Have you heard about the book Rich
Dad Poor Dad by Robert Kiyosaki?
See, in this book, he introduces the
Cashflow Quadrants.
So, what is it and how
do you use it?
That's what we're going to talk
about today.
Robert Kiyosaki introduced the
Cashflow Quadrant in his
book Rich Dad Poor Dad.
By the way, have you read the book
Rich Dad Poor Dad?
If you have, type in a 'yes'
in the comments, and if not, just
say 'not yet'.
And I highly recommend that you're
reading it. So, what is it about
this cash flow quadrant that
is in the book? Well, Robert
Kiyosaki says that we all
fall into one of these
four quadrants.
We are either E, where
we are employed,
meaning that we exchange time
for money, which by the way, is
the worst thing that you
can do, right?
Being employed means that you
are making somebody else
rich. Don't get me wrong, it's a
good way to get started.
This is how I got started.
I used to work for IBM,
as you know, and it's a good
way to make some money
to move into one of the other
quadrants. But let's talk about the
other quadrants.
S means that you are self-employed,
and this means that you don't have a
job. Actually, it kind
of means that now you
are no longer making
somebody else rich, that now you're
working for yourself.
But let's be honest, for those of
you who are self-employed, how many
of you can really take a six-week
vacation and your business is
running without you?
Often being self-employed just
means that you're working the same
hours as being employed, or even
longer hours, right, and
you are your business.
When you don't work, you don't
make any money.
This is where Robert Kiyosaki
says on this side, it is
all about active
income. You don't work,
you don't make any money.
The idea here is to move
to the other side of the quadrant.
This is B which
means that you're owning a big
business, that you have employees,
that you have a team, that you have
systems that are working
hard for you.
And it is always the dream of
somebody who is in the S quadrant,
right, to move into the
B quadrant.
But as we all know, it is not
that easy, and
most business owner get
stuck in the S quadrant where they
still produce active income.
On this side here, we are talking
about passive income,
and building a business
that actually produces money for
you is one way to do this.
The last quadrant that you see here
is I and I means
that you are an investor.
Investor means that you have money
working hard for you.
And this is what really attracted
me. When I still worked at IBM
and I was an employee, I realized
that if I am not rich,
I am making somebody else rich.
I wanted to move as quickly
as possible from the E
quadrant into
the I quadrant, where I have money
working hard for you.
What does it mean being in the I
quadrant?
It simply means that now you
find a way to invest
money that it produces a return
for you.
And for me, there's only two ways
how you can do this.
One of them is obviously
trading. Trading stocks and options.
And the other way, for me, is
investing in real estate.
Now, I'm doing both and trading
is my favorite way to
generate an income, and have money
working hard for me, and here's why.
When trading, you don't have
to deal with tenants, and blown
water heaters, and AC's,
and also, if you're new
to this whole game of generating
an income with money, when
trading you can get started with
only $10,000.
These days, if you want to invest
in real estate, you need to put 20%
down, and if you have a
$200,000 investment opportunity,
right, which is possible maybe
here in Texas and maybe in Florida,
but in other parts of our country,
it's not. Anyhow, if you just want
to buy one home for
$200,000, it means that you have to
bring $40,000 to
the table. Now, I own two apartment
complexes that I bought for 2.8
and 2.3 million dollars so combined
5.1 million dollars.
Now, right now, I am
selling them. They are on the market
for 9 million dollars, so of
course, this is where money is
working hard for me, where money
produces money for me, but trust me,
I have been trying to sell these
apartment complexes since probably
November last year.
So, when doing it...
Stocks, right? I mean, this morning
I sold BOOT.
We talked about this, right?
I mean, it was one of the stocks
that I wanted to sell, and it was
really easy.
Boom! Of just selling it, right?
So, this is why, as
you can see, even though
I am making millions investing
in real estate, I prefer
trading stocks because it is
much more flexible, and for me
personally, it gives me more
control and less dependency
on others.
The idea here is if you don't
find a way to make money
while you sleep, you will work
until you die.
So, this is why
I highly recommend that you find
a way to go from where
ever you are in this quadrant,
especially if you
are on the left
side here, right here
on the left side.
So, if you are still
employed, find a way
to have money working hard
for you, and for me personally,
I believe the best way to get
started is trading
stocks and options because
there's only three ways
that you need to know when
trading stocks and options.
First is what to trade, right?
And this is where again, I have a
software that makes it easy for me
to know exactly what
stock I should trade.
It's called Power X Analyzer.
If you're interested in this, and
would like to learn more, please go
to mytradingroutine.com.
That is a website where I explain in
detail of how I find
the best stocks to trade.
When to enter because that's the
second thing that you need to know.
When exactly do you
buy? And I personally like
to use three indicators.
It's the RSI, Stochastics and MACD.
And again, if you're interested in
learning more,
go to mytradingroutine.com.
And the last thing that you need to
know when trading stocks and options
is when to exit,
right? When to exit with a profit
or when to exit with a loss.
So, these are the only three things
and compared to investing in real
estate, that, to me,
sounds much easier.
It sounds much more doable,
especially if you're new to
trading, and if you're a beginner.
Find a way to get
started somehow.
If you don't find a way to make
money while you sleep, you'll work
until you die.
And I believe that Robert Kiyosaki's
Cashflow Quadrant is a great
illustration on how to
do this. Was this helpful?
If so, please, leave a comment,
and let me know if this was helpful,
and I am looking at all the
comments. I will make sure that I
answer your comments in writing over
the next day or two.
So, I appreciate all your comments
and please feel free to share
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