Definition of Cash flow Quadrant and its 5 Parts

Rancakmedia.com – The cash flow quadrant cash flow, proposed by Robert T. Kiyosaki, helps identify a person's financial status and where their income comes from. A person's income can be divided into four categories.

Robert Kiyosaki's mission is to make financial freedom attainable for individuals by exposing them to reporting cash flow. Once a person gains financial independence, they will be able to focus on other interests such as having a career or enjoying time with their family.

The following is the definition of the cash flow quadrant

A writer and investor from the United States named Robert T. Kiyosaki was the person who first coined the term cash flow quadrant.

He wrote the Cash Flow Quadrant Book and became very famous in various countries because of the concepts contained in it explaining professions and finance which are considered to reflect social reality.

The simple goal of this book is to help every individual achieve financial freedom. With the realization of financial freedom, a person has freedom from time and debt, which can be devastating, and is able to run a business that can bring huge profits.

So the cash flow quadrant is simply a chart that depicts how each individual earns income. This cash flow quadrant then has various ways of managing finances, including managing each individual's debts and assets.

Employee Benefits

People who work as employees fall into the E quadrant. For people in this quadrant, the income they earn each person is the same as the income at the previous company (with a stable salary), but their employer does not share the business with them. In this region, people can hold positions as high as the president or CEO of a company.

In looking for a job, people in this quadrant tend to focus on gaining a sense of certainty and security. They rarely think this way: I'm looking for a stable, reliable job with good facilities.

Self-employed

People who own small businesses and do everything themselves operate in the S quadrant. In this case, the money a person makes is directly proportional to the effort or work they do.

If they put more time and effort into it, their income will increase. The less time and effort put into it, the less income it generates.

People like owners small business such as restaurateurs, consultants, and service businesses that provide things like yards and housecleaning inhabit this quadrant.

Cash flow Quadrant, Employee Benefits

They also form this quadrant, just as employees earn a commission on their earnings. Real estate agents, doctors and lawyers, for example. In my discussions with them, they often tell me things like their salary of a few dollars per hour or how much they charge for the job.

People in this quadrant are usually persistent and prefer to tackle their own projects. Many employers think that if you are employed by someone else, you should never be content with working for them, but rather working for yourself. Or, if you want a job with a high perspective, do it yourself.

An Individual Who Owns a Business

Quadrant B consists of business owners who collect revenue but have little personal involvement in the operations of their company. This is what differentiates members of the B and S quadrants: they don't have to take direct action.

Because quadrant B individuals tend to be very large entrepreneurs who have been able to leave their companies in the hands of competent people in the E quadrant, they have the freedom to take short breaks from their work. profit.

On the other hand, S quadrant people tend to get stuck in their career or business and can't get out. In most cases, if an S quadrant group stops functioning, their income stops immediately.

Investors For Me

Quadrant Among people whose income comes from investing in a company, I fall into the quadrant where my income is. People in quadrant I do not need to be as involved in the day-to-day operations of the company as those in quadrant B.

Freedom Financing

Robert Kiyosaki recommends that people interested in monetary freedom should operate in the B or I quadrant. He believes that business owners get financial freedom because they own their own business, whereas people or those who work for the business never do.

To run and manage their business, those in the B and I quadrants have a lot of free time because they employ people from the E and S quadrants. If you want to be free, you better get out of other people's business. That's what he said. Robert Kiyosaki's business does not enter the S quadrant, but instead enters the B quadrant.

He argues that when someone pursues job stability or specializes in a field, they "lose their freedom."

Those of you who want to change your time completely should know that moving from one quadrant to another is a long process. He stressed that guidance is also needed for this quadrant change.

Conclusion:

The cash flow quadrant, proposed by Robert T. Kiyosaki, helps identify a person's financial status. A person's income can be divided into four categories: E, S, B, and I. Once a person gains their financial independence, they will be able to focus on other interests such as having a career or enjoying time with their family.

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