Rich Dad’s Cashflow Quadrant
Here are a few things I loved in this book.
Book 2 of the famous series Rich Dad Poor Dad goes a step further in helping us achieve our goal of financial freedom. This book focuses on an important aspect of our lives and defines how each one of us belongs to a specific category or as the author Robert Kiyosaki says “Each one of us resides in at least one of the four sections (Quadrants) of the CASHFLOW QUADRANT”
We all get stuck in one of these quadrants divided into E (Employee), S (Small businesses or Self-employed), B (Big Business) and I (Investor) and often find it difficult to step out from one quadrant to another. We all need to prepare ourselves to shift from one quadrant to another not just financially but emotionally and mentally as well. Our mental & emotional stability and our attitude towards taking risks can greatly impact our journey towards financial freedom. Our ultimate goal should be to make ourselves successful in the B and I quadrants. Here a few things which I absolutely loved in this book:
- First and foremost thing, we must always focus on building our assets instead of liabilities because towards the end liabilities is what bleeds our pocket and ultimately makes it difficult for us to move from one quadrant to another.
- We must be ready to manage risks.
- It is of utmost importance that we must focus on controlling our emotions when it comes to buying products that depreciate in the price instead of adding values to our lives.
- Maintain a healthy balance sheet of your life. Note down each and every transaction in an excel sheet.
- Take some time and analyse where your money comes from and where it goes every month. Focus on paying yourself first, that is, focus on building your assets and then find ways to pay for your necessary items.
- Instead of always emphasising on how you cannot afford it, focus on how you can afford it.
- Work hard towards building multiple income streams so that if one of them goes downside, you will have something on backup. Focus on finding solutions instead of getting worried about downsides.
- Get a live experience in the field you want to pursue your future in and then switch the quadrants instead of directly starting a business you barely know about.
- Identify your financial goals and identify your short term and long term goals and review it monthly, yearly or every 5 years depending on your choice.
- Last but not the least, slowly and carefully switch from one quadrant to another quadrant. Plan it from time to time and make sure to implement your plans into action.
The road to financial freedom is often a difficult and bumpy road however with the right guidance, with the help of the right mentor and with the right efforts you can move closer to your end goals and make your dreams come true. Books like these bring back our focus on the things which we usually neglect and barely pay attention to in the day to day hustle and eventually forget. This is one of the best books I’ve read on personal finance and it really sheds light on various aspects of our financial health.
