Anyone who’s into investing and earning more from their money may have already heard of Robert Kiyosaki (don’t tell me you haven’t!). Robert was a man who wasn’t particularly good at school and who even failed in a couple of businesses, but is now a best selling author, a successful entrepreneur, and of course, a millionaire. Two of his most successful products are the book Rich Dad, Poor Dad, and the game, Cashflow 101. These products tell of how his failures molded him to become better, and what he did to attain financial freedom.
In his book, Robert talked about financial freedom and the process of getting there. He introduces the Cashflow Quadrant, which is the letters E-S-B-I divided into four quadrants. E stands for Employee, S stands for Self Employed, B stands for Business Owner and I stands for investor. According to Mr. Kiyosaki, In order to be financially free one must learn to move from the E and S quadrants to the B and I quadrants.
1. E quadrant – E stands for employee. You know who you are. Do you have a stable job with benefits? That’s exactly what the employee is after. Money is also known as hours. For example, your charge is $30 per hour, or $60 per hour. Money comes only when you work, and if you decide to take an unplanned day off, you just won’t get paid.
2. S quadrant– S stands for the self employed. These people left their corporate jobs to build their own business. Sounds great right? The problem is, they have now turned their business into another job. They work day in and day out thinking that their working at their business, when in fact they are still stuck in a job they made for themselves.
3. B quadrant – B stands for business owner. This is where we can see the difference between the S and B. The B can easily leave his business for a year to find it growing even bigger when he comes back. The B has successfully built a business system that allows him to leave his business whenever he pleases but still earn money.
4. I quadrant – I stands for investor. These people are those who just seemingly laze around doing nothing, but yet money seems to come to their hands. These people have worked hard early on in their lives, looking for the right investments that will give them money even if they don’t work another day in their life.
Just by reading the descriptions, you already know the difference between those who lie at the E,S,B or I quadrant. It’s the E and S who slave day in and day out for the rest of their lives, working hard for money. While it is the B and I who have mastered the art of having MONEY WORK FOR THEM. Just by definitions alone it’s obvious why Mr. Kiyosaki recommends that people start the shift from the E and S to the B and I.
What about you? What quadrant are you on?