you wouldn’t know what to do with it. This is hard to “buy” while feeling retarded, but it’s the truth. Revel in your delays. Remember that God is ALWAYS ON TIME!
- You have to invest to be an investor. Don’t be afraid of losing… especially money. If you do your best and learn from your losses, you will eventually start winning. Losing is part of the process of winning. The fear disappears when you realize this and are diligent and energetic in your learning and preparation. Once you get into the practice of winning… you will get better at winning and continue to win… God willing.
- A road map is good, an experienced guide is better. Always look to find a mentor who has gone where you are going, who has done it in the style you want to emulate and TODAY is where you finally want to “pass” to fulfill your created intention. Mentors are out there and the good ones love to share…don’t be afraid to pay the price they ask you to pay.
- The faster you make mistakes, the FASTER you will succeed. In other words, if you want to succeed quickly… double your failure rate.
- Learn to manage your time. You can ALWAYS replace your money, but you can never replace your time. You might be interested to know that I’ve written an ezine article on something I call the Six List, a quick and easy way to manage your time efficiently.
- The last thing BUT the most important thing is confidence in yourself… SECOND. Trust in God… FIRST. You will fall short from time to time, you will be disappointed and you will just make stupid mistakes. However, and listen to this… GOD IS NEVER WRONG, HE IS ALWAYS ON TIME, TOTALLY RELIABLE AND WILL NEVER FAIL YOU. It may seem that this sentence above is not the case if you take a page from his life story and read ONLY that page. However, if you are going to read the entire book that is your life or even review the chapters that you have already lived, if you look closely you will see that the previous prize is absolute.
Your challenge this week is:
- Identify where you are on the cash flow quadrant. Ask yourself where you are ultimately committing to go and why.
- Read my 7 foolproof guidelines above and ask yourself which of the 7 you already buy. Then ask yourself what you might need to learn, see, or believe in order to buy from others.
*CASHFLOW, ESBI and the Cash Flow Quadrant Diagram are registered trademarks of Cashflow Technologies, Inc.