The Cashflow Quadrant and How to Apply It in Your Life

I was sitting in the car just a few minutes again just thinking about a way to educate people on finances. I figured that people need to know what they are dealing with if they plan on becoming financially free. I wanted to take a few nuggets from one of my favorite author’s books, Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom The book breaks down four categories or ways people make money. I apply this concept to my journey of obtaining financial freedom. I feel that you all should be informed.

The Cashflow Quadrant




This concept is made to show you 4 ways people produce income. It is up to you to figure out which quadrant you want to be in.

The Employee

This is where the majority of Americans get their money. This involves working the usual 9 to 5. Most people tend to stay here because they are accustomed to being here. The employee is taxed the most because of the way they are producing income. Many people start here, it is up to you to make a change.

The Self-Employed

This is more like you owning a job. Self-employed individuals are usually the ones who love to do things themselves. They love control. They own the business and they work there. The problem with a self-employed individual is that they cannot trust others to do the work for them. This leaves them a slave to their job. The business only prospers when they are there working.

The Business Owner

This person owns a system. They have people in place to run the business for them. This gives them more leverage. They can step away from the business for a year then come back and things are still running smoothly. The business owner and the investor are taxed less because they are the ones helping the economy by creating jobs. This is the place that I’m trying to be in.

The Investor

This one explains itself. They own investments. This can be things such as stocks, bonds, real estate, the list goes on. This quadrant is also taxed less. Using this quadrant allows your money to work for you.

What quadrant is for you?

That is completely up to you. It also depends on your personality or goals. It also depends what freedom means to you. If you plan on making a change, here are a few steps to take:

1. Learn about each quadrant

2. Figure out what quadrant you are in now

3. Decide which quadrant you want to be in

4. Decide if financial freedom is for you

5. Increase your financial intelligence

6. Identify the risk

7. Get more skills

I wish I could go into more depth about the steps. This is just a small nugget to get you going. If you wish to join me on this journey, you can start by following the link HERE.


Make it a great day!
jay the analyst and kendra foster

Jay The Analyst

Work With Me – (Click Here)

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