Happy New Year

Robert Kiyosaki is an author who you may have heard of, or read his books. His views on the path to financial freedom are controversial, and most people have strong opinions on whether they are good ideas or not.

One concept he brings up in his books is the "Cashflow Quadrant." This is a square with Employees and the Self-Employed on the left side (E&S), and with Business Owners and Investors on the right side (B&I). The key to financial freedom according to Kiyosaki is to be on the right side of the Cashflow Quadrant. This is the side where money works for you. On the left side, you are working for money, and it will be very hard to gain financial freedom in this way.

The problem with this is that most of us are on the left side, and moving to the right side is not easy. To move to the "B" quadrant, you need money to buy an existing business or start a new one. If you purchase an existing business or a franchise, the more successful it has been, the more expensive it will be to purchase. If you are starting a business from scratch, you may not need as much money, but it is less likely to be successful. 9/10 of new businesses fail within the first year, and of those that make it past the first year, 9/10 of those will fail within the next four years. Of course, if you create the one business out of 100 that is successful, you will be very rich. But the odds are against you.

The other option is to be an investor. This also requires money. I believe this option is a better choice for myself personally. So for the next few weeks I will post entries on how to get into a position where you can get to the right side of the Cashflow Quadrant and be an investor. Next week I will talk about getting out of debt.