The Cashflow Quadrant

The Cashflow Quadrant was used by the Rich Dad, to teach the 9 year old child, Robert Kiyosaki, how the money works. It shows a very different perspective of life, from the financial point of view. This is something nobody taught in schools. 

There are 4 types of people in the world of business or money.And in this picture are the 4 types of people, which Rich Dad called the Cashflow Quadrant.

So:

E stands for Employee

S stands for Self-employed, Small business or Specials - like a doctor or lawyer

B stands for Big Business - 500 employees or more

I stands for Investor.

The distinction is that each are 4 types of different people, with different core values and with 4 different tax laws.

E - Employee - you can always say who they are by their core values (even if the employee is the janitor, or the president of the company) - they will always say the same words: "I'm looking for a safe, secure job, with benefits". That's what makes them Employees, because their core value is security.

S - Small business owner, Self-employed - their core values will make them all use the same words: "If you want something done right, do it by yourself!". S means an also Solo.

B - Big Business or like Bill Gates - 500 employees or more - their words are different: "I'm looking for a good system, a good network and the smartest people I know to help run my business". Their unlike the S, they don't want to run the company by themselves, they want smart people to run their company for them.

I - Investor - these are people who have money to work hard for them. They will always say: "I have to find a good job for my money!"

In the Left side of the Quadrant, we have the Employees and the Self-employed. Most of people are in the left side. Sometimes people really love their job, but the world is full of fearful people doing a job that they hate and the only reason is to have a check to pay their obligations and life expenses (the rat race). It is the typical path for poor people and mid-class people. In this part of the Quadrant, these people work for security, they work for money also.

In the Right side we have the Business owners and the Investors. The real rich people are in this side. If you want to get rich and have the financial freedom that you dream of, you need to focus yourself on leaving the left side and go to the right side. It is not easy but if you are persevering and intelligent, then you can reach your goals. In most of the cases it requires you to change your mind about the money topics. Education is the clue. Their key value of they want is that they want FREEDOM. They don't want to have to work at a job anymore, they don't want to have to work for the rest of their lives.

So, the beauty of building a business and learning how to invest is very simple: this is passive income, you work hard for a few years, but possibly for the rest of your life the income keeps flowing to you.

One of the main reasons we consider a direct selling business (MLM, Network Marketing) a perfect business it's very simply because the company will work with you to get the business skills that make you rich. Always remember that is not money that makes you rich, it's business skills. And that's why it's a perfect business. They'll take as much as you like to get the skills, to make the money. That's a lifetime skill thing.

The other part about it is: The Low Start Up Cost. Where else can you get in for less than $500 USD and get these skills?

For people who want to make the shift over to the B Quadrant, which is what we recommend, one of the beauties of a network marketing company is that you can do that for a very low price. That's why we talk to people about considering the network marketing. If you'd like to build a Microsoft, it would take hundreds of millions of dollars, but a network marketing company allows you to start at a very low rate, they'll be patient with you, they'll take the time to transition in the B quadrant. And the reason why that time is so important to most people is because it take times to change their values. And the most important thing is once you take the time - let's say it takes 1 year, 2 years, 5 years, whatever the time that takes - once you've seen the values or the core values of B and I, you're unstoppable. Today, we would never go back and get a job. Why should we? We'd rather stay on the right side - build networks and companies, pay less taxes, and make more money.

The number 1 asset a person can build is build a business. That's the smartest thing you can do.

The transition from the left side of the quadrant, to the right side is not a get rich quick formula, you can't just do it over night, it takes time. When we first made that transition, in 2007, when we fully quit our job and we had to depend upon our network marketing business, that we were building, to support us. So we understand the fear. The beauty, the most important thing to remember is this - there are 2 kinds of people in the world: the types that will say: "You'll never make it!" - and we've heard lots of friends and family members saying that, "You're stupid, don't do it!" - and the second type are the people that would say: "You can do it! Go for it! Don't worry about it, we'll cover you!" - so the most important thing is support of friends and family. One of the beauties of direct selling companies is that they provide that personal support to you, for as long as it takes for you to take that journey from the left side of the quadrant to the right side.

We all know the world has changed, but, sometimes, the hardest thing to change is ourselves. That's one of the things that a direct selling business offers people - why it's the perfect business. They allow you to take your time to make the mental, emotional and physical changes required to move from the left side to the right side.

So, please remember, changes always create upset, but, sometimes, we all know we have to make those changes. And if you know, it's time for you to make that change!