Many of us would have heard of the best-selling book 'Rich Dad, Poor Dad' , but only a few of us know about the cash flow quadrant theory, proposed by the author, Robert Kiyosaki. He divided the temperaments based on which people earn in life into 4 parts or quadrants. The four types are employees, self-employed, business owner and investor. Quadrant One: Employee. The first two quadrants -- the Es and Ss -- are people who are largely dependent on their jobs for their livelihood. Employees are those who work for a company or organisation.
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So far, it is the single and most powerful idea that I absorbed from Kiyosaki as it helped me improved my education on financial literacy. As a recap here are what the letters in each quadrant represent:. Self-employed worker : Self-employed people earn income by working for themselves — they own their jobs. Investor : Investors earn income from their investments — from money generating more money. Everyone is at least on one spot of the quadrant.
Generally speaking, people in the B and I quadrants reach their financial goals more quickly than people in the E and S quadrants. You can move to the right side. Indeed, if you want to be financially free you have to move to the right side. Moving quadrants is a matter of choice and financial education. Changing quadrants means altering who you are, how you think, and how you look at the world. The change is easier for some people than for others simply because some welcome change while others fight it.
Think about how you generate most of your income. In which quadrant do you primarily fall? Knowing the answer will help you chart your course into the future. By working hard, he got promoted and gained more responsibility, but as he climbed the ladder, although he earned a higher salary, he never had much to show for it beyond longer hours at work and higher tax bills. He climbed his own ladder, and the higher he climbed, the more time he had for his family.
When his business reaped profits, he expanded the business and simply hired more people to do the work. If his investments did well, he reinvested the money and made more money. This is through investments in UITFs, stocks, and mutual funds. When time comes, I would like to devote more of my time in the left quadrant to have more free time and achieve financial freedom.
Tags: kiyosaki. Tyrone is a passionate financial literacy advocate. He started this blog on November when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts.
At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram. Hi Tim, thanks for pointing this out. I changed it just now. And yes, I want to be financially independent one day. I work hard and save hard…but ultimately as an army of one, it can be taxing.
Any thoughts on this? Definitely, mentors are very very important. It just takes time to change. What he should do is write a book on how to market yourself and become a millionaire! You hang out with the rich, you will understand how the rich think and how they make money work hard for them instead of we working hard for money. I have watched other videos as well but this was the easiest to understand.
Unfortunately at the moment I am just an E. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. As a recap here are what the letters in each quadrant represent: Employee : Employees earn income by working for other people.
Business owner : Business owners earn income from the businesses they own Investor : Investors earn income from their investments — from money generating more money Everyone is at least on one spot of the quadrant.
Tyrone Solee Tyrone is a passionate financial literacy advocate. But, i target be I as my prime target. Did you mean right? Leave a Reply Cancel reply Your email address will not be published.
Where are you in the ESBI Quadrant?
We spend a lot of time making choices in our everyday life and we try to select the best option. For instance, We choose the best route to go to office, we choose to drink our favorite beverage, we choose the best shop to buy apparels amongst so many options. We are trained by our educational system to become good employees. We are so busy in becoming the worker of the system an employee that we never realize that we can become the creator of the system too. They are not only earning the fortune, but are also enjoying spending that money too. They spend time with their family, enjoy their hobbies, spend time with friends and have vacations many times a year.
Which ESBI Type Are You? - Insights From The Robert Kiyosaki Theory - Author Of Rich Dad, Poor Dad
This book was a huge success with millions of copies being sold worldwide. His poor dad spent so much time in school earning him a doctorate degree landing on a high paying job but ended with a lot of bills left unpaid while his rich dad did not finish school but ended up owning a business empire. How did this happen? Which one is best?