Better Mondays Ep. 1 – The Cashflow Quadrant


In this episode, I talk about a useful concept that I share with all clients early on in our coaching relationships.ย The Cashflow Quadrant, a concept taught by Robert Kiyosaki, can completely change the way we think about wealth creation and the path to financial independence. Anyone can learn to navigate this quadrant and this is one of the most empowering topics that I explore with my coaching clients.

This concept is divided into four areas.

The E and S quadrants on the left side represent earning ๐š๐œ๐ญ๐ข๐ฏ๐ž ๐ข๐ง๐œ๐จ๐ฆ๐ž โ€“ in order to make money you must perform something. Use your time to make money. (90% of people and 10% of wealth reside here).

The B and I quadrants on the right side represent earning ๐ฉ๐š๐ฌ๐ฌ๐ข๐ฏ๐ž ๐ข๐ง๐œ๐จ๐ฆ๐ž โ€“ you do not have to be present to generate income. Use your money (savings and investments) to make moneyโ€ฆ and some of your time. (10% of people and 90% of wealth reside here).

โ–บ ๐„ โ€“ ๐„๐ฆ๐ฉ๐ฅ๐จ๐ฒ๐ž๐ž:ย You work for a company and trade your time for money. If you donโ€™t work, you donโ€™t make any money.

โ–บ ๐’ โ€“ ๐’๐ž๐ฅ๐Ÿ ๐„๐ฆ๐ฉ๐ฅ๐จ๐ฒ๐ž๐: One step toward autonomy/flexibility/control of pay rate/control of work hours, compared to an employee, but you are still trading time for money. You own your business, but still trading time for money mostly.

โ–บ ๐ โ€“ ๐๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐Ž๐ฐ๐ง๐ž๐ซ: A business implies you have a system in place โ€“ you have others work for you. You arenโ€™t trading your time for money, but rather selling a product or service. When set up ideally, you donโ€™t have to be working for the business to generate income. Partial freedom of time. Your money makes money.

โ–บ ๐ˆ โ€“ ๐ˆ๐ง๐ฏ๐ž๐ฌ๐ญ๐จ๐ซ: This is where you truly have passive income. Investments like real estate generate an annual cashflow. These are the investments that will allow you to retire. Freedom of time. Your money makes money.

Our tax system is designed to favor large businesses (B) and investors (I). These are also the areas where maximum autonomy and freedom can be found, which in turn opens the door to the ability to pursue our dream life.

During this episode, I discuss each quadrant in terms of TIME (how much time you have to put into the task to earn money) and MONEY (how much money you have to invest into the task to earn money).ย  TIME and MONEY, specifically how much your money earns you (known as the return on money) are the two key decision points that you control as the CEO of your life that will directly impact the quality of your life, how much you enjoy your days, and the rate at which your savings grows on the path toward Financial independence.