There are many ways people earn income for a living. Some are working for someone else, for a company or for the government. Others are working by themselves relying on skills they have, or are running their own business such as selling, hair-dressing or sewing.
Only a handful individuals who hire people to run their business, or invest their money in other people's business to gain significant profits by providing added value to their products.
- Quadrant 'E': This is a group of people who earn their living by working as an employee of a company or individual. In the Industrial Age this type is the most widely practiced by people.
- Quadrant 'S': This group earn money by practicing their own skills and experiences without working for a company or individual. Examples: tailors, doctors, notaries, lawyers.
- Quadrant 'B': This group are business owners who make money from the business that they manage by creating a system so that they do not have to do everything themselves.
- Quadrant 'I': This group are investors who earn income by putting their money in other people's business.
One can not enjoy a financial freedom unless he/she is earning from at least 2 or more quadrants. Someone who is no longer worrying about money for a living can be considered as having a financial freedom or the rich. Rich people should not be worrying about money anymore even though they are not working physically.
Is someone with an income above Rp 100 million per month is a rich man? Although in general people would think so, but let us think again. Suppose that he suddenly ill and unable to work. Is he still able to make money of Rp 100 million per month? How long will he still be able to maintain the same income without working physically? Wealth is measured by how long one can physically stop working but still able to maintain same income. This is the definition of the rich according to Robert T. Kiyosaki in his book "The Cashflow Quadrant". Do you agree?
Still according to Robert T. Kiyosaki, someone whose income came from Quadrant 'E' and 'S' or left quadrant is more at risk of loosing the income than those who obtain their income from Quadrant 'B' and 'I' or the right quadrant. People on the left quadrant is "working for money", while those in the right quadrant have "money to work for them". The left quadrant people could loss all their incomes when something bad happens like sickness. The right quadrant people still earn income when they are not physically working.
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