Book Review – Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom

Robert Kiyosaki has a series of books about financial planning, business, wealth, etc. The book, “Rich Dad, Poor Dad”, has many concepts and principles that would benefit anyone to succeed with their personal finance. With that particular book, the key idea that I derived from reading it is to become more financial literate. You want to master how finance and money works to the point you speak it fluently. You can do that by practicing the principles outlined in “Rich Dad, Poor Dad”.

The book, “Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom”, goes into the specific concept of how we derive our money. It discusses the pros and cons of each of the four areas (hence, the cashflow quadrant).

The four quadrants are:
1) Employee
2) Small Business
3) Big Business
4) Investor

Most people would fall in the quadrant of employee. Then, for those in business, most of them would fall in the small business quadrant. These two quadrants are the most popular. This book discusses the importance of being in the next two quadrants: Big Business and/or Investor.

There are examples and discussions on big business and small business. You will work much harder in the small business. You will work much smarter in the big business. The key difference between the small business and big business is the system. The system would allow you to not be locked in the business. There are various examples of systems such as franchising, networking, etc. Also, within the big business quadrant, you get the most advantageous way of tax benefits and also your ability to earn your income goes beyond your own time and effort.

Out of all of Robert Kiyosaki’s book, I would recommend the books, “Rich Dad, Poor Dad”, and “The Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom”. It would help you to become more financially literate and more financially fluent. Finance has its own language. Most people do not speak nor do they care to understand the language of money and finance. This book could add to your financial vocabulary and language. Now, as far as becoming more financially literate and using other people’s money (e.g. leverage, credit, debt, etc.) for business deals such as real estate, I would disagree and operate on a cash as you go basis. There is too much risk involved when you deal with debt (or leverage, margins, etc.). Keep your personal finances simple.