Rich Dad’s Cashflow Quadrant summary

When Robert Kiyosaki was growing up in Hawaii, he had two father figures. One was his biological dad, who worked for the government. The other was his friend Mike’s dad, a self-made businessman and investor.

He came to know them, respectively, as his poor dad and his rich dad. As he observed their lives, he began to learn fundamental lessons about work and money.

One day, while the author was at Mike’s house, his “rich dad” sat him down and told him a story. In many ways, it was the beginning of his financial education.

Kiyosaki didn’t know it then, but this story would explain the essential difference between those in the E and S quadrants, and those in the B and I quadrants.

Today, we live in what is roughly defined as the “Information Age.” This age began around 1991. It marked the end of the “Industrial Age,” as new technologies allowed companies to move their money around the world at lightning speed.

It was also the beginning of the end for secure, unionized jobs and good government pensions. But many of us still haven’t adapted to the times.

From listening to his “rich dad”, Kiyosaki learned about the core differences between people in the different quadrants. He realized that their personality types were fundamentally different in their relation to work and money.

The key message here is: The four quadrants attract different types of people.

If you're reading these blinks, you're probably interested in financial freedom. And who isn't? It means having the time to do what you love – whether that’s traveling the world, collecting art, or scuba diving with manta rays.

But how do you reach that point? Well, if you look at how many of the very wealthy have lived, you’ll see that they’ve taken a similar route.

For most people, becoming an investor is a daunting prospect. It feels like learning to surf at a beach known for its tiger sharks. However, with a bit of education, a novice can become a confident investor.

So what separates a beginner from, say, Warren Buffet?

We’re not always rational. Sometimes, the “irrational” is what makes us human, like when we fall in love. However, with money, our irrationality can be a real problem.

The key message here is: Money provokes irrational feelings which we must overcome.

Most of us know the saying “A journey of a thousand miles begins with a single step.” Well, when we’re talking about money, it’s better to say “A journey of a thousand miles begins with a baby step.”

To achieve financial freedom means embarking on a long journey. So, you should be wary of trying to get rich in the short-term. The truth is, nobody became rich and, crucially, stayed rich, through purely short-term thinking. These days, we’re surrounded by Get Rich Quick schemes – those endless courses and books that promise immediate wealth. Many of them sound wonderful. But in reality, the only person they’re going to make rich is the person selling them. And the person selling them very often took a long time to accrue their wealth.