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The Cashflow Quadrant™ part 4

Today we are going to  look at the side right hand side of Robert Kiyosaki’s Cashflow Quadrant – the “B” and “I”.

B – Business owner
Robert describes a major characteristic of the “B” as someone who likes to delegate and has an attitude of “why do it yourself when you can hire someone to do it for you, and they can do it better?”

To be a “B” requires both the technical skills of business and the essence of leadership.

Many people who start a business end up with an “S” type business and not a “B”. The major difference between a true B and an S is that a B can leave their business for a year or more and return to find their business more profitable and running better than when they left it. In an S business this would not happen and most S’s cannot leave for very long at all. The main difference is because an S owns a job and a B owns a system and has hired competent people to operate the system.

In my years as an accountant and financial planner I worked with many “S” mentality business people. After I first studied with Robert Kiyosaki I learned to coach my clients in a different manner. This is mainly because I personally had learned so much. The financial planning practice I was an owner in was anything but a true Business and relied heavily on the owners skills. We transformed it to system driven business and were able to take long vacations for the first time.

I – Investor
Investors make money with money. They can choose not to work because their money is working for them. You can make your money in one (or more) of the other three quadrants, however, if you want to ultimately be wealthy you need to invest in the “I” quadrant.

People in the “I” quadrant focus on investments that generate income on an ongoing basis. Examples of this are:
•    Rent from a property as long as the income is greater than the expenses
•    Interest from savings
•    Dividends from stocks and bonds

People in this quadrant focus on having their money work for them.

In summary

  • Business Owner – If you are in business ask yourself can your business operate without you? Can you leave your business for an extended time without detrimental affects on the bottom line? Is your business totally run by systems?
  • Investor – If you are not an experienced Investor it is critical to educate yourself before commencing. There are many advisors, courses and books available on every type of investing. Seek advice but never hand over responsibility.

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