In this blog, we will know about the Cashflow Quadrant, which Robert T Kiyosaki wrote in the book. Robert T Kiyosaki is an American businessman, author. He has written an excellent book on money management. Many people have liked books like Rich Dad Poor Dad, Rich Dad’s Cashflow Quadrant, and have sold a lot in the market. Robert Kiyosaki’s topic of Cashflow Quadrant has been written in his book about economic freedom and those who want to change their Quadrant, And it has a perfect description of the quadrant graph.
Types Of Cashflow Quadrant:
There are four types of Cashflow Quadrant, which is E, S, B, and I. There are different types of people in these four quadrants. You will also know which quadrant do you come in after reading this. Below you can read rich dad quadrants.
First is E Quadrant :
In this Quadrant, E is described as an employee. People who work for others, work in a company. The owner of a company, hire trained people (employees) to grow their business. As long as the people of this quadrant work, then only they get paid.
The jobs in the E quadrant are not secure, so E quadrant people are at risk of losing jobs. They can be terminated from the job due to any reason. They earn from the salary of the month. It includes CEOs to Peon, but common is fixed income.
Second is S Quadrant:
S Quadrant stands for Self Employed. You will be able to see most of the educated specialists, Like doctors, lawyers, experts in anything, and they do not work for others. They work for themselves mostly by mastering something. S Quadrant people’s, mostly as long as they work, only then these people get money. They never think that their income depends on someone else.
Third is B Quadrant:
People in business come in this quadrant; they also are known as Businessmen. People with this B quadrant make a system. In which many people work them. They lead people by creating a network. Most people with B quadrants think that if someone does a better work than them, then why do they work themselves. It takes a lot of trouble to build a good system first. So that even if these people go away for a month, they still make a good income.
Fourth is I Quadrant:
I Stands for Investor. This Quadrant consists of people who make money from money, and their capital works for them. I quadrant does a lot of analysis before investing. They invest their money in stocks, bonds, mutual funds, real estate, and golds, etc. This Quadrant does not matter that you earn money from where. If you want to become rich, then you can join I Quadrant with good knowledge of finance.
You can get financial freedom from any of these four quadrants. But you can get financial freedom sooner in B or I quadrants.
Types of Incomes:
You know what kind of quadrants are there. Now we see a concept of types of income. There are two types of income. And they are known as Active Income and Passive Income. This income can come from any source, such as job, business or self-work. It is a different way of earning both types of income, so let’s know.
In passive income, you create a system for which you work hard while creating the system and after some time, that system generates money for you. The system generates money for you, for which you do not need to stay connected with the system for the whole time. For example, even if you go for a holiday for a month, your system will continue to make money for you.
Only two percent of people understand the passive income, and those who understand they can be seen in the list of a millionaire. You can see passive income in the B and I quadrants.
In this category, peoples will only get income as long as they keep working. But if they are unable to work due to any reason, then they will not get income at that time or the specific period. Most of the Active income category does not get that much freedom, so most work has to be connected to income. If a person goes on a holiday for the month, then that person will not get income as they get in passive income. For Active Income, you have to connect with your income source mostly.
You can see active income in E and S quadrants. And you can see Employee and Self Employee in the Active Income category.
You can get income from all four quadrants, but if you come to B and I, then you can get financial freedom in a sooner than E and S quadrant. If you generate your income from E or S quadrant, then you can invest your income in the I quadrant. I quadrant will help you in increasing your wealth. If you want to go in the I quadrant, then you need to know about finance. Otherwise, you can hire an excellent personal finance manager to help you in the I quadrant.
Income is generates with B and I quadrants but it takes some time for the generating income. So it is important to have patience in the beginning.
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