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Rich Dad's Cashflow Quadrant Book Summary

The document summarizes Robert Kiyosaki's 'Rich Dad's Cashflow Quadrant', which outlines four income-generating categories: Employee (E), Self-Employed (S), Business (B), and Investor (I). Each quadrant represents different approaches to financial freedom and reflects individual values and behaviors. The text emphasizes the importance of understanding these quadrants to achieve financial success and highlights the average financial script that often leads to debt and job dependency.
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0% found this document useful (0 votes)
2K views1 page

Rich Dad's Cashflow Quadrant Book Summary

The document summarizes Robert Kiyosaki's 'Rich Dad's Cashflow Quadrant', which outlines four income-generating categories: Employee (E), Self-Employed (S), Business (B), and Investor (I). Each quadrant represents different approaches to financial freedom and reflects individual values and behaviors. The text emphasizes the importance of understanding these quadrants to achieve financial success and highlights the average financial script that often leads to debt and job dependency.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Rich Dad's Cashflow


Quadrant by Robert
Kiyosaki: Book Summary
An Employee (E) works for the system. A Self-Employed (S) is the system. A
Business (B) controls the system. An Investor (I) invests money into the
system.

Justin Chau
25 Aug 2023 • 3 min read

Rich Dad's Cashflow Quadrant is a guide to financial freedom—the second


book of the Rich Dad Poor Dad Series. The Cashflow Quadrant represents
the different methods in which people generate income; they reflect our
values, strengths, weaknesses, and interests.

淘寶年貨節焕新,⼀淘即

新年必備健康禮盒,送禮堅果、茶品、
糖果都有

taobao 立即購買

The ESBI Quadrant


An Employee (E) works for the system.

A Self-Employed (S) is the system.

A Business (B) controls the system.

An Investor (I) invests money into the system.

Changing quadrants if often a change at a the core of who you are.

E-Quadrant

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Looks for a safe, secure job with a good pay and excellent benefits (a
defined and assured extra compensation).

Responds to Fear by seeking security.

Certainty makes them people.

Security > Money.

Employees make their bosses and owners rich.

Debtors make banks and money lenders rich.

Taxpayers make the government rich.

Consumers make many others businesses rich.

S-Quadrant

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新年必備健康禮盒,送禮堅果、茶品、
糖果都有

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Works at a fixed rate per hour.

Enjoys being their own boss.

Hard-core perfectionists.

Expects to get paid for their hard work.

Responds to Fear by taking control of the situation.

Well-educated professionals (e.g. Doctors, Lawyers, Dentists).

Sells their businesses at their peak.

Finds it difficult to delegate because “no one else can do it as good


in my way”.

Respect > Money.

Success means more hard work.

Tell them what you want done and leave them alone to do it.

B-Quadrant

淘寶年貨節焕新,⼀淘即

新年必備健康禮盒,送禮堅果、茶品、
糖果都有

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Surrounds themselves with smart people from all four categories: E, S,


B, I.

Likes to delegate.

“Why do it yourself when you can hire someone to do it for you,


and they can do it better?”

Ownership and control of systems:

OPT—Other People’s Time.

OPM—Other People’s Money.

Ability to bring the best in people.

Your advisors can only be as smart as you are.

Have a strong mentor program.

Develop a business opportunity you can succeed with, believe in, and
share confidently with others.

Success means increasing the system and hiring more people.

I-Quadrant

淘寶年貨節焕新,⼀淘即

新年必備健康禮盒,送禮堅果、茶品、
糖果都有

taobao 立即購買

I’s invest in B’s.

Three Types of Investors:

Type A: Seek problems.

Type B: Seek answers.

Type C: Seek an “expert” to tell them what to do.

Five Levels of Investors:

Level One: Everything the person buys depreciates in value.

Level Two: Savers.

Level Three: “Too Busy” to invest in financial education.

Level Four: Do-it-yourself investor.

Level Five: Business owner investing in I quadrant.

The Average Financial Script


1. The child goes to school, graduates, finds a job, and has money to
spend

2. The young adult now can afford to rent an apartment, buy electronics,
new clothes, a car, and soon the bill begins to come in.

3. One day, the adult meets someone special. They fall in love and get
married. For a while, life is blissful because two can live as cheaply as
one.

4. They save up and buy the dream of all young couples—their own
home.

5. They find a house, pull their money out of savings and use it for a down
payment. Now they have a mortgage.

6. Life is wonderful and throw a party to have all their friends over to see
their new house, new car, new furniture, and new toys. They’re deeply
in debt, but then the first child arrives.

7. After dropping the child off at nursery school this average couple must
now put their nose to the grindstone and go to work. They become
trapped by the need for job security because, on average, they’re less
than 3 months away from financial bankruptcy.

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Rich Dad's Cashflow Quadrant


By Robert Kiyosaki

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