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Book Summary: Rich Dad’s Cashflow Quadrant – Robert Kiyosaki Lessons

March 21, 2024

Published in 1998, Cashflow Quadrant is Robert Kiyosaki’s follow-up conceptual book to the groundbreaking Rich Dad, Poor Dad released in 1997.

This book explores 4 different kinds of income earners and the various ways they pursue a livelihood – a normal 9-to-5 job, a small business, a commercial system, and investments.

It breaks down his theories in an easy to understand page-turner while inspiring its reader to action.

Kiyosaki’s trademark riveting writing skills remain up for display.

He scrutinizes the mindset of ordinary citizens who’ve been hijacked into following a script for life.

About the Author:

Is any living, breathing human
being in this modern world still unaware who Robert Kiyosaki is?  

For financially responsible young men and women who have taken control of their expenses and researched about the best ways to get out of the rat race, the name Robert Kiyosaki is very familiar.


His original book Rich Dad, Poor Dad seems to be the “gateway” reading material that influences people to consider business or entrepreneurship, any alternative way to make a living that doesn’t force us to trade our precious time for money.  

The prolific writer and financial guru, best known as the brains behind the influential book Rich Dad Poor Dad, Robert Kiyosaki has created a system that’s easy to follow for all the financially challenged people in the world (and there’s a lot of them!) who’ve unleashed their consumer greed and are now broke.

He’s provided a blueprint to get out
of a financial hole, heck even bankruptcy, with applicable money mastery

In this book, he’s challenged accepted, ordinary mindsets about money, and if you force yourself to slog all the way through the end of the book (the book is so enlightening that you’d need a lot of emotional rest breaks along the way), you’d be furious about the way you’d been lied to by society all this time.

Because in fact, Robert Kiyosaki
will show you that work and debt don’t have to enslave you.

Using certain measures, you could harness money and make it work for you so you’re free to pursue whatever makes you happy.

This radical entrepreneur, teacher,
and investor has taught ordinary people techniques they can use to makes change
in their lives and take control of their financial future.

Robert’s teachings often conflict with traditional wisdom, and due to this, he has accumulated an impressive array of haters along the way.

But he pushed on and 26 books later, he is one of the most sough-after inspirational speakers in the world stage.

He remains a passionate campaigner for financial freedom for everyone.

His purpose in writing Cash Flow Quadrant is to provide a guide for people who are ready to make changes in their lives, change from one quadrant to another.

I’m so thankful for radical thinkers like Robert Kiyosaki as these kinds of books satisfy curious minds like mine.

I was on the first quadrant for a few years of my life, earning my meager paycheck like a faithful little office drone. 

I made just enough to afford an apartment, a basic car, meager groceries, and some designer shoes from the discount bin.

Then I stumbled on to something even better: a mentor who shook me from my puny existence and showed me another side to life.

A mentor who taught me skills to reach my financial goals.

Excited to change my quadrant, I signed up for a coaching program that taught me to build responsive websites, ranking them and attracting customer leads, which I then funneled to small local business owners who paid me for my services.

I’ve been unstoppable ever since, earning 6 figures and meeting so many go-getters who are ranking and banking their own digital marketing agencies.

You’d be amazed how easy it is to make a living doing what I do.

Rich Dad’s Cashflow Quadrant – An Introduction

Most ordinary people have been brainwashed with the “script.”

Go to school.

Get a job. Grind away for 25 years
or more.

Save money.

Retire with a pension.

We’ve heard this advice again and
again growing up. It’s been drilled into our system so much that it’s literally
the script we follow for the rest of our lives.

But is it the only way to live? Are
we born only to pay bills and eke out some pleasure during weekends?

In his book the Cashflow Quadrant, Robert Kiyosaki breaks down
people into four categories based on their financial intelligence and need for

Categories of People:

One: Employee

who belong to this quadrant work for a company and is dependent on their jobs
for income. This is the most populated quadrant and least compensated.

if you’re an employee, you have practically no tax breaks left and is a 50-50
partner with the government.

That means for every dollar you earn, Uncle Sam is entitled to 50 cents, and he makes sure you turn it over even before you grab a hold of your paycheck.

Sounds unfair,

we all know Uncle Sam, or the U.S. government is traditionally very fiscally responsible
with taxpayer’s money.

That was clearly a joke.  

An employee typically craves security and is risk-averse. They devote most of their waking hours working to benefit their company and would be seriously broke if that company goes bankrupt or shuts down.

It is a
safe bet to assume that 99% of able adults in the world have been an employee at
one time in their lives.

Two: Self-Employed

This is a very rewarding but one of the riskiest quadrant.

This is the gateway quadrant to business ownership and eventually, being an investor.

You will set up your own company either selling products or services and formulate strategies to make sure you attract enough clients in exchange for payment.

you will need to devote a lot of time and effort, work hard and long hours
beyond what a typical employee gives to his own company.

You will
be responsible for every position in a company, a jack-of-all-trades. You will
have a few tax privileges that are not available to employees.

You can
charge your “home office” where you typically do your work against taxes. It’s
only a slightly better proposition than being raped by the IRS as a fulltime

Compared to an employee, a self-employed person can at least spend the day without constant harassment by a supervision watching his every move.

The cons: you still pay high taxes and you depend on the favors of your clients.

Quadrant Three: Business Owner

The third quadrant is composed of business owners, hardworking
pioneers who have leveraged their skills and transformed their ideas into
actual business systems.

Business owners can hire employees to work their
systems and have distinct advantages – flexibility, tax breaks, stimulating
leadership roles rather than holding down a soul-sucking repetitive job.

They can write off business expenses such as
internet, home office, cellular plans, which translates to more cash to plow
back into the business.

More importantly, once successful, they can sell your
business for millions and swagger on to the Investor quadrant, but there’s a
risk you might lose all your money without adequate preparation.

You need experience and education. There is a science to business and leadership and constant exposure/education will direct you to the best practices.

Quadrant Four: Investor

Investors are
the rock stars of financial security, possessing the highest amount of skills they
can use to convert leads into lucrative business opportunities, or cold hard

Investors know
how to make their money work for them by placing them in secure real estate investments,
savings, bonds and other forms of financial vehicles that regularly spit out dividends.

Their long-term aim is to accumulate so much money that they can forget about working and just live off their savings or, even better, the interest dividends from their investments.

The essence of Kiyosaki’s original book Rich Dad, Poor Dad boils down to encouraging people who are currently stuck on the Employee and Self-Employed quadrants to work hard and take steps, so they eventually make it to the Investors quadrant.  

Every person can
create a budget, start saving money and take that first step to financial

It is notable to
read that Kiyosaki states several times in Cashflow Quadrant that true investors
pull in the dollars even in bad markets.

7 Levels of Investors

Level 0: The
broke ones who have $0.00 to invest. They spend more than they make. Sadly, 50%
of the adult population belong here.

Level 1: The borrowers. Invest with borrowed money, robbing Peter to pay Paul. Their level of debt is high compared to their income so in turn, they have very low credit scores. They splurge on name brand, luxury items to “fake rich” their lifestyle but max out their credit cards and may not even afford to pay on time.

Level 2: Savers.
They put aside a small amount of money for low-yield investment vehicles like a
savings account or a certificate of deposit (CD).

They save to consume rather than to invest. They like the security of money in the bank but waste time trying to save pennies.

They hold on to deep insecurities about money.

Level 3: Smart investors. More educated about the need to invest, usually plopping down their cash on outside investments or mutual bonds.

They are usually intelligent people with solid education. Two-thirds of the middle class are smart investors but lack sophisticated financial literacy.

There are 3 subcategories
under Level 3:

  • Investors who can’t be bothered
  • The “cynics” – usually very negative and pretend to
    know a lot about investing but are cowards deep inside. Security is more important
    than fun. They don’t secure much profit in their investments because they buy
    high and sell low.
  • The “gamblers.” As the name connotes, he’s not
    cautious enough and chases that adrenaline high of trading without adequately
    researching about the stock. Follows no set trading rules and loses a huge
    chunk of cash from impulsive buys.

Level 4: Long-term
Investors. This group have clearly laid out long-term plans that will allow
them to reach objectives. They are smart and know the value of financial education.
They seek out advice from competent financial planners.

Level 5: Sophisticated Investors – usually have substantial financial education and successful record of profiting from their investments.

They’re not afraid to chase down potentially winning transactions aggressively.  

Level 6:
Capitalists – the pinnacle of financial literacy, true capitalists have
accumulated knowledge and resources. These are usually people who create large-scale
investment opportunities and sell them to the market.

Thomas J. Watson, Jr., second president of IBM, is considered by Fortune magazine to be the greatest capitalists of the modern age.

Under his leadership, IBM’s stock rose up $36 billion higher than what it was worth 15 years earlier.

7 Takeaways from Cashflow Quadrant:

Educate yourself
rather than clinging to job security.

Choose self-improvement
over ego.

Your boss can’t
make you rich; his only job is to make sure you receive a paycheck.

You alone can
bring yourself to financial freedom.

Develop excellent leadership

Foster a good business sense.

Own a system and have people work
that system for you.

The Parable of Ed and Bill

Kiyosaki has a captivating writing style that uses memorable characters to bring his ideas to life, capturing his readers’ attention.  

There was an unnamed village somewhere
which doesn’t have its own source of water, so the village elders accepted
contracts for any member of the public who can deliver water to the village daily.

The first contractor was Ed. He had
two buckets and immediately started hauling buckets of water from the neighboring

Ed gets up early every day to
make sure the village gets enough water.

Bill accepted the contract too,
but he was nowhere in sight during the first few months, which tickled Ed
because he had no competition.

But Bill had a trick up his
sleeve. He was busy writing a business plan.  

Bill built a pipeline that streamed the water directly to the village from its lake reservoir.

His water was cleaner, cheaper, and supplied the village with water 24 hours a day, 7 days a week. The villagers flocked to buy water from Bill.

His bank account got fat, and he
grew financially free.

Moral lesson: Create a pipeline to wealth rather than
hauling buckets.

The Verdict: 

Just ‘cause we
know you’re going to ask: YES! This book is definitely a must-read.

If you have no time to read through the whole book, just study the Cashflow Quadrant (illustrated square) and remember that you need to find a way to get out of the left side of the square and plant yourself immovably on the right side, where all the fun and the action is.

Make sure no malevolent forces move you away from the right quadrant, not even hellfire missiles.

Dig deep.

Of course there will always be haters who remain skeptical of Kiyosaki’s claims about his rich dad, which they argue is merely a non-existent trope.

So what if there’s no rich dad? At least the character is an effective tool used by Kiyosaki to teach hi readers important life-changing lessons about fiscal responsibility and preparing for retirement.

Are you just okay being an employee forever?

If you said yes,
then you must be working for Mother Teresa (God rest her soul). But we thought
there are no more martyrs left on earth.

If you said yes, then that’s like saying you’re okay with sacrificing your time and your energy making somebody else rich.

Working hard to make some other person’s dreams come true.

Are you that magnanimous? What about your own dreams?

Let’s admit it:  working for a corporation can be soul-sucking
at times. You must do the same job over and over at not-so-great pay rates.

If you get
promoted to a management position, whoop-de-doo! Good for you!

Now you have to
do your job plus the thankless work of managing burned-out, depressed employees
who now resent you for getting promoted over them.

reading Cashflow, you’d be enlightened about why some people get rich while
others remain broke all their life.

Cashflow Quadrant doesn’t teach you anything else, at least it would light a
fire in you to do everything in your power to break out of the left side of the
quadrant, where the poor Employees and the overworked Self-employed reside, to
the right side – the BEST SIDE.

Business owners and investors guzzle Cristal and munch
on foie gras stuffed pastry on the right side of the quadrant.

wouldn’t want to party with the right-siders?

that you could still get rich working in any quadrant, but it’s harder and
takes more time when you’re on the left side of the quadrant.

shift now!

If you’re reading this book, then I
can safely assume you’re still slaving away on the left side of the cashflow

 You derive your income from a monthly salary oryour company’s net income.

Do you want to stay where you’re at now?

Do you want to make your parents happy by staying in a traditional job and getting a regular paycheck bi-weekly, perhaps earn $0.35/hour raise every few years?

Then be content with being on the left side of the quadrant,
your current location on the financial map.

However, if there’s a fire burning inside you and you crave
more money than what you’re getting now, work hard to bust out of the “lefty.”

Train yourself in financial tradecraft.

You need massive action to change your life and your mindset.

Attend trainings/seminars on how to successfully set up a business
and go hard at it.

Learn to step outside your comfort zone and face temporary
financial insecurity for the promise of financial independence later.

You can’t feel real freedom if you remain shackled to a job,
trading 8 hours of your life for a company position where you’re just one of
the faceless office drones, expandable.


With more money, you can add more pleasure to life.

Obtain income-generating skills. 

I was fresh out of college and knee-deep in the left side of
the quadrant 4 years ago.

Two years into my job and I was already itching to find a way
to earn more so I can pursue what I really enjoy doing.

By some twist of fate, I read an ad for a coaching program while
checking FB one morning.

I couldn’t help myself. I clicked on the link.

It’s been a helluva high of wins after an excruciating year of growing pains during my learning curve, but I wouldn’t trade those lonely months of video bingeing the program night after night, when I arrive home after work.

That lonely period of learning was necessary for me to grow into the smart businessman I am now.

I’ve transcended the planes of mediocrity.

I have migrated from the paltry left side of the quadrant to
the action-packed Business Owner quadrant.

But it doesn’t stop there. Every day, I’m learning more
techniques on how to make my money work for me.

I belong to 2 quadrants now: the Business Owner and the Investor

All these skills I learned in the coaching program were never
taught in school.

In fact, I observed that most of the successful fellow
entrepreneurs I met through the program never sought higher education beyond a
bachelor’s degree.

They schooled themselves on the degree that really matters:

Real education begins beyond the school grounds.

That piece of paper you hold in your hand, that diploma, it won’t
assure your success.

Only hard work and an excellent business coaching program will.

The rules are so different when I moved to the right quadrant.

Educate yourself on the concepts that really matter, not on ephemeral subjects that have little marketable value (I’m looking at you, Gender Studies majors).

Last, find a mentor that really cares. A selfless guru that teaches you everything he’s learned during his own journey.

“I Want You to Learn the Strategies I Use to Rake in Over $50K/mo Passive Income Generating Leads for Small Businesses in 2024.”

I would be forever thankful to Mark Zuckerberg for creating Facebook.

Through his news feed feature, I discovered a coaching program that delivered on everything it’s promised.

FB, I met a wonderful adviser, Dan, who taught me real, marketable skills which
I used to build my own successful digital empire.

Please allow me the opportunity to tell you the story of my journey from Broke to Boss.

I want you to join me as we party it up in this quadrant, where there’s no overbearing supervisors breathing down your neck demanding that you produce more, more, more so your CEO can buy his third vacation home.

Be the weird one.
Break the mold. Don’t be an office drone forever.

I recently broke $50K per month and to reward myself, I invested in a loft condo in my hometown of Detroit, Michigan.

I continue to grind away at my lead generation business from the comfort of my condo, with the view of downtown Detroit in front of my laptop.

I started from the left side (Employee), now I’m here.

Take a look at the very first lead generation website I built in 2014. I haven’t touched that ever since but it keeps earning $750 per month on autopilot.

If you want to be on the RIGHT side of the quadrant counting your dollar bills, sign up for our elite local lead generation coaching program now!

We run a very active community of digital entrepreneurs who are guided as they build their websites, step by step.

Some of them are already skilled in SEO (search engine optimization) and the internet while majority are people who don’t have any experience in computer crafts except checking their emails

What is evident though is that everyone in our coaching program have a curious mind and is eager to learn.

Will you be our 3,880th member?

Why Codie Sanches Thinks Robert Kiyosaki Is Wrong? 

  1. Overemphasis on Tax Status: Codie argues that Robert focuses too much on the tax status of individuals (employees and business owners) rather than on their actual financial strategies and investment knowledge.
  2. Over-Simplified View of Wealth Building: Robert Kiyosaki’s cash flow quadrant concept is an overly simplistic way of understanding wealth building. Achieving financial freedom involves more complex factors than just moving from being an employee to an investor.

  3. Underestimating Employee Potential: Robert Kiyosaki’s approach undervalues the potential of employees to achieve significant financial success. Codie points out that many billionaires are employees who have succeeded financially because of their strategic investment decisions, and not just their employment status.

  4. Neglecting the Importance of Financial Literacy: Financial literacy and strategic investment are crucial to financial freedom. Codie believes these aspects should have been covered in the Cashflow Quantrant. 

  5. Lack of Nuance in Investment Strategy: Cashflow Quadrant doesn’t fully address the complexities and nuances of modern investment strategies. It also doesn’t cover modern investment strategies like crypto and blockchain investing, as well as other digital business models. 

Why Lead Generation Business is the Wave of the Future

Robert Kiyosaki's Cashflow Quadrant may offer some insights on wealth-building. However, his business models may be outdated and could lack essential strategies that adapt to the modern business landscape. Building wealth is more than just having the right mindset. You need a stable business model that generates income on autopilot and will remain profitable in the future. 

My number 1 business recommendation is local lead generation. This biz builds digital assets and ranks them on Google. Ranked digital assets are like billboards in prime locations in the physical world. Modern investments like these don't need as much time and effort to maintain compared to traditional businesses. If your goal is to build wealth and achieve financial freedom, local lead generation is the best way to do it. I have been doing local lead gen since 2014. Almost a decade later, I am still making $52K monthly from the digital assets I built and ranked on Google. 

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Ippei Kanehara

$52K per month providing lead generation services to small businesses is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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