Rich Dad's CASHFLOW Quadrant

SEVEN STEPS to finding financial fast track

1. Mind your own business: 5 year goals and with the goals to develop the IC/BS: what should they look like

2. Take control of your cash flow: 2 books of IC/BSà have other pay debt, pay yourself first (invest saving for asset); Cash Flow management plan

3. Know the difference b/w risk and risky: define Asset/Liability-> see the cash flow, only cash inflow should be seen as asset, anything out of you pocket is liability

• financial intelligence: the ability to convert cash/labor into asset that provides cash flow
• investing is not risky, being under educated and misinformed is risky
• committed to your financial education: business news, wall street journal, educational CD magazine, play game, etc.

4. What kind of investor you want to be

• investor types: looking for answers/looking for solving problem/know nothing
• wealth is built at how better/faster you can solve the problems from B/I perspectives
• leaning how to build business first, and the experience, personal skills, cash flow
• being 3 types of investor at the same time
• become an expert at solving a certain type of problems (opportunity) and continue seeking solving the bigger problem
• just mind your own business, take control of your cash flow, and change yourself to take the advantage
• educated in Investing: start baby steps
• educated in Business: learn by asking questions; network mkting to learn system; franchise/ trade expo opportunity; business news and magazine

5. Seek mentor

• person who can tells you what’s important
• someone who have been there: business/investing model; revert model
• focus on passive income and asset
• caution the people around you every day: who you spend most of time with is your future (list those people, which quadrant they belongs to, which investor levels they are in)

6. Make disappointment your strength

• expect to be disappointed: make mistake; put a little money down; take action
• have mentor to stand by
• be kind to yourself
• tell the truth

7. The power of faith

• very aware of your words!! What you response to yourself
• you are the only person that determines the thoughts you choose to believe about yourself

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Part I - The CASHFLOW Quadrant. Maps out the E/S/B/I Quadrant to explain how Employees, Self-employed, Business Owners, and Investors think and behave differently.

• BRAIN: you become what you see about how/what others are doing
• Change: breaking an addiction/pattern; never work for money -> learn to create your own systems in a way of acquired money
• ESBI: reflect how people response to the need of money differently, how they solve the problem differently
• Security vs. Freedom: who you no longer are (stop doing); keep flame in your heart going; it’s passion that builds business not fears; change of mind-set

Part II - Bringing Out The Best In You. Talks about how "Money is a drug." And how "A diet will not help if your thoughts do not change."

• Make serious effort to move to right quadrant (B/I)
• Figure out who is taking away your money and how you can keep the money
• What you do in your spare time set apart the rich people and poor people
• Work hard to B/I, not E/S
• E -> B ->I: being B to learn from experience, and understanding of cash flow to better know how to invest
• Systems: get from 1) C corporate 2) Franchise 3) Network marketing
• Find a mentor
• When being E, get the fast rack to go up corporate ladder and learn the system
• Franchise (system): have more time to develop people
• Invested in the approved system with people who know how to run it
• Network mkting (multi level mkting, direct distribution systems): buy in the existing system and build business
• overcome the feat of being rejected; stop worrying what other people say about you; don’t be afraid to do something differently -> that’s what you think about yourself is more important 2) to learn to lead people; working with different people -> the ability to get along and inspire people

• Network mkting: look at the system, learning program, mentor availability to train to become B if only look at project, you are just S
• Master of WORDS (words is the reflection of people’s value, thoughts, soul)-> use their words to communicate effectively “hear their words, feels their souls”
• Change the quadrant: change who you are; how you see the world
• That’s what people FEAR makes people different
• S owns a job; B owns the system and competent people 1) ownership/controls of systems 2) the ability to lead people
• System (big picture) is more important product. e.g. McDonald
• Don’t avoid risks; rather learn to manage risks
• Financial freedom doesn’t require education money, but dreams, desire/determination, and overcome disappointment
• Investor welcomes volatility, which make you rich
• How much you keep matters
• Build a system around your passion
• “How you think” needs to change, it’s how you have to “be” in order to “do” what needs to be done
• The logic of ["To do" -> "being"] is wrong-> think of “being” first, change your thoughts first
• Mentality of changing the person is wrong you have to change your thoughts about the person
• “Money” is emotional subject
• Emotion vs. Ration: pay attention to the internal conversation; have rationality do the thinking, not emotion! Grow up financially! Don’t “feel like”… but what you “should” do to get there
• The importance of understanding of economic history; read Capitalism; “economy changes, but history repeats”
• Debt: if debt personally, make sure it’s small; if others, make sure other pays it
• “comprehensively business sense”
• Start small and take time to learn experience
• Think and have the courage to do things differently
• Understand market forces and laws. Wealth occurs when they change
• Different ways to play the game; STOP being what you have been being
• Seeking competent advice: be careful to distinguish it is for rich/poor/middle class

Part III - How To Be A Successful "B" and "I" Presents "THE 7 STEPS TO FINDING YOUR FINANCIAL FAST TRACK" which illustrates exactly how to take control of your mind and your financial freedom.

• Baby steps
• Mental/emotional/physical learning for financial/system/emotional intelligence
• HOW 1) maintain long term vision and plan 2) believe in delayed gratification 3) use the power of compounding (learning): no quick answers to long-term wealth; dream big, think long-term, have underachieve on daily basis, take baby steps
• It’s information generates money, not work hard; only work hard to and smart in B/I