Site Update and Robert Kiyosaki’s Cashflow Quadrant

Greetings fellow aspiring bosses and investors!

It has been a long while since any articles were published and so I wanted to take a moment to give an update on the site, the name change and share the inspiration behind the change.

As those of you who have been around since the start of this community you would know that Boss and Investor was previously named the Canadian Stock Trading Academy. This site, was created as the online platform to complement the local Meetup Group based out of Calgary, Alberta, Canada called the Calgary Stock Trading Academy (or CSTA). The meetup was formed in order to bring together people from the Calgary area interested in trading and investing stocks. The online website’s objective, was to provide tools for interaction (such as our forums and chatrooms) as well as content from the CSTA Blog and Knowledge Base area.

Late last year, as I am fond of taking long walks around the Calgary Bow River, I started looking for audiobooks to listen to while on the walks. My research led me to discovering Robert Kiyosaki, and his books on financial education and wealth building. His most famous book is entitled Rich Dad, Poor Dad. In the book, Kiyosaki describes the differences in their approach to money management between his “poor dad” (who was a scholarly, highly educated academic and his real father) who never managed to achieve financial wealth, and his “rich dad” (an entrepreneur and his childhood friend’s dad) who achieved wealth and taught financial education to his son and to Kiyosaki.

I went on to read also another of Kiyosaki’s books entitled Rich Dad’s Cashflow Quadrant. The cashflow quadrant is at the core of Kiyosaki’s message on achieving financial wealth. This simple yet elegant idea is what inspired me to change the CSTA website from one solely dedicated to stock trading and investing, to one that also encompasses the “B” quadrant, or “business owner” quadrant. Boss and Investor (or B&I for short) was thus born, with the overall mission to be a community of like-minded people who wish to transition from the left side to the right side of the cashflow quadrant, leaving behind the E (Employee) and S (self-employed) and working on entering the B (Business Owner) and/or I (Investor) quadrants.

Now lets delve deeper into the cashflow quadrant by taking a look at the below graphic:

The Cashflow Quadrant is divided primarily into the left and right sides. The left side, which Kiyosaki states represents 95% of the population, is governed by the principle where a person exchanges their time for money and that income is not leveraged (because you can only work say 20 hours a day, you cannot possibly work more than that and your income is on a $/hour basis). When that person stops working, the income comes to a halt as well. This is the fundamental principle that defines the left side of the quadrant. On the other hand, the right side of the quadrant represents the opposite. On this side, a person exchanges money for money, but more importantly, income is leveraged by either money or people. In the case of the B quadrant, income is leverage by people. The more people who work for you, the greater the leverage. In the I Quadrant, income is leveraged by money. The more money is invested, the greater the leverage. The defining characteristic of the right side quadrant is that both of these income systems do not depend on your time. People and money will both work for you even when you sleep.

For the differences between each quadrant, here is a summary:

E – You work for someone else, exchange time for money. When you stop working, your income stops.

S – You work for yourself, you exchange time for money. When you stop working, your income stops.

B – People work for you. You exchange money and/or time initially to start or acquire the business, but eventually the business runs itself and generates income for you regardless of whether you put in more money or time. Optionally, more money or time can help grow the business and increase the income generated from it.

I – Money works for you. You exchange money and/or time initially to acquire the investment, but as soon as it is acquired, the investment starts (hopefully) generating income for you regardless of whether you put in more money or time. Optionally, more money or time can help generate higher returns on investment.

To better describe each quadrant, let’s use the example of the restaurant business. It’s not a perfect example, or even an ideal business system, however it is one of the most common businesses in our economy, so everyone can relate quite easily. A restaurant business model exchanges food and good service for money. Restaurants generally employ waiters/waitresses, chefs and managers as the primary human resources. Starting a restaurant requires investor money, and growing the restaurant to a multi-restaurant, multi-region chain requires generally a corporate structure and most typically this is in the form of a franchise system.

Someone in the E or Employee quadrant in the restaurant business would exchange time for money and work for someone else, at various degrees of rank, from a waiter all the way to the CFO of a large franchise. Even the CFO exchanges time for money and works for the owners of the business (unless they are owners themselves). A waiter may make $15/hour and a CFO may make $400/hour, but they are both in the E quadrant. This person would stop making any income if they did not show up to work on any given day.

S – Someone in the S quadrant would be someone who exchanges time for money, however, they work for themselves and not for others. In the example of a restaurant business, an S might be the owner of the restaurant who also acts as the Manager and works 7 days a week at the restaurant because they cannot afford to pay a Manager to work for them, or, they don’t like to give up control. This person would not make any income if they did not show up to work. The effect might not be as immediate as an E quadrant employee, as the business may still rung without them for a while (for example, a waitress may step up and try to manage the restaurant while the owner is absent) but due to the lack of experience, the business would eventually degrade and start losing money in the long run.

B – Someone in the B quadrant would be a person who owns a restaurant (or several of them) but never steps foot in it. This person may simply meet once a month with his restaurant managers and his accountants to review financial statements and other reports and give general high level directions. Depending on how well he chose his managers, this person may only meet with them once a year. In this scenario, the B quadrant person would earn incoming throughout the year without ever having to exchange any time or money for this income.

I – Someone in the I quadrant would be a person who purchases shares in a company in the restaurant business (shareholder), or alternatively lends money to someone who wishes to start a restaurant business (angel investors). This person is not involved, even remotely with the management of the business. However, depending on the degree of ownership, the person may exert full authority over the management of the business and supervise the people managing the business at the highest levels. For example, they may vote to remove Board Directors from a Corporation, or remove the CEO of a private company and replace him with someone else. This person generally earns income over time without any exchange of money or time, even less so than someone in the B quadrant.

Now that we have understood the definition of each Quadrant, let’s take a look at how to move from one quadrant to another. If one wishes to have the most diversified set of assets and skills, then they should start from E, go through S and B before ending at I.

Going from E -> S -> B -> I in sequential order is not essential. And investing a large amount of time or money in every quadrant is also no necessary. The basic principle is that the more high income skills and assets you gain, the higher your income. How much one wants to devote to self development and acquiring of assets depends entirely on themselves.

For example, someone may remain in the S quadrant for decades, as a professional working for someone else (e.g. an accountant, a doctor, an engineer or an airline pilot). However, on the side, these E quadrant folk may create a side business or invest their money in the financial markets and earn multiple streams of income from each quadrant. Of course, Robert Kiyosaki teaches that the most efficient quadrants to earn income are the B and I quadrants, because they provide leverage and freedom. So, the more income that comes from the right side, the better. Ideally, a person’s entire income should derive from the right side, but if this were easy and quick, everybody would be a multi-millionaire. So, how is one supposed to move from the left to the right side quadrants? The answer is self improvement and investing.

Self improvement encompasses the learning and improvement of high-income skills and knowledge. These are the type of skills and knowledge that enable a person to start, run and own a business system (even with other people’s investment capital). Investing encompasses the skills and knowledge to make sophisticated investments with your own money that yield large returns.

Examples of high income skills include:
– Accounting and ability to read financial statements
– Management skills
– Understanding of business and tax laws
– Understanding and ability to trade the financial markets
– Understanding of human resource systems and management
– Understanding of marketing, sales and business development
– Networking

These are some of the core skills that would enable a person to start, acquire and manage a business or an investment. The more time and money one spends on developing these skills, gaining the knowledge and gaining the experience from applying it the more income they are likely to generate form the right side of the quadrant. Going back to our restaurant business model, a waitress would not be required to have any knowledge of accounting, financial statements or legal matters. They would only be required to know the basics of customer service. A restaurant manager on the other hand, would need to know about accounting and human resource management in order to manage these aspects of the business. A restaurant owner would need to know, in addition to all the above, matters related to real estate, legal issues, marketing, and business development. An owner of a national restaurant franchise would need to know about regional logistics, understand restaurant market trends, and about all the previously mentioned skills at a higher level of complexity. A franchise owner would require the skills to manage 1000 employees, where as a single restaurant owner would require the skills to manage only 10 employees.

So the answer on how to move from the E and S quadrants to the B and I quadrants is continued self improvement and re-investment of earned money. While the left side is governed by instant rewards, low risk, and steady effort over time for a fixed income, the right side of the quadrant is governed by delayed rewards, high risk, high effort at the start which continually lowers to the point of no effort whatsoever, while income keeps increasing due to growth of the business and the accumulation of capital that is then re-invested to generate additional passive income.

So, if you have not read Kiyosaki’s books, i highly recommend them.

Rich Dad, Poor Dad

Rich Dad’s Cashflow Quadrant

What are your thoughts on Kiyosaki’s Cashflow Quadrant principle?
Leave a comment below or join the discussion on the B&I Forums.

This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to Site Update and Robert Kiyosaki’s Cashflow Quadrant

  1. incikelet says:

    Where Can I Buy Seroquel Purchase Seroquel Online

    TOP offers Seroquel online!

    ORDER Seroquel (quetiapine) ONLINE

    * 100% Satisfaction Guaranteed!
    * Secure Ordering

    Quotes:
    Generic Seroquel No Prescription
    buy cod Seroquel jcb
    low cost Seroquel 25 mg tab cod accepted
    is Seroquel a cancer drug
    Seroquel peak dose half life
    Seroquel cancer medicine
    overseas Seroquel 500 mg cheap
    order generic Seroquel generic does look like
    Seroquel and infection
    Seroquel cost uk cf Seroquel online pharmacy New Orleans
    buy online pharmacy Seroquel in FL
    intralipid for Seroquel toxicity protocol
    otc Seroquel 40 mg tablet
    cheapest Seroquel available online Augusta-Richmond
    Ocuflox er and seroquel
    Seroquel or Seroquel
    get Seroquel fast dissolving tablet
    is Seroquel safe?
    cheap saturday delivery seroquel
    Ceclor seroquel citalopram
    discount Seroquel generic capsule
    Where can i Buy Seroquel Get without a prescription
    Generic Seroquel uk no prescription
    Actoplus Met seroquel
    canadian pharmacy Seroquel online
    Aristocort seroquel
    online Seroquel cod pharmacy in hayward
    Seroquel still no ovulation symptoms
    buy online Seroquel 2.5mg
    seroquel drug interactions alcohol
    cost of Seroquel how much
    Find cheapest Seroquel New York
    cheap non prescription Seroquel Illinois
    Seroquel with lyme
    buy Seroquel drug
    buy Seroquel cash on delivery excesssive usage
    buying cheap Seroquel europe AL
    single dose buy Seroquel
    Buy Seroquel mg Seroquel 200mg
    nausea Seroquel
    Seroquel how long does the initial breakout last
    find or advil Seroquel 40 acid and prescription
    cheap Seroquel with cash on delivery at olathe
    Seroquel overnight cod no prescription Tallinn
    liquid Seroquel much
    Seroquel once daily
    Generic Seroquel perscriptions cost
    Zebeta seroquel citalopram
    buy Seroquel tabs saturday shipping
    buy Seroquel in AL
    Xenical seroquel
    buy Seroquel no online prescription at AL
    order Seroquel for mrsa bactroban nasal
    Seroquel cod overnight delivery Charlotte

  2. incikelet says:

    Biaxin Discount Coupons – Buy Biaxin on the internet

    Want Biaxin with DISCOUNT?

    BUY Biaxin (clarithromycin) ONLINE

    * Lowest Prices In Our Pharmacy Shop!
    * Secure Ordering

    Tags:
    Order Biaxin Overnight Delivery
    Biaxin and syphilis
    use of Biaxin during pregnancy
    order cheap cost Biaxin
    buy brand Biaxin 250 mg in internet visa no rx
    Biaxin gels uk
    Biaxin childrens dosage
    have 24 hours purchase Biaxin consultation
    Where to Buy cheap Biaxin no prescription
    Biaxin ds liquor
    cheap generic Biaxin tablets fast
    Where to buy Biaxin Biaxin diabetes medication
    watson Biaxin
    yasmin missed pill Biaxin and ethinyl estradiol
    Biaxin infusion stability
    cheap Biaxin cialis generic
    buy Biaxin medicine no script at HI
    nextday Biaxin in CA
    Best cheap Biaxin 24 7 us
    buy Biaxin for delivery tomorrow
    generic Biaxin no prescription needed u.s.a pharmacy fedex delivery
    Biaxin er efficacy
    biaxin and prevacid
    Biaxin interactions
    Generic Biaxin pancreatitis feline
    Buy Biaxin online safe Biaxin dose children
    best price on Biaxin pharmacy with prescription
    pharmacy Biaxin 5 mg online no rx
    Biaxin online saturday delivery in TX
    can i take Biaxin and valium
    Biaxin dosage use
    Biaxin 400 mg online mastercard
    get Biaxin over the counter
    Ordering cheap Biaxin us Quick delivery
    order cheap cost Biaxin
    Biaxin emulgel dosage
    no prescription cod Biaxin at westminster
    best price generic Biaxin online saturday delivery
    price Biaxin no script no script
    cheap order USA Biaxin
    Approved FDA Biaxin Discount Save
    Biaxin discount Washington

  3. incikelet says:

    Oxcarbazepine Discount Coupons. Best online Pharmacy to buy Oxcarbazepine.

    Discount Oxcarbazepine – Visit our Online Pharmacy!

    ORDER Oxcarbazepine ONLINE

    Quotes:
    Oxcarbazepine no doctors prescription
    buy canadian oxcarbazepine price online
    oxcarbazepine side effects insomnia
    generic Oxcarbazepine pills
    cheap Oxcarbazepine tablets sale
    Generic Famvir breakdown oxcarbazepine
    No prescription Oxcarbazepine Fedex delivery Lubbock
    purchasing Oxcarbazepine
    alternative medication to Oxcarbazepine
    drug Oxcarbazepine treat
    How to Buy Oxcarbazepine Online No Prescription free Oxcarbazepine in newport beach
    Oxcarbazepine tablets saturday delivery
    Generic Strattera breakdown oxcarbazepine
    non generic Oxcarbazepine from
    Generic Reglan breakdown oxcarbazepine
    buy Oxcarbazepine without prescription pay cod
    recovery of Oxcarbazepine from human plasma
    Oxcarbazepine breakdown oxcarbazepine
    bula oxcarbazepine
    Vardenafil breakdown oxcarbazepine
    buy cod Oxcarbazepine
    oxcarbazepine in thoroughbred racing with cash on delivery
    Oxcarbazepine no prescriptions needed cod Oslo
    Oxcarbazepine from us pharmacy
    buy Oxcarbazepine joint stiffness drugs no doctors
    online order Oxcarbazepine NY
    buy Oxcarbazepine in japan
    Oxcarbazepine shipped overnight without a prescription Clovis
    authentic Oxcarbazepine online
    Oxcarbazepine dosage in rats
    oxcarbazepine pimples
    Generic Bicalutamide breakdown oxcarbazepine
    is generic Oxcarbazepine fda approved
    order Oxcarbazepine coupon
    adult male acne anger Oxcarbazepine
    purchase Oxcarbazepine online cod accepted at DE
    Buy cheap Oxcarbazepine overnight
    get Oxcarbazepine without prescription
    cheap order prescription generic Oxcarbazepine
    how do you get Oxcarbazepine canada order New York
    Best online price for Oxcarbazepine buy cheap discount Oxcarbazepine no script
    order Oxcarbazepine discount fast delivery
    Want to Buy Oxcarbazepine us Country cheap Product
    Oxcarbazepine non prescription Jackson
    Lopid breakdown oxcarbazepine
    Generic Ceftin breakdown oxcarbazepine
    Generic Oxcarbazepine with no Card
    oxcarbazepine otic generic
    oxcarbazepine buy oxcarbazepine
    how to buy Oxcarbazepine overnight delivery cheap
    Buying Oxcarbazepine Legally

Leave a Reply