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Robert Kiyosaki wrote the book “Cashflow Quadrant” in 2000, following the astounding success of his “Rich Dad, Poor Dad” book. From a network marketing perspective, his principles of moving your source of income from the employee side to the business side of his quadrant makes perfect sense for any aspiring wealth builder.
The basic concept of the Cashflow Quadrant is that we all earn money from one or more of four different sources. Namely, employees make money from a job they hold; self-employed people own their own job and typically run small businesses; investors make money from their various investments; and, business owners make money from the business systems they put into place.
At this point people are often confused by the difference between a self-employed person and a businessperson. Michael Gerber explains this concept well in his book, “The E-Myth,” and clarifies Kiyosaki’s concept of the business quadrant. According to Gerber, a self-employed person only makes money when he or she is actively involved in the daily operation of the small business; whereas, the business person has established systems and control mechanisms which allow him or her to make money from the business, whether he or she is actively involved in its day to day operations or not.
This “systems” approach to operating a business is crucial to Kiyosaki’s philosophy of creating passive sources of income, and is the ultimate goal of any network marketer.
As a network marketer, you begin your business in the self-employed category, and with work you build your team to a point whereby you can essentially make money on autopilot. When you reach this point, your business has moved your source of income from the self-employed corner of the Cashflow Quadrant to the business corner, essentially creating a residual income that will serve you well for years to come.
That is the beauty of Robert Kiyosaki’s Cashflow Quadrant and network marketing.