Robert T. Kiyosaki - Cashflow Quadrant: guide to financial freedom

The Cashflow Quadrant is the follow-up guide to finding the financial fast track that best works for you. It reveals the strategies necessary for moving beyond just job security to greater financial security by generating wealth from four selective financial quadrants. This work will reveal why some people work less, earn more, pay less in taxes, and feel more financially secure than others. It's simply a matter of knowing which quadrant to work in.

Cashflow Quadrants

E – Employee

Most individuals only live in this area. You work for a company and trade your time for money. If you want to earn more money, you must work more hours. Another option is work for another company that pays better. With this position in the quadrant there is no passive income. If you don’t work, you don’t make any money.

S – Self Employed

This is one step better than an employee, but in reality you still are trading time for money. You own your own business, but in reality the business owns you. The positive benefit you have more personal and financial freedom than an employee.

B – Business Owner

A business implies you have a system in place. You have others working for you as employees. You aren’t selling your time for money, but rather selling a product or service. In other words, you don’t have to be working for the business to generate income.

I – Investor

This is where you truly have passive income. Investments like stocks, bonds, and real estate generate an annual cashflow. These are the investments that will allow you to retire. It can also be things like trademarks, copyrights, and royalties. Things you build once and have a long (5-10 year+) timespan in payouts.

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