Rich Dad's Cashflow Quadrant: Book Review + 5 Success Tips & Takeaways |

Rich Dad’s Cashflow Quadrant: Book Review + 5 Success Tips & Takeaways

In this special book review of Rich Dad’s Cashflow Quadrant, I am going to compare my takeaways from my first reading as a 21 year old ‘final year ‘college and university student ready to start my first full time ‘secure job’ with my more recent second reading as a recent retiree from my 9-to-5 in my early 40s having achieved financial independence at 38.

Rich Dad’s Cashflow Quadrant is one of those books that you should read not just once, but many times. I wish I didn’t wait so long before my second reading as I missed out on 20 years of new lessons and actions to implement. I won’t be making the same mistake again. For every reader at any age and any stage in life, there are news lessons that will support your personal growth and your money journey to build wealth and achieve true financial freedom.  In the rest of this blog I will explain how it worked for me with 5 Top Tips and of my real-life takeaways…

Rich Dad’s Cashflow Quadrant Review: An honest opinion & summary

Why should I read Cashflow Quadrant?

Rich Dad’s Cashflow Quadrant is actually the second book written by Robert T. Kiyosaki. It was the first personal finance book that I ever read when I was 21 and it inspired me into action, to start my money journey to financial independence. This is why you and any one who wants to achieve this ultimate financial and life goal should read Rich Dad’s Cashflow Quadrant. It changed my life and it can do the same for you.

Rich Dad's Cashflow Quadrant is a Roadmap to financial success - Julie Choo |

Difference between the first and second book in the Rich Dad Series

The mission of Cashflow Quadrant is to explain the the four (4) different ways that people make money, that is as an Employee (E quadrant), from Self Employment (S quadrant), by building a Business (B quadrant) through systems, and as a true Investor or Professional Investor (I quadrant).

Robert Kiyosaki uses his own money journey from the time he was a young adult having finished with the Marine Corps as a pilot until his own early retirement from selling his education business, along with many examples or stories from others including Bill Gates, Warren Buffett and Donald Trump, to explain the pros and cons of the four different quadrants. 

Cashflow Quadrant builds on the money mindset principles and key concepts introduced in the first book Rich Dad Poor Dad, which is the the world’s most read personal finance book of all time. In contrast, the story in Rich Dad Poor Dad is told from the eyes of an adult reflecting on his childhood journey with money.

4 ways to earn money in Cashflow Quadrant |

Quick Summary of Rich Dad’s Cashflow Quadrant & Favorite Lesson

Rich Dad’s Cashflow Quadrant is a must-read summary of Robert Kiyosaki’s adult life, because it provides an insightful roadmap through the four quadrants of earning money. Kiyosaki encourages the reader to follow his personal path if they want to achieve financial independence faster, to move from the left side of the quadrant comprising the E and S, to the right side of the quadrant comprising the B and I, as this is the best way to earn the big dollars and to create passive income, by making money work for you. 

Right from the start, it’s clear that Kiyosaki’s path is one of entrepreneurship and becoming your own boss with his own business. This is where he learned how to leverage money like the wealthiest people do.

There are examples of his own real estate purchasing and financing projects where he reveals the numbers behind his calculated decisions in his financial statements. Practical advice is provided via the many example guides and checklists, including a demonstration of the Debt Snowball Method for those who have bad debt to clear (ie. credit cards), before you begin to save and invest your extra money. 

As a fan of gamification and being a business strategy book author myself, I couldn’t agree more with Kiyosaki’s push to treat earning money like a game, where you work smart by setting yourself financial goals with many small steps to help you grow rich over the long term. The journey is one of learning the different skills to help you gain free time through leverage, as Time is Money. Even when you might have little money to begin with, you can learn how do you use Other People’s Money (OPT).

My favorite lesson is the alternate walkthrough of a balance sheet and income statement, to show you how money really works, to give you passive income. Kiyosaki explains how this is the best way to grow your wealth, instead of the conventional wisdom held by people who seek job security and who are reliant on their salaries or wages as employees, with just one income source and lots of expenses. 

New takeaways and ideas from every read

The thing I value most from my first reading and re-reading this book 20 years later, is that you can gain more insights and ideas on what you can do, things to try and new actions to take as you gain more life experience on a personal level, to keep improving your wealth or changing direction when things don’t go to plan.

This makes Rich Dad’s Cashflow Quadrant not only a great book about personal finance to build wealth, and gain financial security but it is also a book with highly valuable business strategies for those considering the entrepreneur path, for building wealth through business, real estate and investing – the strategies used by rich people.

Purchase Rich Dad’s Cashflow Quadrant from Amazon

Top 5 Tips for Young Adults in your 20s and F.I.R.E.* seekers in your 40s

Below are my own REAL-LIFE personal examples to illustrate how the Top 5 Tips and takeaways in your 20s and 40s* from the Cashflow Quadrant book have really worked for me, and transformed my life.

The goal of sharing these alternate tips and actionable takeaways compared to the usual summary of chapters from the book and relisting the key steps is to show you how you can make the key lessons from Robert Kiyosaki YOUR OWN. It’s important to reflect on your life situation and work out for yourself what works for you and then take action.

What really surprised me are the 5 different takeaways I took from my second reading which I have also shared along with the 5 takeaways from my first reading in this unique Cashflow Quadrant review via the examples below aligned to the same Top 5 Tips from the book.

*F.I.R.E. stands for Financial Independence Retire Early.
**You can take any of these at any age. They have been listed here to help illustrated some real life examples.

Cashflow Quadrant Top 5 Tips and Takeaways (Infographic) | By

Tip #1: Spend your money on assets that make you money instead of things that takeaway your money

Assets put money in your pocket, while liabilities take money out of your pocket.

– Robert Kiyosaki, Rich Dad’s Cashflow Quadrant

As illustrated below, Kiyosaki shares his version of an income statement and balance sheet to help you learn this point. He even compares how income flows for the poor, the middle class and the rich. Obviously, the top tip is to follow the path of the RICH.

RichDadPoorDad-IncomeStatements | Shared by

Takeaways in your 20s

The following figures are in Australia Dollars (AUD) with actions taken in 2002-2004.

When I first saw these illustrations at 21, I fairly quickly started to do these two things with the income from my first job post graduation with a modest salary of $55,000 per year:

  • Invest in dividend stocks including EFTs & Mutual Funds, and reinvest your earnings
  • Start small to get your foot on the property ladder, buying based on rental yield and capital gain

My first two dividend stocks purchases were for just $1000 each. I bought a bank stock and an mining stock boast with a history of high dividend yields. This was what my boss, whom I viewed as a mentor advised and had in his portfolio. I then continued to increase my investment at $50 to $100 a month per stock using the ‘dollar cost averaging’ method.

It look 10 months of frugal living, to save up the $30,000 deposit in order to buy my first investment property. I lived at home with my parents and paid them a small amount for board, while eating cheaply – peanut butter sandwiches 😂 – to save up a 15% deposit.

I chose an apartment costing just under $200,000, that paid a yield of 9% because it was 3 minutes walk to the location university, and 5 mins to the main train station hub. This income more than covered my mortgage repayments, and the surplus was put towards other investments like buying stocks through a Mutual fund.

Takeaways in your 40s

The following figures are in pounds (GBP) with actions taken in 2022-2023.

On re-reading the Cashflow Quadrant book and seeing these charts again in my early 40s, I realized my behaviors were that of the middle class. Middle class habits are hard to rid and while it was a rather painful exercise I started to do the following:

  • Sell things that you don’t use and that don’t provide enough ROI for you
  • Buy and rent things based on their ROI, when you need them, or because they save you time, or make you money, even if it costs more

While I had accumulated many assets that paid me semi-passive income to help me become financial independent, it was a shock when I did a Marie Kondo style inventory of my belongings, that I had so much clutter. I had spent many 100s of thousands on things I barely used, such was my wasteful behavior. My 4 year Audi Q2, only had 8000 miles on it, but it was easily worth £8000 less than what I paid for it.

It was certainly time as we came out of the COVID-19 lockdown to sell as many things as possible on Ebay, or give them to charity in return for a tax break. Without checking in detail, I managed to make around £10,000 from selling items on Ebay and buy-back websites for cameras and Apple products, which carry a premium.

I managed to sell my car for a post-COVID premium of £5000 more than the original predicted depreciation value. It also works out so much better to get back over $23,000 with no further maintenance and insurances costs – that’s a lot of Ubers and Car Rentals for many years to come.

Tip #2: Get a job as an employee that teaches you new skills you can leverage

As highlighted in Rich Dad’s Cashflow Quadrant, Kiyosaki got a job working for XEROX because of the great sales program that they had, you should use your jobs to learn, not just to earn.

Takeaways in your 20s

Upon reading Cashflow Quadrant at 21, I took Robert Kiyosaki’s advice to:

  • Use the first 3-5 years of your worklife, apply for jobs or internships with employers that have training program to learn new technical skills that will improve your CV and give you better future income with experience, even with lower pay

This is why I joined a bank for my first job after graduation. I wanted to learn about financial products like mortgages, how to work with interest rates and how to pick stocks.

Over the next 3-10 years, I continued to pick up product knowledge on many new banking products moving my way through the different types of banks from retail banking and into wealth management and investment banking. I was also continuously updating my technical skills in product and service design, including UX design, coding, infrastructure and logistics management, enterprise architecture… knowing that one day, with experience, I would earn more as my CV and professional reputation would become more valuable.

Takeaways in your 40s

Kiyosaki discusses in Cashflow Quadrant, how and her wife Kim keep learning from working with people in their business, at events that they attend, and from customers of the Rich Dad method, who attend their Rich Dad Money Meetups to play the Rich Dad Board Game. So in my 40s, I have turn to these methods of continuous learning on the job:

  • Seek volunteer positions to gain new skills & experience for free
  • Attend seminars and conferences and network to keep up with the latest developments in technology, supply chains, finance and more…
  • Offer your new products and services for free or for nominal sums to early adopters, to learn from the customer, while obtaining good testimonials

Since my early retirement, my time is more flexible and I can choose what I want to work on, to an extent, to either learn or earn. I decided to volunteer my time to support social services, in my local community. This has the benefit of improving my empathy as well as providing lots of good will to a network of new people.

I also learned a lot in starting my own small business about marketing, and digital marketing specifically, and more… The best insights have come from interviewing potential clients, and servicing early clients – including over delivering where possible, to gain testimonials and referrals.

Tip #3: Learn how money works, so you can leverage the knowledge for your own business deals and investments

Kiyosaki encourages entrepreneurship as part of learning financial literacy and to start small through self-employment where you can learn as you go. You can make smaller mistakes in small business, as you build up the skills and the systems to become a business owner. He advocates learning through practice, and not just theory.

He also recommends that you find at least one person whom you can call a mentor, a confidant that you can call on, to bounce ideas and ask questions, because they already have the experience that you need to learn.

Takeaways in your 20s

I have not stopped learning financial literacy since reading Cashflow Quadrant at 21. At the time, I took the first step and enrolled in business school. I also asked all my bosses for financial advice on building wealth, as I know how important it is to:

  • Invest in vocational or post-graduate training including getting a business mentor, to learn the business skills for operating and growing a business, as well as developing systems, or the finance skills to make better investments

One of my first bosses, who I regard highly as a mentor, taught me how to review the annual accounts of a company in order to decide if I should buy its stocks. I also learned from business school, how to innovate a new technology or digital service, with a business plan.

I asked my lecturers and all my bosses for business advice. Everyone is a mentor if they can provide your with new tips, whether you are able to ask direct questions, or if you happen to learn through observation.

Takeaways in your 40s

I certainly took a lot more from my second reading of Cashflow Quadrant, as I finally became an entrepreneur in my late 30s, and I am only now learning what it takes to really scale my business from the S quadrant to the B quadrant, as well as how to use leverage for investing bigger, to participant more in the I quadrant. Kiyosaki spends a lot of time writing about the best way to become a business owner and investor, with recommendations to:

  • Start your own small business or join a larger business as an accountable owner with skin in the game, to practise your business skills, build real experience, and learn from mistakes (if you haven’t already) – including an example discussing network marketing
  • Learn to raise capital through more complex business investments
  • Make sure the numbers work prior to purchasing your investment, not after, as that is gambling

My journey is starting to take a similar route to Kiyosaki’s in that I am now learning to form better business partnerships, and to raise investment funding through different sources that are more risky but provide higher returns. I am learning more sophisticated ways to leverage ‘other people’s money’ OPM, to support my business, such as Private Equity and Hedge Funds, or Bridging Loans and more… There are so many more financial instruments that you can use, as to dive deeper into the numbers.

Tip #4: Build additional passive income sources & don’t rely on just the one job as your only source of income

In Cashflow Quadrant, Robert Kiyosaki advises us to start Investing in stocks and real estate for dividends and rental income as soon as you can. These activities are all possible even when you are earning a modest income as an employee as long as you know how to save, to invest.

Takeaways in your 20s

Reading Cashflow Quadrant at 21 has inspired me to:

  • Start a small side hustle to add additional income on top of your day job, and learn to multiply this effort, once you start to gain success, no matter how little it is
  • Experiment and learn new ways to make passive income via new business assets eg. digital products

In my late teens and early 20s, I got a side hustle job as a tutor, for high school maths, science and later undergraduate level electronics and project management for engineers. I started to develop learning materials, including cheat sheets, guides or my own cliff notes, and templates that I could sell in small volumes, via my tutoring agency and at my university.

At 30, I started an interior design business part-time to design new kitchens and bathrooms for wealthy clients, and made £10000 of extra income form just two clients. I learned how to take a cut from recommending certain designer products to customers and make my first affiliate sales income, albeit not via an online channel.

Takeaways in your 40s

Through his examples or stories in Cashflow Quadrant, Kiyosaki has reminded me to:

  • Review, build and maintain your assets to ensure it generates enough passive income to support your best living costs continuously
  • Buy assets including businesses that will build your income generating investment portfolio

I recently sold my 5 bedroom terraced house in London, and split my money into multiple properties so I could rent them out, while living in just one. The extra rental income add money into my pocket to help with increasing living costs and a few more luxury purchases.

I have also hired more people into my business to help me scale it, and so I have more time to work on my business rather than working in my business. This has allowed me to identifying new revenue opportunities, innovate new products and services.

Tip #5: Learn to build systems that will help you become a business owner where you money while you sleep

According to Kiyosaki, business systems are what help you make money in your sleep, where you have a team of employees or machines that will run the business without you being there. You can sell business systems, that is a set of processes you have optmized, as new services. You can even sell the entire business and essential get a big exit style payout, if it has systems that make help it to make lots of money, and command a high valuation. This is what he did with the Rich Dad Company.

Takeaways in your 20s

Since reading Rich Dad’s Cashflow Quadrant at 21, in every job that I have taken as an employee, or as a self-employed person, I have always try to:

  • Work in a business or organization to learn how their systems operate, looking at their processes and data
  • Learn to analyse processes and data for making improvements that save time & money or for an opportunity to make more money

As a data analyst and system engineer, this was my job, to learn how to operate the business, fix problems and improve systems for my employers, through managing the processes and reading the data.

Takeaways in your 40s

Re-reading in Cashflow Quadrant in my 40s has only strengthen my motivation to move from a mostly self-employed small business owner with a few temporary staff, struggling to build more system, and into a real business owner and investor, in order to achieve financial freedom. As recommended by Kiyosaki through his own journey, it’s time to:

  • Productize your experiences, both personal or in business, by systeming them into replicable products or services that you can sell, to help you make money you in your sleep
  • Learn to scale your systems to support business growth

In 2020, I productized my knowledge and experiences into a book, THE STRATEGY JOURNEY, which houses a methodology that uses systems thinking to help a business start, grow and scale in the digital economy, and in the fact of business disruption. I am also leveraging my business and technology skills, as well as working on raising funding to scale my business through building a Platform as a Service (commencing in 2024).

In conclusion…

I hope that in sharing my experiences and actioned takeaways from reading Rich Dad’s Cashflow Quadrant, you can see why you should read this book again and again, to help you formulate your own takeaways on demand, at any age and whatever your financial situation. Of course, there was a lot of hard work involved to achieve these sorts of outcomes. All success and financial success comes at a price. Time is money. 

As illustrated in this book review and through my personal takeaways, Cashflow Quadrant and Robert Kiyosaki’s teachings have really impacted on me, my career, and my personal finances and wealth, on my personal journey to achieve financial independence before 40 and true financial freedom hopefully soon, by my 50s.

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