A few years ago, I came across Robert Kiyosaki’s book – the Cashflow Quadrant.
The “Rich Dad’s Cashflow Quadrant” is a book that describes the difference ways people can make money. As you can see in the following diagram of the cashflow quadrant, the E and B are on the left side and the B and I are on the right side.
So, what do the E, S, B and I letters mean?
The E, S, B and I of the Cashflow Quadrant are –
- E – employee,
- S – Self-employed,
- B – Business owner, and
- I – Investor.
The methods by which money is generated in each quadrant is different. For example –
- E – is where an employee earns money by having a job or working for someone else,
- S – where self-employed people earn money working for themselves,
- B – business owners run a business that generates money, and
- I – investors earn money from various investments (i.e. money generating more money).
Where do you sit in each of these quadrants?
A Few Tips to Remember…
After looking at each these quadrants, there are a few points to remember –
- You can earn money in each of the quadrants (as the same person can generate money in each of the four quadrants). The point is where you “generate income from”.
- You can be rich and poor in each of the four quadrants.
- Not all quadrants are equal, however you have to decide what is best for you.
- One quadrant is not better than the other, each has different strengths and weaknesses.
Reference –
Kiyosaki, R. (1998). Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom. USA: TechPress, Inc.
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