THE CASH FLOW QUADRANT SUMMERY FROM RICH DAD POOR DAD by Robert T Kiyosaki

Summary

The video introduces the 'Cashflow Quadrant' theory by financial advisor Robert Kiyosaki, which categorizes all income generating methods into four groups - E (employees), S (small business owners), B (big business owners) and I (investors). It analyzes differences between these groups regarding income potential, time/financial freedom, and mindsets. The theory explains causes of uneven wealth distribution in society, with 95% people belonging to E and S quadrants owning just 3% of money, while 5% in B and I quadrants own 97% money. It conveys that one must transition from left to right quadrants by changing mindsets rather than just jobs, to attain financial and time freedom.

Takeaways

• 😀 There are only 4 categories of income - E (employee), S (self-employed), B (big business owners), I (investors)
• 😞 95% of people are in E and S quadrants, but 97% of money is owned by B and I quadrants
• 💸 B and I quadrants allow earning passive income even while sleeping
• ⏰ E and S quadrants struggle with lack of time and money to enjoy life
• 🎓 Traditional education system creates people in E and S quadrants
• 👷‍♂️ Employees have job security but work to fulfill boss's direct orders
• 🏢 B quadrant builds duplicable systems to leverage employees' time
• 🤑 I quadrant uses money to earn more money through investments
• ✈️ The goal is to reach B and I quadrants for financial and time freedom
• 😎 You can earn from different quadrants - need to change quadrant, not just job

Q & A

What are the four quadrants that all income falls into according to the cash flow quadrant theory?

The four quadrants are E (employees), S (self-employed/small business owners), B (big business owners), and I (investors).

What percentage of people fall into the E and S quadrants versus the B and I quadrants?

95% of people fall into the E and S quadrants while only 5% are in the B and I quadrants.

Why do people in the E quadrant believe in job security?

People in the E quadrant believe in job security because they rely on a paycheck and benefits from an employer. They prioritize having a stable, secure job.

What makes the income of people in the B quadrant unlimited?

The income of people in the B quadrant is unlimited because their earning formula depends on leverage - using employees and systems to generate profit. They can continuously scale their income with more employees, hours worked, and profit per hour.

How does the McDonald's business model demonstrate duplication and systems?

The McDonald's business model demonstrates duplication through franchising the same system all over the world. Every McDonald's looks and operates identical with speed systems to quickly serve customers.

Why do investors in the I quadrant create passive income?

Investors create passive income because they use money to make more money through assets and investments that generate income without active work. Their money works for them even while they sleep.

What causes the uneven distribution of money between quadrants?

The education system creates employees rather than business owners and investors, causing most people to fall into the low-income E and S quadrants while very few have the knowledge to become B and I quadrants.

How can you move from the E and S quadrants to the B and I quadrants?

To move from E and S to B and I requires gaining financial intelligence, transitioning from reliance on active income to building systems and assets that can generate passive income.

Why don't savings from employees accumulate wealth?

Employee savings don't accumulate real wealth because the limited income only allows saving small amounts that get eroded by inflation over time or lost in market crashes.

What shift in mindset is required to become rich?

Becoming rich requires shifting mindset from changing jobs to changing quadrants by building systems and assets that can create increasing passive income.