Rich Dad's CASHFLOW Quadrant. Robert T. Kiyosaki

he supported.

       • Bringing jobs and financial stability to the community.

       • Having time and money to take care of his health.

       • Being able to travel the world with his family.

      “Those things take money,” said rich dad. “That’s why money is important to me. Money is important, but I don’t want to spend my life working for it.”

       Choosing Quadrants

      One reason Kim and I focused on the B and I quadrants while we were homeless was because I had more training and education in those quadrants. It was because of my rich dad’s guidance that I knew the different financial and professional advantages of each quadrant. For me, the quadrants on the right side, the B and I quadrants, offered the best opportunity for long-term financial success and financial freedom. Also, at age 37, I had experienced successes and failures in all four quadrants which allowed me some degree of understanding about my own personal temperament, likes, dislikes, strengths, and weaknesses. I knew which quadrants I did best in.

       Parents Are Teachers

      When I was a young boy, my rich dad often referred to the CASHFLOW Quadrant. He would explain to me the difference between someone who was successful on the left side versus the right side. But being young, I really didn’t pay much attention to what he said. I didn’t understand the difference between an employee’s mindset and a business owner’s mindset. I was just trying to survive school.

      Yet I did hear his words, and soon they began to make sense. Having two dynamic and successful father figures around me gave meaning to what each was saying. But it was what they were doing that allowed me to begin to notice the differences between the E-S side and the B-I side. At first, the differences were subtle. Then they became glaring.

      For example, one painful lesson I learned as a young boy was simply how much time one dad had available to spend with me versus the other. As the success and prominence of both dads grew, it was obvious that one dad had less and less time to spend with his wife and four children. My real dad was always on the road, at meetings, or dashing off to the airport for more meetings. The more successful he got, the fewer dinners we had together as a family. On weekends, he was at home in his crowded little office, buried under paperwork.

      On the other hand, my rich dad had more and more free time as his success grew. One of the reasons I learned so much about money, finance, business, and life was simply because my rich dad had more and more free time for his children and me.

      Another example is that both dads made more and more money as they became successful, but my real dad, the educated one, also got further into debt. So he’d work harder and suddenly find himself in a higher income-tax bracket. His banker and accountant would then tell him to buy a bigger house for the so-called “tax break.” My dad would follow the advice and buy a bigger house, and soon he was working harder than ever so he could make more money to pay for it. Ultimately, this just took him even further away from his family.

      My rich dad was different. He made more and more money but paid less in taxes. He also had bankers and accountants, but he wasn’t getting the same advice my highly educated dad was getting.

       The Main Reason

      The driving force, however, that wouldn’t allow me to stay on the left side of the Quadrant was what happened to my highly educated but poor dad at the peak of his career.

      In the early 1970s, I was already out of college and in Pensacola, Florida, going through pilot training for the Marine Corps before a tour in Vietnam. My educated dad was now the superintendent of education for the State of Hawaii and a member of the governor’s staff. One evening, he phoned me with some interesting news.

      “Son,” he said, “I’m going to resign from my job and run for lieutenant governor of Hawaii for the Republican party.”

      I gulped and then said, “You’re going to run for office against your boss?”

      “That’s right,” he replied.

      “Why?” I asked. “Republicans don’t have a chance in Hawaii. The Democratic party and the labor unions are too strong.”

      “I know, Son. I know that we don’t have a prayer of winning. Judge Samuel King will be the candidate for governor, and I will be his running mate.”

      “Why?” I asked again. “Why go against your boss if you know you’re going to lose?”

      “Because my conscience won’t let me do anything else. The games these politicians are playing disturb me.”

      “Are you saying they’re corrupt?” I asked.

      “I don’t want to say that,” said my real dad. He was an honest and moral man who rarely spoke badly about anyone. Yet I could tell from his voice that he was angry and upset when he said, “I’ll just say that my conscience bothers me when I see what goes on behind the scenes. I couldn’t live with myself if I turned a blind eye and did nothing. My job and paycheck aren’t as important as my conscience.”

      After a long silence, I realized that my dad’s mind was made up. “Good luck,” I said quietly. “I’m proud of you for your courage, and I’m proud to be your son.”

      My dad and the Republican ticket were crushed, as expected. The re-elected governor sent the word out that my dad was never to work again for the State of Hawaii, and he never did. At the age of 54, my dad went looking for a job, and I was on my way to Vietnam.

      When he was middle-aged, my dad was hunting for a job. He went from jobs with big titles and low pay to other jobs with big titles and low pay. He was a tall, brilliant, and dynamic man who was no longer welcome in the only world he knew, the world of government employees. He tried starting several small businesses. He was a consultant for a while and even bought a famous franchise, but all his efforts failed.

      As he grew older and his strength slipped away, so did his drive to start over again. His lack of will became even more pronounced after each business failure. He was a successful E trying to survive as an S, a quadrant in which he had no training or experience and for which he had no heart. He loved the world of public education, but he couldn’t find a way to get back in. The ban on his employment in the state government was silently, but firmly, in place.

      If not for Social Security and Medicare, the last years of his life would have been a complete disaster. He died frustrated and a little angry, yet he died with a clear conscience.

      So what kept me going in the darkest of hours? It was the haunting memory of my educated dad sitting at home, waiting for the phone to ring, trying to succeed in the world of business, a world he knew nothing about. That, and the joyous memory of seeing my rich dad grow happier and more successful as his years went on, inspired me. Instead of declining at age 54, rich dad blossomed. He had become rich years before that, but now he was becoming mega-rich. He was constantly in the newspapers as the man who was buying up Waikiki and Maui. His years of methodically building businesses and investing were paying off, and he was on his way to becoming one of the richest men in the Islands.

       Small Differences Become Large Differences

      Because my rich dad had explained the quadrants to me, I was better able to see that small differences grow into large differences when measured over the years a person spends working. Because of the CASHFLOW Quadrant, I knew it was better to decide, not so much what I wanted to do, but more who I wanted to become as my working years progressed. In the darkest hours, it was this deep knowledge, and the lessons from two powerful dads, that kept me going.

       It Is More Than the Quadrant

      The CASHFLOW Quadrant is more than two lines and some letters. If you look below the surface of this simple diagram, you will find completely different worlds, as well as different ways of looking at the world. As a person who has looked at the world from both the left and the right sides, I can honestly say the world looks much different depending on which side you are on.