Cash Flow Quadrant By Robert Kiyosaki

The Money Flow Quadrant  is a book written by Robert Kiyosaki  in which he sensibly explains the four ways to get money today. These four ways are:

• Be an employee.
• Be an entrepreneur.
• Being a self-employed person.
• Be an investor.

The money flow quadrant is the continuation of  Rich Dad Poor Dad. Kiyosaki  intends to show the keys to achieving financial freedom. Really, what Kiyosaki does is a cross-shaped scheme of what the capitalist system assumes. In this way, the author explains the movement of money, which hands it passes through and how to be part of this flow.

The money flow quadrant

Employee

It is the figure of the capitalist system that  trades its time and effort for a reward. In this way, this reward (a salary) comes through work. On the other hand, Kiyosaki does not catalog the employee as an asset, since it cannot be sold or exchanged as a product.

Therefore, he speaks of the employee as the figure in the quadrant that has suffered most from the crisis that has accompanied us since 2009,  his situation has become something unstable and insecure. 

Businessperson

It is the figure who  invests money to maintain a business. In turn, he has flexible hours, as he has employees who do the labor for him.

So  money moves first between entrepreneurs and investors. These are the ones who bet on a project that should pay back the money used to create or use it. Therefore, the role of the entrepreneur is very important in the system; it depends on them that a company does well and that money arrives for the employees’ families.

self employed

Known as self-employed, they  are those who are entrepreneurs and employees at the same time. The self-employed person is their own boss, their time and investment will or will not bear the rewards: money.

The self-employed person has the hardest work, as  his absence from work will not be supplied by anyone,  whether for favor or benefit. In other words, the self-employed does not have vacations, does not rest; according to your working time you will make a lot or little money.

Investor

This will be the least hard work and, in turn, the most risky. They are people who  offer their money to companies so that they can grow, always in exchange for some interests. It is the least hard, as its work does not require effort or time. On the other hand, you need knowledge of the market economy.

Other data of interest to manage cash flow

Kiyosaki talks about  two types of lace:

• Linear Income: Explains how 97% of the population owns 3% of the world’s money.
• Residual income: in the same sense, 3% of the population owns 97% of the world’s money.

On the other hand,  95% of the economic sector is employed. In other words, 5% of participants in the economy are directly in charge of moving this flow of money. In other words, 95% of the population depends on the good deeds of 5% of the remaining population.

Finally,  these four participants in the economy depend on other external factors. What does that mean? This means that the place where you are born, the education you have had, your family environment and friendships, the number of births or deaths or even luck, will affect the pockets of each individual.

Like? It’s very easy,  family and friendships will provide more or less facilities; for example, some more or less prestigious studies may directly affect the work destination.

This is seen, for example, in those millionaire entrepreneurs without studies, who inherited a company. So, there are  two currents of thought about it:

• Meritocratic thinking:  the effort at work or in studies will make the individual have more or less income.
• Anti-capitalist thinking: effort and studies will only help to live a little better or worse, as the capitalist system is increasingly designed so that economic empires are inherited and cannot be conquered.