In the first book Rich Dad Poor Dad, Kiyosaki explains the difference between working for corporation and owning a corporation,
the difference between assets and liabilities and how the rich get richer by accumulating assets and poor become poorer because they work hard only to accumulate liabilities.
In this book Cash flow Quadrants, Kiyosaki explains that there are Four Categories or Quadrants of People:-
1. The Employees are people who does not own their businesses and who work for other people to get income.
2. The Self Employed are people who work for themselves. They own a small company or they are professionals for example doctor, lawyer or accountant etc.
3. The Business owners are people who owns companies and they have more than 500 employees who work for them and generate cash flow.
4. The Investors are people who don’t work for money; they invest their money in different investments such as business, real estate, stock market and commodities etc. Their money work for them.
What will You Learn From This Book?
• This book is especially for those people who are currently working as employees or self employed and want to move in the business or investor quadrants.
• It is for people who want to move beyond job security and begin to achieve financial security. It is not an easy journey but the prize at the end is financial freedom.
The book is divided into Three Parts
Part One explains the difference between people in the above written four categories. It will help you identify in which quadrant you are at the present and where you want to be in the future.
Part Two explains why you are not rich already. If you continue doing what you have been doing you will get the same results. To become rich you have to become a different person. You should become able to manage the money wisely before getting the money.
Part Three reveals the seven steps that will make you business owner and a better investor. The seven steps are following:-
1. It is time to mind your own business
2. Take control of your cash flow.
3. Know the difference between risk and risky.
4. Decide what kind of investor you want to be.
5. Seek mentors.
6. Make disappointment your strengths
7. The power of faith
This book will motivate you to move from employee to business owner because employee pay more in taxes. This book reveals how the business owners earn more money and pay less taxes than their employees.
You have to learn the rules and regulations of business and tax laws to pay less in taxes legally.
Kiyosaki says the true measure of wealth is not the money in the bank account but the ability to accumulate the assets that generate cash flow.
Below are written some of the other key points taken from this book.
• Don’t work for money, Work to learn and improve your skills.
• Own your own business instead of working for others.
• Business owners pay less in taxes than employees.
• Invest your time in financial education.
• Investing is risky without proper financial education.
• Find mentors and learn from them.
• Don’t be afraid of making mistakes. Learn from your mistakes.
• Time is your most valuable asset.
Final Thoughts on This Book
Kiyosaki had a mentor, his rich dad who guided him in the journey to financial freedom. I recommend you to read kiyosaki’s first book Rich dad Poor dad first and then read this book. These books will guide you as a mentor in your journey to become financially free.