Cashflow Quadrant

Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide to Financial Freedom

By Robert T. Kiyosaki

Highlights

I read this 322 page cashflow.pdf in July 2020 and took screenshots on my phone of the highlights and my key learnings to trim down the content to share. The PDF viewer below is <60% as many pages and most are a subset of each page zoomed in on the key learning. I merged them all together for you to accelerate your learning.

I recommend skimming through it to look at all the pictures and pay attention to where he describes money flowing. For example when you buy a house to live in, your balance sheet has a liability called your mortgage and your income statement has expenses including your mortgage interest. Meanwhile, your bank’s financial statement has an asset on their balance sheet called your mortgage and their income statement has income including your mortgage interest.

These cashflow diagrams are helpful to understand the four quadrants and how money flows in different ways. It makes you aware of opportunities to transition from the left side (employee or self-employed) to the right side (business owner or investor). After skimming through the diagrams and headings, if you have time to invest and want to learn more, your future cashflow will benefit from going back through my highlights to read more in the most intriguing sections.

Be. Do. Have.

Speaking of investing, here is an anonymized list of financial advice from more than a dozen of my “smart money guy” friends Re: Advice for College Freshman to Learn About Investing? (and intro to investing resources). Disclaimer: I am not a financial advisor and none of this advice was given as official legal financial advice. You learn the best you can and make your own decisions. I have learned SO MUCH as a result of their advice and continued readings they recommended to transform my financial life and increase my pace on the path to financial peace this year.

I read the Richest Man in Babylon, wrote this book summary, and learned the key principle that part of all you earn is yours to keep. You need to take 10% of all you earn and pay yourself first. Ever since March, I take 10% of each paycheck or additional income and invest it into my Charles Schwab investment account. Part of earning additional income is making sure you make your gold multiply.

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