Cashflow Quadrant
The Cashflow Quadrant, a trademark of Cashflow Technologies, Inc., first appeared in the Cashflow Quadrant book by Robert Kiyosaki. The letters in the quadrant simply represent the quadrant from which a person generates income.
E stands for Employee
S stands for Self-Employed or Small Business Owner
B stands for Business Owner
I stands for Investor
The E quadrant
What I learned in school made me a professional in the “E” (employee) quadrant.
I felt secure here with a regular paycheck, bonuses, and other benefits, but after many years, I also felt like I was running an endless race. One day, I’d finish a task or two, but there would always be new tasks the next day. I chase deadline after deadline; work never seems to end.
I found out that this is the reality of a person working for someone else. There’s always someone higher than you who gives directions and dictates your pay.
The S quadrant
I am also in the “S” quadrant as a financial planner. “S” (self-employed or small business owner) quadrant people are professionals who are their own boss like doctors, lawyers, or accountants, or small business owners like consultants, restaurant owners, travel agents, carpenters, hair stylists, etc.
“S” quadrant people can dictate their income with the work that they put in.
A downside to this quadrant is that the more successful you become, the less time you will have because you are the boss and the expert who knows your thing.
I took this path to learn skills which may also be used to continue building my business, which brings me to the next two quadrants.
The B-I quadrants
Robert Kiyosaki said, “If you want to be rich, you need to be a business owner and an investor.”
The “B” (business owner) quadrant is where you own a system and people work for you. A true “B” can leave their business for a year or more and find it more profitable than when they left it.
On the other hand, if you leave an “S” business for a year or more, chances are there will be no business to return to.
The “I” (investor) quadrant is where your money works for you. You don’t necessarily have to work in this quadrant. How great it would be if we could just jump to this one quadrant in a snap of a finger and not have to work anymore, right?
Income potential is unlimited on the B-I side, whereas time and therefore earning potential also are limited on the E-S side.
Paying the Price
Even though a lot of people would love to have their own “B” quadrant business and have money working for them ‘round the clock in the “I” quadrant, it doesn’t happen that easy in reality.
Why?
This is because traditional schools train us for the left side of the quadrant (E-S), where we work hard for money. Success in the E-S quadrant does not automatically mean success in the B-I side.
Employment is most people’s comfort zone. This is where most of us were trained to be. Anyone wanting to start a business needs to change their mindsets first and be trained again.
Unfortunately, a lot of people want the benefits on the right side but only a few are willing to pay the price.
I initially thought it was easy to shift to the right side, but I later found out that it is easier said than done. I learned that it requires all of Me to move to the right side of the quadrant… mentally, emotionally, spiritually, physically. The mindsets and values are totally different in each quadrant.
I truly recognize the importance of mentors in the journey to the right side, especially in building a “B” quadrant business. Education is long-term on the B-I side.
My mentors, books, and Kiyosaki’s educational games continue to help me a lot in making the change.
I constantly train and develop myself in the B-I side because I believe it is the path to financial freedom.
Some may say it is risky with no guarantees, but I think it makes more sense to pursue financial freedom on the right side than to cling to the illusion of job security on the left side of the quadrant.
Are you willing to pay the price?
