Rich Dad's Daughter

My poor and rich dads’ opposing views of the world are best explained by the CASHFLOW Quadrant, or ESBI.

Each quadrant of the ESBI represents a certain type of person and mindset…

E – Employee

E in the ESBI stands for Employee

An employee values job security, benefits, and a steady paycheck. To attain this, he sells his time to an employer. He does not like risk, nor does he understand how money works. His education is traditional and prepares him to be a good employee.

S – Self Employment

S in the ESBI stands for Self-Employment or Small business Owners. It also includes a professional like doctors with own clinic

He does not have a boss, and works for himself. He doesn’t have a job. Rather, he is the job. The problem for an S is that he cannot take time off. If he does, he stops making money.

B – Business

B in the ESBI stands for Business I.e, Big Business

A big business owner doesn’t have a job, nor does she own one. Instead, rather she owns a system. Her mindset is, how do I hire others to make money for me in the system I’ve built. She has financial freedom because she’s able to stop working and still make money.

I – Investors

I in the ESBI stands for Investors

An investor believes that money can be used to make more money. She is adept at using debt, taxes, insurance, and more to make money passively through investments in assets. She sees the world as one of opportunity and abundance.

The ESBI is divided into two sides. E and S are on the left side, and B and I are on the right side.

Those on the left side are often uneducated about money, business, and investing, and they fear risk.

It is, however, their lack of education that makes business and investing seem risky.

Those on the right side understand how money and investing work, and they see the world in a much different way.

They believe that being an employee or self-employed is actually much riskier than owning a big business or investing because you lack three things: training, control, and knowledge.

My poor dad lived his life on the left side of the ESBI. My rich dad lived his life on the right side.

My poor dad struggled all his life and always complained about his financial state.

My rich dad grew his wealth each year, and like the game of Monopoly, he traded up his houses for hotels over time.

I studied the lives of both men. I wanted to understand why my poor dad thought there was risk in investing, and why my rich dad didn’t fear investment risk at all.

Share your reviews 🤗 & Comment in Which Quadrant you are Now?