I was very fortunate to come across an amazing book called, “Rich Dad, Poor Dad“ soon after high school. From that young age I understood very quickly the importance of having financial goals that would enable me to live the life of my dreams. That book was written by Robert Kiyosaki, a world renowned financial expert who teaches millions of people around the world how to become financially free and have the ability to live the life of their dreams.
He’s authored numerous books ever since and by following his advice I’ve had success in my own life. In one of his books, The Cashflow Quadrant, he illustrates the basic ways that all of us make money as mentioned in the previous article. Understanding where you are in the quadrant is an important first step to determine how to get to where you desire to get to. The picture below illustrates the characteristics of each of the quadrants.
The key difference is that people that reside on the left side of the quadrant exchange time for money while people on the right do not necessarily have to work in order to make money. That was quite an interesting observation when I first learned this information.
The Word of God says in Hosea 4:6,
“My people are destroyed for lack of knowledge. Because you have rejected knowledge, I will also reject you from being priest for Me; Because you have forgotten the law of your God, I will also forget your children.”
You cannot afford to be passive when it comes to your personal finances especially in these times of uncertainty all around the world. Learning what the cashflow quadrant represents and understanding what it means is a good starting point for you to determine the best way to achieve your financial ambitions.
Looking at the image above, the left side of the quadrant represents people that exchange their time for money as we have already pointed out. The right side of the quadrant represents people that use leverage of their systems or investments to make money without having to exchange their time for it. That is a really high level summary of what the cashflow quadrant is about.
In other posts I expand on each of those quadrants to give more detail that will help you determine the best route to achieve your financial objectives. Having the right knowledge and understanding will help you make the right decisions.
It’s important to keep in mind that no one quadrant is better than the other. It comes down to what is suitable for you so we are going to give a breakdown of the characteristics of each of the four quadrants and how to be successful in those quadrants.
In which quadrant do you reside? Which quadrant do you want to reside in? With what you are currently doing are you moving towards your desired destination? The answers to those questions will be found in the next articles. Feel free to share your views and comments as well as to share this article with your friends using the social media buttons on the page. Until next time,
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