Following our introduction to the Cashflow Quadrant we are now going to get into more detail of each of the quadrants. Keep in mind that no one quadrant is better than the other. However, it’s essential to understand where you are in the quadrant so that you know how best to achieve your financial objectives. It doesn’t take a rocket scientist to understand that people need to take control of their financial futures in these difficult times. That responsibility cannot be assigned to anyone else otherwise it will result in disappointment and distress.
The first, and most common, quadrant is the E or Employee quadrant. This is where you find the majority of the population. Consider the following pattern:
- You get up at 5am in the morning,
- Take a shower or bath,
- Have breakfast (that’s if you have the time)
- Spend about an hour in traffic on your way to work
- Begin work at 8am (following your boss’ instructions)
- Lunch break at 1pm
- Resume work at 2pm until 5pm, in some cases you work overtime until late
- Get home and you’re tired, have supper and go to bed
The following day you go through the same cycle for at least 5 days a week. With the economic hardships we are experiencing employees will also put in extra shifts on the weekends in many cases depending on the nature of the job. That cycle is commonly known as the Rat Race.
At the end of each month or week employees get paid their wages or salaries for their work. In order to keep getting paid employees will remain in the Rat Race that’s why they follow the pattern illustrated above. In simple terms employees exchange their time to the employer for money. When they stop working they cease to get paid.
Even though people in this quadrant don’t enjoy this pattern they find themselves remaining faithful and diligent to it just to make ends meet, to get their pay check at the end of each month. It is so ingrained in their minds that some of them will go through this cycle until well into retirement age in their 50s and 60s.
The few benefits that you get in this quadrant are 2 weeks vacation annually (if you are fortunate that is) and accumulating leave days every month that you can make use of when you need them. The lifestyle of people in the E-quadrant is really monotonous. There’s rarely anything new to look forward to because every year plays out the same script over and over again. Some people really don’t mind but for most people it’s very frustrating.
My guess is that the majority of you reading this are employees. What are your experiences like as an employee? Feel free to share in the comments below. The quadrants don’t only illustrate a difference in methods of operation. At the core they represent differences in mindset. In the next article we’ll get into the mindset of employees in the E quadrant. Until next time,
Be all you can be!