Rich Dad's CASHFLOW Quadrant. Robert T. Kiyosaki

employed a president to do the work, and returned six months later with a construction crew. Within a year, his team had built a large-volume stainless-steel pipeline which connected the village to the lake.

      “At the grand-opening celebration, Bill announced that his water was cleaner than Ed’s water. Bill knew that the villagers had complained about the water’s lack of cleanliness. Bill also announced that he could supply the village with water 24 hours a day, 7 days a week. Ed could only deliver water on weekdays because he didn’t want to work on weekends. Then Bill announced that he would charge 75 percent less than Ed did for this higher-quality, more-reliable water. The villagers cheered and immediately ran for the faucet at the end of Bill’s pipeline.

      “In order to compete, Ed immediately lowered his rates by 75 percent, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better service, he hired his two sons to give him a hand on the night shift and on weekends. When his boys went off to college, he said to them, ‘Hurry back because someday this business will belong to you.’

      “For some reason, his two sons never returned. Eventually, Ed had employees and union problems. The union demanded higher wages and better benefits and wanted its members to only haul one bucket at a time.

      “Meanwhile, Bill realized that if this village needed water, then other villages must need water too. He rewrote his business plan and went off to sell his high-speed, high-volume, low-cost, clean-water delivery system to villages throughout the world. He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water every day. Whether he works or not, billions of people consume billions of buckets of water, and all that money pours into his bank account. Bill developed a pipeline to deliver money to himself, as well as water to the villages.

      “Bill lived happily ever after. Ed worked hard for the rest of his life and had financial problems forever after. The end.”

      That story about Bill and Ed has guided me for years. It has assisted me in my life’s decision-making process. I often ask myself:

      “Am I building a pipeline or hauling buckets?”

      “Am I working hard, or am I working smart?”

      And the answers to those questions have made me financially free.

      That is what this book is about. It’s about what it takes to become a B and an I. It’s for people who are tired of hauling buckets and are ready to build pipelines for cash to flow into their pockets.

       This Book Is Divided into Three Parts

       Part One

      The first part of this book focuses on the core differences between people in the four quadrants. It shows why certain people gravitate to certain quadrants and often get stuck there without realizing it. It will help you identify where you are today in the quadrant and where you want to be in five years.

       Part Two

      The second part of this book is about personal change. It’s more about who you have to be, instead of what you have to do.

       Part Three

      The third part of this book explains how to find success on the right side of the CASHFLOW Quadrant. I will share more of my rich dad’s secrets on the skills required to be a successful B and I. It will help you choose your own path to financial freedom.

      Throughout Rich Dad’s CASHFLOW Quadrant, I continue to stress the importance of financial intelligence. If you want to operate on the right side, the B- and I-quadrant side, you must be smarter than if you choose to stay on the left side, the E- and S-quadrant side. To be a B or I, you must be able to control the direction of your cash flow.

      This book is written for people who are ready to make changes in their lives to move beyond job security and begin to build their own pipelines to achieve financial freedom.

      We are in the Information Age which offers more opportunities for financial reward than ever before. Individuals with the skills of the B’s and I’s will be able to identify and seize those opportunities. To be successful in the Information Age, a person needs information from all four quadrants. Unfortunately, our schools are still in the Industrial Age and still prepare students for only the left side of the CASHFLOW Quadrant.

      If you’re looking for new answers to move forward in the Information Age, this book is for you. It doesn’t have all the answers, but it will share the deep personal and guiding insights I gained as I traveled from the E and S side to the B and I side.

       Part One

       THE CASHFLOW QUADRANT

       Chapter One

       WHY DON’T YOU GET A JOB?

       To someone who values a job, it’s difficult to explain why you might not want one.

      In 1985, my wife Kim and I were homeless. We were unemployed and had little money left in savings. Our credit cards were exhausted, and we lived in an old brown Toyota with reclining seats that served as beds. At the end of one week, the harsh reality of who we were, what we were doing, and where we were headed began to sink in.

      Our homelessness lasted another two weeks. When a friend realized our desperate financial situation, she offered us a room in her basement. We lived there for nine months.

      We kept our situation quiet. For the most part, Kim and I looked quite normal on the surface. When friends and family were informed of our plight, the first question was always, “Why don’t you get a job?”

      At first, we attempted to explain, but we usually failed to clarify our reasons. To someone who values a job, it’s difficult to explain why you might not want one.

      We did odd jobs occasionally and earned a few dollars here and there, but we did that only to keep food in our stomachs and gas in the car. Those few extra dollars were only fuel to keep us going toward our singular goal. I must admit that during moments of deep personal doubt, the idea of a safe, secure job with a paycheck was appealing.

      But because job security wasn’t what we were looking for, we kept pushing on, living day to day, on the brink of the financial abyss.

      That year, 1985, was the worst of our lives as well as one of the longest. Anyone who says that money isn’t important obviously has not been without it for long. Kim and I fought and argued often. Fear, uncertainty, and hunger shortens the human emotional fuse, and often we fight with the person who loves us the most. Yet love held the two of us together, and our bond as a couple grew stronger because of the adversity. We knew where we were going. We just didn’t know if we would ever get there.

      We knew we could always find safe, secure, high-paying jobs. Both of us were college graduates with good job skills and solid work ethics. But we weren’t after job security. We wanted financial freedom.

      By 1989, we were millionaires. Although financially successful in some people’s eyes, we still hadn’t reached our goal of true financial freedom. That took until 1994. By then, we never had to work again for the rest of our lives. Barring any unforeseen financial disaster, we were both financially free. Kim was 37 and I was 47.

       It Doesn’t Take Money to Make Money

      I started this chapter with a discussion about our being homeless and having nothing in 1985 because I often hear people say, “It takes money to make money.”

      I