![]() ![]() Traditional thinking says E category jobs are stable because they offer steady income and a clear job description. Kiyosaki says employees choose the E category because they value security and certainty. In the E category, employees generate income by agreeing to do work in exchange for a salary. That job is usually in the Employee (E) or Self-employed (S) category. Traditional wisdom tells us to go to college to get a stable “good job” that will pay enough for a comfortable life and provide retirement benefits. The E and S Categories: The Traditional Path You can, and in many cases should, generate income in multiple categories. The way you generate income defines your category, not what you do to earn it. Kiyosaki’s “cashflow quadrants” represent four ways of generating income. ![]() Some of this difference between “financial freedom” and “financial independence” is semantic, but it’s useful to know what these terms are most likely referring to when you hear them. In contrast, financial independence only means that your passive income is greater than your expenses, so you can be financially independent with much less wealth. ![]() When Kiyosaki talks about financial freedom, he’s usually talking about capitalist-level wealth. In contrast to Kiyosaki’s focus on financial freedom, most of the personal-finance community stresses the importance of “financial independence.” This is the point at which your passive income can pay for all your expenses and you no longer have to work. The best outcome, to Kiyosaki, is financial freedom, the point at which you never need to work again and can afford to do just about whatever you want.įinancial Freedom vs. Kiyosaki wants you to surpass both job security, where you have a job that you can live and rely on, and achieve financial security, where concerns about money don’t dictate the way you live. And the more money you have, the more money you have to spend doing what it is you want to do. To Kiyosaki, money is time, and time is freedom: The more money you have, the less time you have to spend working for it. Rich Dad’s Cashflow Quadrant is about how to generate wealth, but Kiyosaki starts by explaining why you should prioritize wealth in the first place. ![]() Kiyosaki wrote this book for people who are, as the saying goes, tired of working hard for their money, and not letting their money work for them. Rich Dad’s Cashflow Quadrant is about moving from the E and S categories to the B and I categories, or at least adding I income to existing E or S income. The other two categories, big business owners (B) and investors (I), are the most conducive to accumulating wealth because those are the categories in which you can develop passive income in the form of assets. The self-employed and small business owners (S)Īccording to Kiyosaki, the first two income categories, employees (E) and the self-employed and small business owners (S), are usually dead-ends on the road to wealth.He divides income into four categories, which he calls “cashflow quadrants”: But according to Kiyosaki, the type of income you generate is more important than the type of work you do. Most people believe that the key to wealth is getting a “good,” high-paying job. Finally, we’ll detail his advice for achieving financial freedom through asset development. In this guide, we’ll start by discussing why wealth is so important, then explore Kiyosaki’s reasons for rejecting the traditional path to achieving it. The downside to that, and perhaps the most common critique of the Rich Dad series, is that the books can lack convincing supporting evidence. By Kiyosaki’s own admission, the books are less a step-by-step guide to achieving wealth than a readable, engaging rundown of the core concepts and values about money Kiyosaki says you need to rethink. The books also have their fair share of critics. Many readers credit them with waking them up to the concept of passive income. The Rich Dad books have appealed to millions. Kiyosaki uses the concept of four “cashflow quadrants” to emphasize that it’s not what you do that makes the difference between achieving financial freedom and being stuck in a cycle of job dependency, but what kind of income you earn. The central principles in Rich Dad’s Cashflow Quadrant and Rich Dad, Poor Dad are the same: The best way to achieve wealth is to eschew security and working hard at a “good job” in favor of cultivating boldness and developing assets that will generate passive income. Rich Dad’s Cashflow Quadrant is the sequel to Robert Kiyosaki’s international bestseller, Rich Dad, Poor Dad. 1-Page Summary 1-Page Book Summary of Rich Dad's Cashflow Quadrant ![]()
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