Investment Advice

  1. The goal of all entrepreneurs should be to grow your assets to the point where the cash flow from all of your assets would be greater than your living expenses.
  2. Wealth –  The number of days you can survive without physically working, and still maintain your standard of living.
  3. Warren Buffet says that portfolio concentration is better than diversification. This allows for specialization.
  4. Bearing risk is a necessary component of becoming wealthy, therefore it is something to understand and manage as opposed to flee from.

Cash-Flow Quadrant

The Concept of ESBI by Robert Kiyosaki- In his book Rich Dad, Poor Dad Kiyosaki explains his concept on the cash flow quadrant.

The Core Idea:


The Cashflow Quadrant is a way to categorize people depending on how they make money. There are four sections according to Robert Kiyosaki: E for employees; S for small businesses or self-employed people; B for bigger businesses; I for investors. The quadrants are meant to show you where you are today in terms of personal finance and help you chart a course to where you want to be in the future.

Spoiler alert: You should aim for either quadrant B or I. Only these two can bring you financial freedom.

Active Income– Trading time for money verses

Passive Income– of not depending on your presence.


E– Employee

S– Self Employed

B– Business Owner

I – Investor


Employed – (YOU HAVE A JOB)

You exchange your time and effort for an income. If you do not work you will not get paid.

Self-Employed – (YOU OWN A JOB)

You work hard for yourself but can you take a vacation and your business keeps making money?


You and your team are working hard to generate an income.


You have set yourself up to have your money working for you.

1st Quadrant – E = Employed

Consist of individuals who are employees. They work for others and the moment they stop working their income stops. This is where they usually find themselves having financial troubles. The employee is usually driven by fear of losing their job or source of income which is needed for their survival. They keep working hard to get raises or move from one company to another which is slightly higher in pay. As an employee your usually taking out loans, to buy houses, cars and etc. It becomes a challenge trying to accumulate enough wealth due to the fact that they are working for someone else. Sadly 95% of society finds themselves placed in this category. There’s absolutely no shame in being an employee so that you can pay your bills, stay a float and feed your family. 

2st Quadrant -S = Self Employed

Unlike the 1st quadrant these individuals do not work for others, they work for themselves. Being self-employed you are starting to take control of your financial destiny which is Awesome. Most business owners fall into this category. Self-employed entrepreneurs can range from the plumber down the street, to a hairstylist or someone who is home selling products, services, and/or network marketing to name a few. Most self-employed people can’t stand the thought of working under someone else rules. They would rather work 80+ hours chasing their own goals and visions rather than working 40+ hours striving to build someone else’s dreams. They continue working hard to keep their business running. The moment they take off from their business the income stops. 

 Being self-employed can definitely help you create financial freedom for you and your family. You are considered a solopreneur (S quadrant) which means the business can only go so far. 

 Once you start to develop people, systems, processes, leverage, and residual income then you’re starting to progress to the right side of the Cash Flow Quadrant (Business Owner & Investor) where the rich hang out…LOL

3rd Quadrant – B = Business Owner

So many people confuse (S) Self-Employment with being a (B) Business Owner. According to the Cash Flow Quadrant the Business Owners are the ones that hire employees and leverage systems so that the business can run with or without them. Basically the Business Owner is making money while their sleeping. 

To go from Self-Employed to the Business Owner try focusing on the B-E-S framework.

B- Build Your Audience

E- Engage Your Audience

S- Sell Your Audience

When set up correctly all three of these things can be done by leveraging systems, hiring employees or outsourcing. The goal is to get you set up on automated systems to go from being Self-Employed to a Business Owner. B-E-S Framework is a topic we will explore in details in another blog post. 

Now there’s one last Quadrant to discuss and this is where the mega rich live…

4th Quadrant -I = Investor

THIS IS WHERE YOU WANT TO BE- In this category the Investors are people who use a system to where your money starts working for YOU to create even more wealth. 

The Investor leverages many of the other quadrants to build wealth. In other words, they are using the employees and the business to make money 24/7. Money is being made while your sleeping with this system. 

The way Robert Kiyoasaki explains it is that the Investment Quadrant means you start to invest in private businesses, real-estate, commodities, stocks and etc. 



If you want to change quadrants, besides committing, you first need to start thinking and acting differently. To understand that things won’t always go smoothly and that there will be some financial losses throughout the process. However, the real reason people can’t move across quadrants is because most people simply can’t handle the extra work when they want to move from E quadrant to B quadrant. For example, they lose it, both emotionally and intellectually and return back to the quadrant they feel most comfortable in – the regular job.


Your wealth is measured by the number of days you can survive without actually working and still maintain your current standard of living. Confusing, right? Here’s an example:

Let’s say you’re spending $5,000 a month and you have $30,000 in your bank account today. This will mean that you can live the way you live now, without working, for approximately 6 months Or 180 days. “Wealth is measured in time, not dollars,” says Robert Kiyosaki.

You can be rich by the current social standards: have a big house, new car, nice clothes, but if you’re not retaining and investing most of your income into some sort of a long-term investment that will make you more money in the future you’re not really wealthy. You’re simply rich. But rich is a transition phase. Unfortunately, few realize this.

Instead of investing their money, most people will immediately buy a bigger house or a new car when they get a slight salary increase. But this type of behavior results in bigger monthly expenses and more hard work. They have nothing left to invest.

If you really want to be wealthy, your aim should be towards having enough money in your bank account so you can cover your current monthly expenses for as long as you’re alive.


  • Calculate how much you’re worth: As mentioned above, wealth is measured in time, not in dollars. Calculate how much time you can live without working, this will be your wealth index. It’s a good exercise to realize your current financial situation and map out your future steps.

  • Change the way you think: A new set of golf clubs won’t make you a world-famous golfer. To improve your game, you need to first adopt the attitude, the mindset, and the critical thinking of a good golfer. Or as the author says, you need to Be, not just Do. Be a great athlete, don’t just go to the gym.

  • Learn new things: Though we seek security through a job, it’s not as safe as you might think. We need to constantly refresh our skills if we want to keep our job and keep climbing the corporate ladder. So, since learning something new is a must, why not spend some time educating yourself on the skills you need to move to a different quadrant?

  • Build a system around your passion: Create your own job, don’t look for another job. Getting a job is a good idea for the short term, but it is not enough for the long term. If you want to live a life on your own terms you need to create your own system that will earn you money.


Though financial freedom can be found in all four quadrants, you want to operate on the right side, the B and the I quadrant side. You want to reach a point where it won’t matter whether you’ll be on your workstation or not. Focus on building your own pipelines to achieve financial freedom. 

We’re living in the information age which offers countless opportunities. You just need to find your spot and create a system that will earn you money while you sleep.

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