Author Topic: Rich dad / poor dad: Cash Flow Quadrant  (Read 6861 times)

FireYourJob

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Rich dad / poor dad: Cash Flow Quadrant
« on: June 27, 2014, 08:22:21 PM »
Anyone read this book?

Did it help you generate any additional cash flow?

Would you recommend reading it?

Please share any learnings and how it may have driven any change in your approach to cash flow.

Mississippi Mudstache

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #1 on: June 27, 2014, 08:47:00 PM »
Read it maybe 5 years ago. I had a tough time getting anything out of it because I couldn't get past the hollowness of the writing and the douchiness of the author. There's nothing you can get from the book that you can't get from MMM.

brewer12345

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #2 on: June 27, 2014, 10:27:54 PM »
Kiyosucki is a sleazebag scamster.  Run.

arebelspy

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #3 on: June 27, 2014, 10:35:22 PM »
I've read it.  It's the best of his books, which may not be saying much.

It doesn't generate you any cash flow.  The cash flow quadrant is just where your money comes from: worker, self employed, income from a business, or investment income.

You can google and read a summary or Wikipedia and I'm sure that would be good enough.

It doesn't help you at all with generating cash flow, as per your questions. I think you have the wrong idea about what it's about.
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The Hamster

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #4 on: June 28, 2014, 03:14:28 AM »
I used to play his game Cashflow 101 which was fun at the early stages of the game (the Rat Race).  Funnily enough, it always got boring once you got out of the rat race and started making billion dollar deals every throw of the dice. 

ambimammular

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #5 on: June 28, 2014, 07:51:02 AM »
I used to play his game Cashflow 101 which was fun at the early stages of the game (the Rat Race).  Funnily enough, it always got boring once you got out of the rat race and started making billion dollar deals every throw of the dice.

Cracks me up that someone named The Hamster enjoyed the rat race. I haven't had my coffee yet.

Wildflame

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #6 on: June 29, 2014, 02:58:43 AM »
My Dad had that game. Good fun, actually, and my first real introduction to the idea of wealth accumulation as being something anybody could do rather than purely being the result of having rich parents or a job paying a squillion a year.

I have read Cashflow Quadrant and Rich Dad, Poor Dad. It did not help me (or my Dad for that matter) earn additional cashflow, and I cannot recommend reading it because the concept is very simple. This may not be 100%, I last read it probably a decade ago.

There are four quadrants:

E  | B
__|__
   |
S  | I

You are placed in a quadrant based on what your primary source of income is.

Quadrants on the left are where your income is dependent on your labour:
E is for Employee (paid by somebody else, your labour earns all the money)
S is for Self-Employed (technically paid by yourself, but all your income still comes from your labour)

Quadrants on the right are where your income is dependent on someone else's labour:
B is for Business Owner (you operate a business, but you have employees who do the gruntwork)
I is for Investor (you own businesses, but do not manage them. Both management and employees work for you)

The objective is to get to I - Investor. Because when your income is no longer dependent on your labour (or your management in the case of B) you are rich.

Sound familiar?

The rest of the book goes on to explain that the best way to get to I is through B, so the objective is to move from either E or S to B, and by building up a strong business, generate cash that you can use to buy businesses and become I.

This is definitely an effective way to go about it. However, it presumes an entrepreneurial spirit, a risk-seeking mentality, and sufficient financial resources to start a business and survive while you go about making it profitable. I don't recall the exact examples given in the book, but judging by Rich Dad, Poor Dad, his focus is probably on buying and improving rental property.

Either way, you don't really need to go through B, it's just the fastest way. You can go through E or S. Note that the Mustachian approach of cutting expenses and investing the surplus is pretty much exactly how an E or S gets to I - save the surplus, invest it, and repeat until the stash is big enough.

The theory of getting rich really is pretty simple, and has been done to death and beyond by probably a hundred personal finance books every year. The latest one I read was "The Millionaire Fastlane". Concept? Simple: there's two ways to get rich. The 'Slowlane', in which a person works as a wage slave, saves the excess, and eventually has enough to live off. The 'Fastlane', in which a person starts a business which earns enough cash to live off, and then either makes it run with minimal oversight or sells it and invests the proceeds. Sound familiar? The best part of that book were the rules of a Fastlane business, which boil down to making something valuable that you can either sell to a lot of people, or sell to a few people for a lot of money. Oh, and make the business as automated as possible.

If you have cut expenses as far as you are comfortable going but you still want to reach FI sooner? Add extra cash by getting a side hustle or getting a better paying job. I'll address that in the other thread.

arebelspy

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #7 on: June 29, 2014, 10:35:58 AM »
Great summary Wildflame, thanks.

Almost all those books are terrible, and I don't read them, but Millionaire Fastlane was legitimate.  If I wanted to get super rich (say, mid-eight to nine figures), it'd be my bible.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Nords

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #8 on: June 29, 2014, 01:13:54 PM »
Almost all those books are terrible, and I don't read them, but Millionaire Fastlane was legitimate.
Yet, paradoxically, it's not available in our state library system...

I'm impressed with the author's ability to rake in the social proof.  487 Amazon five-star reviews vs 18 one-star reviews is not easily accomplished.

greaper007

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #9 on: June 30, 2014, 11:36:56 PM »
Funny, I was just reading this book and put it down because I found the lack of substance frustrating.    He tends to repeat himself over and over again without giving concrete details about how to create businesses or invest.    Just that you should.

Glad that I wasn't the only one.

wtjbatman

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #10 on: July 01, 2014, 12:26:34 AM »

There are four quadrants:


There. Are. FOUR. Lights.

Jags4186

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Re: Rich dad / poor dad: Cash Flow Quadrant
« Reply #11 on: July 02, 2014, 03:45:02 PM »