What I Learned from CASHFLOW QUADRANT

After finally reading "Rich Dad Poor Dad" I was psyched to read the next book, "Cashflow Quadrant." My husband and I had already signed up for a 3 day seminar that was fast approaching and I wanted to learn as much as I could before I went so I would understand what people were talking about. It took me two steadfast days, but I got it read, and these are some of the things I learned.

1. There are four main types of people out there: Employee's, Self-Employed, Business wners, and Investors. Of those four Employee's and Sefl-Employed work for their money, while Business Owners and Inverstors have their money work for them. Most people are the E's and S's (Empolyees/Self-Employed). The rich are the B's and I's (Business Owners/Investors).

Employess: People who have a job, a boss, and work for a paycheck. This is the majorityof people.

Self-Employed: People who go into business for themselves, may have some people under them, but they still work for their money. This can comprise of lawyers, doctors, consultants, small business owners, etc. If they left their business for a year
it would probably crumble.

Business Owners: People who own a big business system and have hundreds of
employees. They usually hire people to do the work, thus freeing up their own time. They own the business, but other people keep it running. If they left for a year, the business would be more profitable.

Investors: People who invest in stocks, real estate, and other areas. They build up
their portfolio of assets and earn money through their investment transactions. Their money works for them.

2. Kiyosaki suggests that if you want to move from being an E or an S to a B or an I that you first become a business owner of sorts so that you can learn about how businesses are run, how to read their financial statements, etc. This is a learning experience. Your business becomes a mentor, it increases your cashflow, and allows you more time to invest. The most experienced Investors are those who first owned a business. There are three main ways you can make this move.

• First, build your own business.
• Second, buy into an existing business system called a franchise.
• Third, become part of a network marketing group.

3. Kiyosaki introduces the idea of buying up Tax Lien Certificates as an investment. For example: if someone doesn’t pay their property taxes, you can pay them. They them become indebted to you. When they do pay they pay the amount owed, plus percentage gained.

4. Kiyosaki also introduces Wraps, or Lease Purchase Agreements. Basically you become the bank or lender in the sale of an asset. You may have bought a $100,000 home for $70,000 but them put it up for sale for $100,000 with no down and low monthly payments. The purchaser of the home them signs a lease purchase agreement where they pay you (the lender) and not a bank for the mortgage. The nice thing about this is that you can choose the interest rate. Kiyosaki usually has it around 10%. So, you are still paying your $70,000 mortgage at about 5-6% (about $400) while the purchase is paying you the %100,000 lease at 10% (about $877). That gives you a monthly cashflow of $477. If the purchaser defaults on the lease, you can foreclose and find another person to purchase the home while keeping the money already made.

5. Seminars on tape by Raymond Aaron were recommended. Goes over keys to success: Dream big, think long term, underachieve on a daily basis (smaller goals are easier to achieve the huge over the top ones), take baby steps.

6. I loved this quote by Erik Hoffer. Times have changed, yet we are still taught to think financially in terms of the industrial age. It is now the information age. Those who change with the times are the ones on top of the game.

• “In times of change, learners inherit the earth. While the learned, find themselves beautifully equipt, to deal with a world, that no longer exists.”

7. Problem solvers are the money earners because at the flipside of every problem there is opportunity.

8. When the world gets excited about something you should be afraid, when the world is afraid, your should be excited. (aka, don’t follow the crowd off the cliff).

Kiyosaki also goes a lot more in depth about the different kinds of investors (I recommend reading that in the book as it is very extensive). But he does recommend becoming proficient at level 4 investing before you move onto 5 or 6.

What am I Doing?

Cover via Amazon

This blog is mainly written for myself. It's a way for me to keep track of information I'm learning, the steps I'm taking, and the actions I'm doing on my path to greater wealth and understanding.

It's funny that one book could have done so many things for me. I remember that I bought "Rich Dad Poor Dad" by Robert Kiyosaki many years ago on a whim. I'd heard that it was a good book. Since browsing the discount section of bookstores and libraries was something I love to do, it was no surprise that I ended up buy this book I'd heard so much about.

So, there it was. On my bookshelf with many other bargain buys. I was in school at the time studying to be a high school English teacher. I was at a competitive university (Brigham Young University). It was a school filled with perfectionists and overachievers. I was one of them. My school schedule was very busy. Plus I was one of those students who always did all the homework, and even the suggested readings. On top of that I was working two jobs. Needless to say, "Rich Dad Poor Dad" stayed on that shelf for a long time.

I finally finished school and accepted a job as an English teacher at a local residential treatment center. Again, I worked hard. Most of the time, I was the last teacher to leave the school (not the first to show up; I just loved my sleepy time). I'd go home and do all I could to relax. I read all day with my students, on my own (to prepare lesson plans and get ideas), and in class (I had to take extra classes to work at this school). My time was nowhere to be found, and I did not want to read anything else because I was already on book overload (first from school and now from work).

The next time I even thought about that "Rich Dad" book sitting on my shelf was during a parent teacher conference. I was talking to the substitute who was going to take my class for the day. He loved books and was currently reading "Rich Dad Poor Dad." My thoughts turned to that book on my shelf, "I have that book, but haven't read it yet." "You haven't read it?" was his reply, "You need to get on that."

It took about two years for me to "Get on that." I had quit my job because of all the stress it gave me, and was looking for something else. I decided that I didn't want to work for someone else if I could help it. As it would happen I ended up marrying that substitute. He is now in the military and we live in Hawaii. He had been reading some of Kiyosaki's other books and signed us up for a free seminar. We went, were inspired, and signed up for a 3 day seminar (coming up next weekend). I dusted off my book and finally finished it. It took me two days to read the next book, and now I'm on to the third.

What am I doing? I going to put to use the things I'm learning. I don't want to work for someone else. I want to help those around me be financially free. I want to spend time with my family and friends. I want to travel the world. And, I want to live a long full life that isn't worried about money all the time. So, what am I doing? I'm changing my life. I know it will take a while, but I am prepared, ready to learn, and willing to change.

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• 10 Questions for Robert Kiyosaki (time.com)