The Rich Dad’s Cashflow Quadrant: How to become an Investors
“You will never know true freedom until you achieve financial freedom.” ― Robert T. Kiyosaki
Being self-employed or a small business owner means you are your own boss. You earn and make your own income. It requires persistence, determination, and sleepless nights to build a successful business. However, many times you forget to trace your path to success. Your personal growth becomes stagnant. Moreover, the dream of living a wealthy life gets lost within the routine work of your small business.
But what if there is a tool to measure your growth?
Yes, the tool was discussed by Robert T. Kiyosaki in his book titled Rich Dad’s Cashflow Quadrant. The concept is quite simple but it can drastically change your professional life. Before discussing how you can go from self-employed to an investor, let’s see what is a cashflow quadrant.
The Cashflow Quadrant
The cashflow quadrant consists of 4 quadrants named Employee (E), Self Employed (S), Business Owner (B), and Investor (I). Additionally, the 4 types of people are grouped into 2 categories. One who looks at the world through the left side (poor side) & others look at it through the right side (rich side). The aim is to achieve financial freedom and move towards the right quadrant. Simply, people aim to move from poverty to wealth.
As per Robert Kiyosaki, only 5% of the people belong to the Investor quadrant. As the majority of the population is stuck in the employment and self-employment quadrants. The first step to shifting from the left to the right side quadrant is to start thinking. Robert T. Kiyosaki also said, “Thinking is the hardest work there is. That is why so few people engage in it.”
How to go from left side to right side?
Money has an addictive power. When a person starts earning money through a particular quadrant, one gets addicted to the quadrant. If you earn a certain amount from your small business or as a freelancer. Your brain will get fascinated by that cash reward. Shifting from one quadrant to another becomes difficult because of this.
Moreover, the risk factor of the right side of the quadrant adds up to the difficulty. The questions like, “You might get bankrupt at the end”. Moreover “Money can’t buy happiness” like thoughts become a mental barrier. So one needs to overcome all such mental barriers.
To move to the I quadrant, first focus on the B quadrant. The shift could be a little easier as you have already built a business skill set. You might have also become a master of networking. You know how to find the best fit for a job and use scarce resources to achieve the target. But, team management, leadership, and great communication skills are indispensable skills for a large business owner. So you must put some more skills on your bucket list of ‘New Skills to Learn’.
Robert said that a great business owner is one who is a great leader. He also stated, “If you want to be a leader of people, then you need to be a master of words.” Being a leader of competent teams, you can make a profitable company.
Once a successful company has been built you are ready to step into the Investor (I) quadrant. As the increased cash flow will give you the freedom to invest more fruitfully. The more profitable businesses are, the more money you have in your hands to invest. Though you can start investing even with $1000 or less. But for big returns, big amounts must be invested.
As per Robert, Kiyosaki, the I quadrant is where money turns to wealth. As a result, you achieve financial freedom by using money. In this stage, you don’t work for money instead money works for you. As an investor you must use your skills and expertise in a drastic business environment before investing a single penny.
“Believe in yourself, and start today!” ― Robert T. Kiyosaki
We at SKB Accounting understand that accounting could be tedious and time-consuming. Besides, it could be expensive for a small business to hire and train an in-house accounting department. If you feel the same and are looking for someone to overtake your accounting stress, schedule a call with us now. So that you have time to focus on making a profitable business and shift to the Investor quadrant.
-by Dipali Nishad