Now that the Canada Post strike is over, I can finally give away a book on my blog!
In case you haven’t heard of Robert Kiyosaki, he is the author of Rich Dad Poor Dad (one of the #1 New York Times Best sellers). From that successful book, he has created a board game, many other books, and even both free and fee-based seminars on how to generate passive income cash flow. He’s pretty much the cash flow guru and many people love and respect his entrepreneurship.
In this book following the wildly popular Rich Dad Poor Dad, I was expecting that he would basically rehash Rich Dad Poor Dad and throw in some redundant information (I guess I don’t have much faith in follow up books/ sequels!). However, I was pleasantly surprised and find this book better than the first one. I found that the first book didn’t give enough practical advice/ information. The first book was good though because it gave a solid background for his follow up books, I suppose. In this book, there are plenty of examples on how to get yourself into the desired “quadrants”.
In Cash Flow Quadrant, he explains in detail the different quadrants (E, B, S, and I). In case you haven’t read the first book, the quadrants are as follows:
S- Self Employed
B- Business Owner
He then goes on and explains the personality characteristics of each quadrant, and explains that you can be in multiple quadrants simultaneously (e.g. be an employee and also own a business on the side, or be an employee and be an investor in stocks and mutual funds). I found the description of the personality traits of different quadrants particularly interesting. For example, those who are self-employed professionals, like lawyers, doctors, accountants, and dentists. They are characterized by being fiercely independent and like to the take control of the situation by doing it on their own (e.g. they have the mentality of: “If you want something done right, do it yourself”). They are often considered perfectionists.
He also explains that for those who own their own business, it can be businesses in the “S” quadrant or it could be a business in the “B” quadrant. Those in the “B” quadrant requires that the person have an ability to lead people and take control of systems, and have people working for you and following your vision. Those in the “S” quadrant who own businesses could be the above mentioned self-employed professionals.
He describes the characteristics of the wealthy and that most of them are investors, business owners. Just like Millionaire Next Door, he explains that our main expenses are our taxes- those who are in the “E” quadrant will continue paying taxes whereas those in the other quadrants (especially “I” in terms of dividends etc.) will find a way to minimize taxes and be able to continue to generate cash flow.
In the next few chapters, he explains the three kinds of business systems, the seven levels of investors, and even talks about how advisers can even take advantage of your financial illiteracy, how to become a “B” and an “I” (aka wealthy people) and finally how to make disappointment your strength. I especially enjoyed the last few chapters, as he focused on telling the reader that everyone needs mentors, that we need to practice humility and be ready to take risks and fail (for example, starting business and worrying that it won’t do well). If we fail we can learn from our mistakes and grow from them, as long as we have an open mind.
All in all, I enjoyed this book- it helped open my mind to different personalities and how we are drawn to different quadrants, and gave practical ways on how to change yourself so you can be in a more desired quadrant in terms of wealth accumulation.
Readers, have you read this book? What do you think of his series/ message?)