#4 cashflow quadrant series#

And the truth is it’s easier than ever today to launch a business and achieve financial success. There are many ways to excel at entrepreneurship. The business does this for you think about how rich Microsoft made Bill Gates. As the owner of your own business, you don’t have to be actively involved in the day-to-day operations to make money. Business ownerīusiness owners create a system that generates money and hire people to work for them. This side, Kiyosaki says in the Rich Dad’s guide, pays the least in taxes, maximizes the tax code, and creates assets that produce a continuous cash flow. On this side of the quadrant, your money works for you.

The right side of the quadrant deals with passive income. If you stop working, the business stops making money. Somebody’s got to clean teeth and fill cavities! So, in a sense, even if you own a business, you’re still employed. Think about a dentist with her own practice. However, your business actually owns you because you’re still working and therefore trading time for money. Self-employed individuals are business owners. Making more money typically involves switching jobs or getting a raise or promotion. The only way employees make money is through active work. EmployeeĮmployees work for companies and exchange their time and skills for a paycheck. In other words, you have to consistently work to cover your basic living expenses.Īs Kiyosaki points out, the left side pays the highest tax rates and trades their time for money. The left side of the quadrants is active income. Kiyosaki asserts there are four main areas of the quadrant you can fall into. Kiyosaki’s book “Cashflow Quadrant” outlines why some people work less and earn more and, by doing so, are able to attain financial freedom.

#4 cashflow quadrant series#

The concept is the brainchild of author Robert Kiyosaki, who created the bestselling Rich Dad, Poor Dad series of books that are filled with financial advice. The cashflow quadrant is a chart that describes the four main options for making money. In This Article What is the cashflow quadrant? Let’s take a closer look at this revolutionary idea. But one thing that may help you get there is the cashflow quadrant. Unfortunately, this won’t happen overnight you’ll need to take baby steps to make it happen. It’s time to reignite your career and realize your true potential. The world has changed drastically over the last decade, and the workforce is still catching up to the idea that it’s better to forge your own path and rely on yourself for making money. Yet the traditional work model no longer provides as much stability as it once did, and it’s outdated. Most people think Phil’s way is the safe way. What’s interesting is that most workers learn Phil’s approach to personal finance, going to school for four years, getting a job, and spending 40 years in the workforce working for other people’s companies.

And soon, thanks to her hard work, she’ll be in a position to let her side hustles start earning her a solid full-time income.įor many reasons, Amber is in a much stronger position than Phil, who better get his act together if he hopes to retire within the next 30 years. Right now, Amber is already making more money than Phil. But she has three sources of income, including two growing side hustles that could quickly turn into bona fide small businesses in the near future. Amber is the same age as Phil, and they’re both middle class. He works for someone else, making their company money all day with his hard work, and consistently goes above and beyond for the organization. Phil is pushing 40 and entirely dependent on his full-time accounting job for survival.