CASHFLOW QUADRANT

By Robert Kyosaki

WHICH QUADRANT DO YOU GENERATE YOUR INCOME FROM?

            The CASHFLOW Quadrant represents the different methods by which income or money is generated.  For example, an employee (E) earns money by holding a job and working for someone else or company.  Self-employed (S)  people earn money working for themselves.  A business owner (B) owns a business that generates money, and investors (I) earn money from their various investments-in other words, money generating more money.

            Different methods of income generation requires different frames of mind.

            While money is all the same, the way it is earned can be vastly different.  If you begin to look at the four different labels for each quadrant, you might want to ask yourself, “Which quadrant do you generate the majority of your income from?”

E            B            S             I

 

YOU CAN EARN INCOME IN ALL FOUR QUADRANTS

            Most of us have the potential to generate income from all four quadrants.

Which quadrant you or I choose to earn our primary income from is not so much what we learned in school; it is more about who we are at the core-our core values, strengths, weaknesses and interests.  It is these core differences that attract us to or repel us from the four quadrants.

THE DIFFERENCE BETWEEN AN “S” TYPE OF BUSINESS AND A “B” TYPE OF BUSINESS

            Those who are true “B”s can leave their business for a year or more and return to find their business more profitable and running better than when they left it.  In a true “S” type of business, if the “S” left for a year or more, the chances are there would be no business left to return to.

              So what causes the difference?  Saying it simply, an “S” owns a job.

 A “B” owns a system and then hires competent people to operate the system.  Or put another way:  In many cases, the “S” is the system.  That is why they cannot leave.

            “B” business owners can go on vacation forever because they own a system, not a job.  If the “B” is on vacation, the money still comes in.

            To be successful as a “B” requires:

A.                 Ownership or control of systems, and

B.                 The ability to lead people.

Robert Kyosaki said, “Financial intelligence is closely linked to emotional intelligence.  In my opinion, most people suffer financially because their emotions are in control of their thoughts.”