Thursday, December 6, 2018

Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom (2012) by Robert T. Kiyosaki, Book Review

Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom (2012)
by Robert T. Kiyosaki

After I read the first chapter of this book, I realized that I should read Robert’s Rich Dad Poor Dad (1997) first because he always refers to it every time. But I don’t want to stop my momentum, so I downloaded the audiobook and decide to listen to Rich Dad instead (I listened to 6 hours audio in a week) while reading this book. In this way, I can understand this book as much as I can since I have only a little knowledge about financial education (sad) and economic terms. I regret that I only read this book NOW but at the same time I’m glad that I read it NOW. I wish I was more concern about my financial education early in my life. I was an ignorance then. But yeah, it’s not too late if I start now, right?

The main reason people struggle financially is that they have spent years in school but learned nothing about money,” said Robert Kiyosaki matter of fact. “The result is that people learn to work for money… but never learn to have money work for them.” As Robert’s Poor Dad used to say, “Go to school, get good grades, and find a safe secure job.” His Poor Dad as with many of our parents and parent parents always advise us to become either a well-paid employee (usually in Malaysia, work with the government) or a well-paid self-employed professional (such as a medical doctor, lawyer, engineer or accountant). Poor Dad was very concerned about a steady salary, benefits, pension, and job security. Poor Dad’s keyword is SECURITY.

But Robert’s Rich Dad (his friend’s dad), although uneducated in term of formal education, offered very different advice. He said, “Go to school, graduate, build a business, and become a successful investor.” Don’t be a slave of money, said Rich Dad. He believed that life is more important than money, but that money was important for supporting life. He often said, “You only have so many hours in a day, and you can only work so hard. So why work hard for money? Learn to have money and people work hard for you, and you can be free to do the things that are important.” To Robert’s Rich Dad, what was important was: Having lots of time to raise his kids; having money to donate to charities and projects he supported; bringing jobs and financial stability to the community; having time and money to take care of his health; and being able to travel the world with his family. “Those things take money,” said Rich Dad. “That’s why money is important to me. Money is important, but I don’t want to spend my life working for it.” Rich Dad’s keyword is FREEDOM. How? Robert introduces CASHFLOW Quadrant and tells us that we need to move from the left quadrants (E = employee; S = small business or self-employed) to the right quadrants (B = big business [500 employees]; I = investor). The CASHFLOW Quadrant represents the different methods by which income or money is generated.

This book is divided into Three (3) Parts:

Part 1: The CASHFLOW Quadrant. This part focuses on the core differences between people in the four quadrants. It shows why certain people gravitate to certain quadrants and often get stuck there without realizing it (now I realize it). It will help readers to identify where they are today in the quadrant and where they want to be in 5 years. Chapter #1 Why Don’t You Get a Job?; Chapter #2 Different Quadrants, Different People; Chapter #3 Why People Choose Security over Freedom; Chapter #4 The Three Kinds of Business Systems; Chapter #5 The Five Levels of Investors; and Chapter #6 You Cannot See Money with Your Eyes.

Part 2: Bringing Out the Best in You. This part is about personal change. It’s more about who you have to be, instead of what you have to do. Chapter #7 Becoming Who You Are; Chapter #8 How Do I Get Rich?; and Chapter #9 Be the Bank, Not the Banker.

Part 3: How to Become a Successful B and I. In this last part, Robert explains how to find success on the right side of the CASHFLOW Quadrant. Chapter #10 Take Baby Steps; The Seven (7) Steps to Finding Your Financial Fast Track. Step 1: It’s Time to Mind Your Own Business, Step 2: Take Control of Your Cash Flow, Step 3: Know the Difference Between Risk and Risky, Step 4: Decide What Kind of Investor You Want to Be, Step 5: Seek Mentors, Step 6: Make Disappointment Your Strength, and Step 7: The Power of Faith.

I have to admit that I don’t understand fully what Robert says in this book (although I find out that it was written in the simple language). I don’t understand how tax, mortgage, most investing methods, business systems, even loan, etc. works. This doesn’t bring me down. In fact, it makes me want to learn more. I might be far from financial freedom (but not so far) but I'm determined to learn more and take actions necessary to achieve financial freedom in my life! “Your boss’s job is to give you a job,” reminded Robert, “It’s your job to make yourself rich.”


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