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Overview

Many people have dreams of quitting their jobs and living off the money they’ve saved. However, that is often just a dream because most people don’t have enough money to quit their job.

Author Robert T. Kiyosaki had dreams of being wealthy like his dad, but that didn’t happen when he was a kid. His father worked hard and ended up in debt and financial ruin. After watching this happen to his father, Kiyosaki vowed not to let it happen in his own life. To do so, he learned how to create wealth wherever he went.

In this article, you will learn about the core values that Kiyosaki has used to make his fortune in real estate and business. He uses these values to guide him throughout his life and career. Hopefully, you can apply them as well.

The author will discuss four types of cash flow, the Information Age and its impact on jobs and pensions, as well as how fear affects our perspective on money.

Big Idea #1: The different ways in which we earn money can be divided into four quadrants.

Let’s imagine a plus sign on a piece of paper. Two lines divide four spaces. And those four spaces are called quadrants.

The most important point from this passage is: There are four ways to earn money.

The four quadrants are labeled E, S, B and I. The E stands for employee or small business owner and the S for self-employed or small business owner. On the right side of the plus sign, we have big businesses owners (B) and investors (I).

In the United States, there are four main ways to earn money. You can get a job (E), start a company (S), invest in companies or real estate (I) and/or sell your time as an expert by giving speeches or training people on how to do something (P). For instance, you could be a doctor who works for someone else, or you could open up your own practice.

A doctor could choose to work as an employee for a company. She would be paid a salary and have limited control over her schedule, but she would get benefits such as health insurance. Alternatively, the same doctor could become self-employed by starting her own private practice. This means that she’d need to set up her own office and hire staff members; however, it also gives her more freedom because she is not bound by strict corporate rules. Another option is for the doctor to become a business owner of some sort (for example, owning a medical clinic). In this case, the business manager may run the organization while the doctor can continue practicing medicine without having to work directly in that field all day long.

As a doctor, she would have the means to invest. She could do that by investing in stocks or real estate. If she were successful, then her investments might provide her with enough income to live off of while still working as a doctor. That’s how most people are able to retire—by having an investment portfolio that generates passive income for them while they’re working and earning money from their job. Some people find their place in life and are content with being happy where they are—they don’t want more than what they already have. However, if you want financial freedom, then you need to move from the E (employee) quadrant into one of the B (business) or I (investor) quadrants so that you can generate passive income through your investments rather than relying on your paycheck every month.

Big Idea #2: Studying and working hard won’t get you to financial freedom.

When Robert Kiyosaki was growing up, he had two father figures. One of them was his biological dad, who worked for the government. The other was his friend Mike’s dad, a self-made businessman and investor. He came to know them, respectively, as his poor dad and his rich dad. As he observed their lives and learned from their successes and failures in life, he began to learn fundamental lessons about work and money that would shape the rest of his life: Studying hard won’t get you to financial freedom; it’s having a good education combined with working smartly that will do so.