Robert Kiyosaki, Rich Dad Poor Dad, Cashflow Quadrant


One of the early eye openers for me is about this book of the famous author Robert Kiyosaki entitled RICH DAD POOR DAD. This book was a huge success with millions of copies being sold worldwide. In this book, Robert Kiyosaki had two dads, one is his biological dad tagged as “poor dad” and one is his friend’s dad tagged as “rich dad.” Both dads taught Robert Kiyosaki how to reach his financial goals and achieve success but with different approaches.

His poor dad spent so much time in school earning him a doctorate degree landing on a high paying job but ended with a lot of bills left unpaid  while his rich dad did not finish school but ended up owning a business empire. How did this happen? Just look at the contrasting ideas each dad have:

His poor dad says: “I CAN’T AFFORD IT!” while his rich dad says: “HOW CAN I AFFORD IT?”

His poor dad says: “MONEY IS THE ROOT OF ALL EVIL!” while his rich dad says: “LACK OF MONEY IS THE ROOT OF ALL EVIL!”

By viewing these two contrasting ideas, his poor dad’s brain stopped working when he said those, killing his initiative and promoting negativity while his rich dad’s brain kept on thinking on ways creating initiative and promoting optimism. Which one is best? Of course, undeniably, it’s rich dad’s ideas! Here are some more comparison of Rich Dad vs. Poor Dad Thinking.

Robert Kiyosaki continued and coined the term RAT RACE. This is the race of our lifetime INCOME and SPEND. We receive our income regularly from our paychecks yet we spend the same to pay bills and satisfy our wants. We are now trapped in this rat race. We live our lives to pay our everyday bills! Now, how can we escape from this rat race trap? By understanding the The Cashflow Quadrant – Rich Dad’s Guide to Financial Freedom.
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This is understanding where our income flows. It was divided into two main sections. The left side called “Active Income” and right side called “Passive Income.” What’s the difference? Active Income says “You Work For Money” while Passive Income says “Money Works For You.”

It is then further subdivided into four quadrants. Quadrant 1 is the so-called Employees. Quadrant 2 is the so-called Self-Employed. Qudrant 3 is the so-called Big Business Owners. Quadrant 4 is the so-called Investors. Where do you belong to these four quadrants? Let’s examine it one by one:

Quadrant 1 – EMPLOYEES. I do think that most of us belongs here. We have a job. We have to work hard, follow instructions from our bosses and superiors and get paid. We don’t own our time. These are people who love security or tenure. They will work hard to climb up the corporate ladder. The higher they climbed the ladder, the higher they pay is. Sad to say, the higher their pay is, the higher also their taxes. And it’s not them getting rich, it’s their bosses, it’s their company. Time will come, they will get tired. Their body will collapse because of age. And when they stopped working, they will also stop receiving income.

Quadrant 2 – SELF EMPLOYED – They work for themselves. The difference with the employees is that self-employed own their time since they don’t have superiors. They can decide for themselves. These are people who loves to be independent. They don’t want to work for others, instead they want to work for themselves. These are doctors, lawyers, and small business owners. But still, they are an employee of themselves. And if they stopped working, they will also stop receiving income.

Quadrant 3 – BIG BUSINESS OWNERS – They love delegating tasks. They concentrate their efforts more on activities which produces most profits. They hire people who are more intelligent than them to do the work for them. They have built a solid system and they own it. They have built their resources to make this possible. And so they can leave for vacation and can leave work for some time but still earns money because there were people working for them. Examples of this are the taipans and tycoons and some franchisers who have built a solid business.

Quadrant 4 – INVESTORS – These are people who have built their assets and are not working for money anymore. Instead, the assets they have accumulated works for them providing them constant income even if they don’t work. These are people who are called “living on interests”. They are living thru the interests of their assets and investments. Money works for them. They have invested their money to have more money. They can differentiate which one is an asset and which one is a liability. Examples of these are investors in the stock market, real estate, etc.

Did you see the difference? The only way to escape from the rat race is by travelling from active income to passive income, from employee or self-employed to becoming a big business owner or investor. And this is the challenge that Robert Kiyosaki left to us readers.

As a final note, I’m leaving this quote from Mr. Kiyosaki.

The rich buy assets. The poor only have expenses. The middle class buys liabilities they think are assets. The poor and the middle class work for money. The rich have money work for them.”

Furthermore, if you want to become a millionaire like Robert Kiyosaki, I would like to refer to you on how to become a millionaire.

Also, you can visit Robert Kiyosaki’s blog here.

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Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

23 responses on “Robert Kiyosaki, Rich Dad Poor Dad, Cashflow Quadrant

  1. I have read this book years back – I read it from cover to cover and from that I was determined to know everything about financial literacy.

    • hey i am keen to know about this book.
      could you please elaborate or describe me in short.
      thank yoy

  2. Thank you for sharing this.. People especially Filipinos should start reading this book to alleviate their financial literacy/IQ. It’s an effort to teach them to become B or I. Because most of us still living in industrial age, where security and comfort is the main objective. Now that we’re living in Information age, we should know how to get out of our comfort zone. This site should be a vehicle to enrich people mind in terms of educating themselves financially. Thanks..

    Start small but DREAM and THINK BIG.

  3. Man… I haven’t read that book in a few years. Time to dust it off and read it again.

    The funny thing is that my mind set is already set to “We can’t afford it” to “How can we afford it”. Right now I’m trying to figure out how to afford how to live in another part of the country for the summer. Rather than give up I’m constantly trying to figure it out.

  4. When I first started reading Robert T. Kiyosaki, I was positively motivated about his works. But I have to say, he does write a lot of things which do not make sense, or which seem odd to me. I think his books, especially Rich Dad, Poor Dad and the Cashflow Quadrant are great motivational books, bringing the reader to think about his life and where he is heading… but his books should not be taken too seriously.

    I wrote an article about the Cashflow Quadrant just this week, which includes a bit of criticism and the key points I learned. It also includes a link to the Wall Street Journal for further reading:

    http://www.moneywise24.com/2010/08/mind-your-own-business

    Cheers,
    Aleks

  5. Kiyosaki is a good storyteller, that’s all. He will make you believe that it is easy to be rich. That’s his pitch to sell his books to millions of gullible people. I am aghast that even intellectuals fall for his investment crap.

  6. I have red books of Robert Kiyosaki in fact i call him as my rich dad right now. I’m already 37 years old working in a big company but I don’t have savings, stocks or mutual funds. I put up a business but it failed because of lack of financial and management education. If I had been able to read his books early I would be rich right now. But there is still time I plan to be financially free by age of 57, 20 years from now. Thanks for the great work you’re doing. Great Job!!!

  7. Hi Dexter, I think it’s great you tried to start up something. Failure is a great learning experience, and considering the fact that most people don’s even try, you’re already a step ahead of them. Good luck!

    Cheers,
    Alex.

  8. Dear Tyrone,

    Last time I was in Manila, I met Filipinos who were just as passionate as you are over Rich Dad Poor Dad. I was in an investment property conference at that time.

    I was born in Manila and grew up in Sydney. I’m always glad to know that my fellow countrymen has embraced the values and beliefs of those who have prosperity thinking. I wish many more Filipinos would do the same.

    One of my mission is to bring back to the Philippines many blessings that my life has offered me, and I hope to meet people like you in the process.

    Keep up the good work with your blog.

    Joel

  9. What a great book it is, I just called a friend to bring it back. Since reading kiyosaki’s books(4) I already secured my future. Thanks a lot- Makobane south Africa(Limpopo)

  10. dont I just love Robert, his books inspire me a lot. maybe because I had the poor dad experience myself. my dad used to work for a company that paid him relatively well in the 1980’s , he was a very comfortable among his peers, but he spent his money basically on buying the most expensive bikes of that time and renting the most expensive houses,buying the most expensive furnitures, which he proudly flaunted to his neighbours, what annoyes me the most is that, he was a philanthropist and all of the people he helped are now nowhere to be found.am not saying philanthropy is bad but but he was supposed to invest. infact,I just opened an account for him ladt year, imagine he did not even have a bank acche was a ount at age 62, in the year 2012, he is 63 and he doesn’t have a single investment. sometimes he finds it difficult to eat.meanwhile his friends who did not earn as much as him are now very rich. I think I love Robert because his story relates to me.

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