Rich Dad’s Cashflow Quadrant Book Summary - Rich Dad’s Cashflow Quadrant Book explained in key points
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Rich Dad’s Cashflow Quadrant summary

Robert T. Kiyosaki with Sharon L. Lechter

Guide to Financial Freedom

4.6 (741 ratings)
26 mins

Brief summary

Rich Dad's Cashflow Quadrant by Robert T. Kiyosaki is a finance book that provides a clear understanding of money and its flow, with practical steps to move from being an employee to becoming an investor.

Table of Contents

    Rich Dad’s Cashflow Quadrant
    Summary of 9 key ideas

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    Key idea 1 of 9

    The different ways in which we earn money can be divided into four quadrants.

    Let’s imagine you drew a simple ‘plus’ sign on a piece of paper. What do you see? Two lines – one horizontal and one vertical, right? These lines divide four white spaces. And those four spaces are called quadrants.

    The key message here is: The different ways in which we earn money can be divided into four quadrants.

    So what are these four quadrants? They're each labeled with a letter: E, S, B and I. On the left-hand side of the plus sign are the E and S quadrants. The E stands for “employee” and the S for “small business or self-employed.” And on the right-hand side, we have the B and I quadrants. The B stands for “big business owner” and the I for “investor.”

    Now, depending on how you make your living, you belong to one of these four quadrants.

    Over your lifetime, you might earn money from just one, a couple, or all of these quadrants. Take the example of a medical doctor, working in the United States today. She could decide to earn a living as an E (an employee). She can do that by joining the staff of a large hospital or insurance company, working for the government in public health, or becoming a military doctor. In other words, by taking a nine-to-five job.

    That same doctor could also choose to be an S (self-employed) and start a private practice. She would set up an office, hire staff, and build a private list of patients. It’s still hard work, but she’d have more control.

    As a third option, this doctor could decide to become a B (big business owner). She could own her own clinic and hire other doctors. In that case, she’d probably employ someone else – a business manager – to run the organization. So, she’d own the clinic but not have to work in it herself. On the other hand, she could continue as a working medical professional and own a business that’s unrelated to medicine.

    As a high-earning doctor, she’d probably have investable income, too. So, while practicing medicine, running her clinic, or overseeing her business, she could also become an I (investor). She could do that by investing in shares or property.

    So far, so simple, right? This is the basic structure of our society. All of these quadrants require different capabilities and personal characteristics. Some people find their place in life and are happy in whichever quadrant they end up in – there is no “right” or “wrong” choice.

    But what if you want to be financially free? What if you want to escape the world of work and drudgery? Then you’ll need to move from the E and S quadrants into the B and I quadrants. In short, from working to owning. We’ll see why in the next blink.

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    What is Rich Dad’s Cashflow Quadrant about?

    Rich Dad’s Cashflow Quadrant (1998) is a guide to financial freedom. In the second book of the Rich Dad Poor Dad series, authors Robert T. Kiyosaki and Sharon L. Lechter describe how some people achieve financial success without working as hard as the rest of us. In this blend of instruction and autobiography, they explain how you might have the wrong idea about attaining financial freedom and set out ways in which you can turn that around.

    Rich Dad’s Cashflow Quadrant Review

    Rich Dad’s Cashflow Quadrant (1998) is a book that challenges the conventional mindset surrounding money and offers a fresh perspective on financial independence. Here's why this book is worth reading:

    • It presents a clear framework, the Cashflow Quadrant, which categorizes people into four quadrants based on their approach to generating income.
    • The book offers practical strategies for transitioning from the left side of the quadrant (employee or small business owner) to the right side (investor or big business owner).
    • With personal stories and thought-provoking insights, it provides readers with the tools and motivation to take control of their financial future.

    Best quote from Rich Dad’s Cashflow Quadrant

    My educated dad was a voracious reader of books, so he was word-smart, but he was not financially literate.

    —Robert T. Kiyosaki with Sharon L. Lechter
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    Who should read Rich Dad’s Cashflow Quadrant?

    • Anyone looking to escape the nine-to-five slog
    • Warren Buffet and Bill Gates wannabes
    • Those with dreams bigger than their wallets

    About the Author

    Robert T. Kiyosaki is the best-selling author of Rich Dad, Poor Dad. He’s the founder of Rich Global LLC and the Rich Dad Company, an education company that provides personal finance and business education through books and videos. He’s also an investor and radio personality.

    Sharon Lechter is an American businesswoman and leader dedicated to improving the financial education of teens and young adults. She’s a spokesperson for the National CPA Financial Literacy Commission; the founder of the financial education organization, Pay Your Family First; and a creator of Thrive Time for Teens, an award-winning financial board game.

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    Rich Dad’s Cashflow Quadrant FAQs 

    What is the main message of Rich Dad’s Cashflow Quadrant?

    Discover how to shift from being an employee or self-employed to becoming a business owner or investor.

    How long does it take to read Rich Dad’s Cashflow Quadrant?

    Reading time for Rich Dad’s Cashflow Quadrant varies. The Blinkist summary can be read in just 15 minutes.

    Is Rich Dad’s Cashflow Quadrant a good book? Is it worth reading?

    Rich Dad’s Cashflow Quadrant is worth reading as it provides valuable insights into achieving financial independence.

    Who is the author of Rich Dad’s Cashflow Quadrant?

    Robert T. Kiyosaki with Sharon L. Lechter.

    What to read after Rich Dad’s Cashflow Quadrant?

    If you're wondering what to read next after Rich Dad’s Cashflow Quadrant, here are some recommendations we suggest:
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