The basic premise of the Rich Dad book series, Poor Dad is that the business world consists of mostly 4 types of individuals:
1. Employee (E) – has a job.
2. Self-employed (S) – has a job.
3. Business Owner (B) – has a business system.
4. Investors (I) – make money work for them.
Rich Dad Poor Dad Guide tells the story of a boy with two fathers, one rich, one poor, to help you develop the mindset and financial knowledge you need to build a life of wealth and freedom.
The identification of where you are in this cash flow quadrant can largely be determined from where a large portion of your income comes from. What influences the quadrant where we decide to generate income is due to internal differences in core values, interests, views, life stages, etc.
We can actually earn from each of these 4 quadrants simultaneously if we choose, but most of your income is likely to come from one quadrant. While financial security can be found in each of the 4 quadrants, the skills and tools needed and acquired in the 'B' or 'I' quadrant will help you achieve financial freedom faster.
Traditional schools teach us mostly to focus on being employees (E) or high-paying Entrepreneurs (S) such as doctors, lawyers, or accountants.
80% of start-ups never celebrate their 5th birthday. And of those who have become successful, many successful "B" have lost their money through overly secretive robberies in the "I" quadrant. The road to financial freedom is filled with victims and people returning to their destinations out of fear.
In short, the rules of the game are very different in each quadrant. They are a completely different world and need different mindsets, tools, skills, and behaviors. Continuous learning and education will be your constant sleep companions to help you on this journey through each quadrant.