On the treadmill this morning, I was listening to Robert Kiyosaki and a recording he did on the “The Business of the 21st Century.”
If you have been educating yourself on creating financial independence, chances are pretty good that you have read one of his books. His first was “Rich Dad, Poor Dad.”
In it, he describes the financial education he received from his “poor dad” and contrasted that to the financial education he received from his “rich dad.” His father, his “poor dad”, taught him the path to wealth and independence was to go to work for a good company, enjoy job security, and retire in 30-40 years with your gold watch!
Contrast that to the education he received from his “rich dad”. He was the father of one of his friends and taught Kiyosaki how to secure assets and then make his money and his assets work for him.
His second book, “CASHFLOW Quadrant” is the book I recommend that you read. In it he covers the concepts found in “Rich Dad, Poor Dad”. But, he goes into detail on the “CASHFLOW Quadrant”, a very important concept to learn how to build financial independence.
On the left side of the quadrant, you can see where 95 percent of the population earns their income. They are employees who trade “hours for dollars” and the “solos”. The key characteristic of their status is very simple. Like the employee, if they don’t work, they don’t get paid. A self-employed lawyer might have a very profitable practice. But, if she takes a Friday off and doesn’t bill clients, she isn’t getting paid.
Likewise for the small business owner. If he doesn’t open his restaurant on a Monday holiday, he doesn’t get paid, because he isn’t serving meals.
Note that while the bulk of people find themselves on this side of Kiyosaki’s CASHFLOW Quadrant, the bulk of the income actually is on the other side of the quadrant.
Five percent of the population are either business owners where their businesses are working for them rather than the other way around.
Or, their investments are working for them, such as real estate and other reoccurring investments.
Note where 95 percent of the income is found. Yes, indeed, on this side of the CASHFLOW Quadrant.
So, how do you get from the left side of the CASHFLOW Quadrant to the right?
Well, there are ways to get there. And you don’t need a six figure investment.
Stay tuned. I’ll be writing more on this over the next few weeks.
