Robert Kiyosaki’s cash flow quadrant is a simple concept and easy to understand. I'm excited to share with you his formula that has transformed my world. Every decision in my life and in my businesses going forward will be influenced by the information that I am about to share with you here.
The Errors of the School System
Most of us are programmed to finish school, go find a safe secure job with a steady pay check and benefits. Robert Kiyosaki talks about the errors in this way of schooling. He has developed the cash flow quadrant to give us a better understanding of this flaw in the system.
E – Employed
- You exchange time and effort for income.
- If you don’t work, you don’t get paid.
- When you get paid, the government has already taken a sizeable chunk.
- The harder you work, the more money you make, the more the government takes away from you.
S – Self Employed, Small Business Owner or Specialist
- Professionals, doctors, attorneys, lawyers, accountants.
- You earn larger amounts of money but still swap time for money.
- Your business cannot function without you.
- If you take a significant break, your business collapses.
- You pay the most in taxes.
B – Big Business
- You have people working hard for you to generate you an income
- You can make a lot more money and pay a small percentage of tax legally
I – Investor
- You have money working hard for you
- You can make millions of dollars and pay zero percent in taxes legally!
Struggling To Get Ahead
Most of us are encouraged to study and work towards the E and S side of this quadrant. The huge problem with this is that the people in this side of the quadrant pay the most in taxes.
No matter how hard you try to get ahead, it doesn’t work, the more hours you work, the more pay you get, the more taxes you pay.
Transitioning to the B and I Quadrant
I was an employee for the majority of my career but most recently I have transitioned to the S quadrant. I have my own clinic as a Kinesiologist. I'm self employed, working for myself but in essence if I do not have clients, I don’t get paid. If I take holidays, I don’t get paid.
I'm still swapping my time for money, even though I am self employed, in essence I OWN a job.
Passive Income Streams
The great news about business in the 21st century is that iit is more possible than ever before to make that transition from the E and the S to the B and the I side.
Robert Kiyosaki talks about the power of network marketing, how with little start up you can begin to build a business that in time can help you generate passive income.
If you do your own research you will soon discover that there are so many opportunities out there now, many of which can help you make that transition for yourself.
I am in the process of transitioning from the S to the B quadrant by building a business in the Digital Economy. In time my business will be able to function without my presence and I will have that passive income.
Robert Kiyosaki suggests that once you are in B quadrant, and once you have cash flow from that business the best thing to do is to start investing in the I quadrant. Professional Investers in the I quadrant are the people who pay the very least in taxes!
Do Your Research
There is so much information out there online today, do your homework, begin educating yourself financially, begin making smarter choices today for a better tomorrow. And most importantly remember to follow your heart and do something you love, it's the only way to true fulfillment.
I hope you found this article useful. Get in touch if you have any questions or queries, I always love connecting with like minded people.
Have a great day,