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Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom (Book Review)

Updated on July 5, 2012

This book was given to me by my Team MonaVie mentor, being of technical mind and dead broke I tore right in searching for the secrets of the rich. What I found was amazing and informative, some of which I have suspected all along. Those of you who don’t know Robert T. Kiyosaki, he is an independently wealthy author, business owner and investor and has brought to us the knowledge of the money game to teach us how to gain financial freedom. Cashflow Quadrant is part two of Rich Dad, Poor Dad another of Robert’s books.

What is the Cashflow Quadrant? You ask. It is a visual representation of the four ways we all earn income or cash flow. Inside you will learn what each is and how each works. Robert also describes the difference between the two sides and how to move from one side to other. Later he goes on to teach about investing and business ownership. The Cash Flow Quadrant has provided me with a new found understanding of the world of finance, some of which I will share here.

Cash Flow Quadrant:

E= Employee (any one who works for a company and trades time for money, in the form of a paycheck)

S= Self Employed (any one who owns a business that will not run without them there)

B= Business Owner (some who owns a business system that generates income on its own)

I= Investor ( some one who invests money for profitable return)


Wealth is measured in time. How long can you support your standard of living without physically working. Example if you can live on $1000 a month and have $3000 in savings you are 3 months wealthy. Of course the goal is to become indefinitely wealthy or free from working. Work smart not harder. Make your money work for you. These concepts most of us already understand. However Robert explains why we do not practice them and presents how we must change our money habits in order to set them in motion. Many of us have been sucked into the “no money down easy monthly payment” debt machine, this is not the path to wealth it is a path to a life of hard work.


Investing is make the money you do have work for you. Many of us invest some how already, but how we do it and when can always use improvement. Thereare many types of investors ranging from safe and secure to risk takers and gamblers find out which one you are and decide which you want to be. Learn the steps needed to be the investor you desire and take action. Choose from an array of investment styles and find the one that is right for you. Stock, bond, mutual funds are a few ways to invest but there is also real estate and business ownership. It is also possible to to use other peoples money to start a grow a successful business system.

Business System:

There is more to a successful business then just a good product or service. Actually there are a lot of big companies with average or even bad products, that succeed because the system for distribution, development and marketing makes up for the products faults. Without a strong system your business will most likely fail or you will fall into the self employed category where the company cannot run without your presence. The system can also refer to those you have chosen to trust for managing the company. McDonalds is a great example of a business system. We can all agree that thier products are a bit to be desired, but they are one of the biggest fast food franchises in the world. Why? The system of providing convenience and familiarity. No matter which McDonalds you go to you will find the same menu, same packaging, same method of cooking and same delivery method. This system is what make or breaks a business.

Well, those are a few insights you may find among the words of Robert T. Kiyosaki’s Cashflow Quadrant.

Find this and related books in the links below (which support this hub).


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    • Property-Invest profile image

      Property-Invest 8 years ago from London

      Yes, it's all about the system. Taking work off your own desk and giving it to someone who works cheaper and even better!

    • blackmarx profile image

      blackmarx 8 years ago from Rice Lake, WI

      thanks for the comment Prop Invest. I will have to look into the the "who took my money". Duplication is the next step. create a product system that can be easily duplicated and run with it. In the information age, Information is the easiest product to duplicate (cd's, books, dvds). The world is becoming hungry for new knowledge and entertainment.

    • Property-Invest profile image

      Property-Invest 8 years ago from London

      Hey BM. Good Hub! I've read all Roberts books and I'd say Who took my Money is the best. So what's the next step towards cashflow creation?

    • blackmarx profile image

      blackmarx 8 years ago from Rice Lake, WI

      Thanks Ben, I a happy to reacquaint you with an old friend.

      There was a lot of things covered in this book its hard to write about them all in a short hub. so much good info in his books, I can't wait to read some of the others.

    • Ben Zoltak profile image

      Ben Zoltak 8 years ago from Lake Mills, Jefferson County, Wisconsin USA

      Well done. I've read some of Kiyosaki's stuff, I especially enjoy what he says about assets vs. liabilities. You can learn a lot from just reading a bit. This makes me want to look him up again, cheers,