How do people respond to the need for money? Ideally, prayer should be the initial response. But after prayer, what’s next? What is the appropriate action to address the need for money?
Robert Kiyosaki, in his book Cashflow Quadrant, informs us that the response of people to the need of money depends on which quadrant an individual is coming from. If a person comes from the E quadrant, which is the quadrant of employees, the usual response is to look for another job or for a job with a higher pay. For an employee, the important things are job security, higher salary and other employment benefits. The difficulty in the E quadrant is that a job is just a short-term solution to a long-term problem. After productive years of employment, as time runs out and a person begins to age, and realizes that he saves nothing for his retirement, then fear for his future starts to occupy his mind.
A person coming from the S quadrant, the quadrant of specialists, self-employed, and owners of small business will respond to the need for money by doing their own thing ALONE. People in this quadrant want to take control of their situation on their own. The song “My Way” by Frank Sinatra is an appropriate theme song for them. The success of either their work or their business depends on their exceptional skill and physical presence. Once they leave their business to somebody else, problems begin to occur for none can do their task better than themselves. RK identifies that S quadrant is the hardest of all for success in this quadrant would mean more time and more energy to spend. And that would also mean depriving your family with your time and physical presence.
People from the B quadrant would respond to the need for money by either creating or buying a business system that will produce them cash with or without their physical presence. During the initial stage of the business, hard work is required. But as years pass by and the business becomes successful, freedom of time and money are the rewards that people in the B quadrant would enjoy. They can now freely use their time to have fun with their family, to do the things they love, and to be of service to humanity. RK claims that there are three types of business system in the B quadrant. These are the traditional C-type corporation, franchising, and networking. In C-type corporation, you develop your own business system. In franchising, you buy an existing business system. In networking, you buy into and become part of an existing business system.
People from the I quadrant, the quadrant of investors, respond to the need for money by looking for opportunities to invest in assets that produce money. Unlike in the first two quadrants where people work for money all their lives, people in the I quadrant have the skill to let money do the work for them. People investing their time to learn financial literacy will experience a discovery of entrepreneurial genius within them that will open their eyes to numerous opportunities almost everywhere, which ordinary people cannot see.
To transfer from the E and S quadrants to the B and I quadrants is not easy but the journey is worthwhile. Depending on the background, for some the process would be easy but for many the journey is impossible. RK describes the transfer to a kind of battle between who you are and who you want to become. It is an internal strife within you seeking either security or freedom. RK compares the transfer to “a drowning person beginning to fight for air, or a starving man who will eat anything to survive” (p.184).
It is true that the transfer is risky and that is why preparation is necessary. And the best preparation to transfer quadrant is through financial literacy. In fact, as you view your life long-term, to stay in the E and S is more risky than to transfer to the B and I. The question is, when will you start your journey?
Financial Literacy 