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Kia Ora,
The next part of Financial education is what Robert Kiyosaki has defined as they Cash Flow Quadrant & which segment or segments you fit into.

The quadrant is divided into four segments. We will quickly go through each segment but for more infromation & a better understanding it is better to purchase his book 'The Cash Flow Quadrant" which is basically part two of Rich Dad Poor Dad.

First part of the Quadrant is the top left where most people fit.

This is the E quadrant where all employees fit no matter how much they earn. They can be earning several million dollars a year but still have the mindset of someone in the E quadrant, that they need a job to succeed. The higher paying the job the better.

Yet when you play the game Cashflow a few times you soon hear a different reaction. When I read that in Rich Dad Poor Dad I thought what a load of s...! But everyone does it who plays the game more than a couple of times. They get a card for a high paying profession & you hear a groan & everyone else sniggers. Because with a higher wage comes higher costs like for the kids. You also start to hear people moan everytime they land on a paycheck. Why because they don't mind collecting their paycheck but by landing on that square they have missed an opportunity & it happens in real life.

All the opportunities I missed in Iraq that would of put me ahead of the game when I reflect back is a lesson in itself.

The next Quadrant is the S quadrant which is for self employed or small businesses, this is in the left bottom of the set up. These are basically the business doesn't work where the person, doesn't show up.

This would encompass approximately 97% of NZ businesses according to Government statistics. This also includes people such as Dr's & lawyers whom many work for themselves. Many earn a high income but are no better off than those on low income. A few years ago I used to assist a PI doing debt collection & that was one thing they said. All the affluent areas you had a lot of issues in recovering debt where as in poorer areas they strived to ensure the bills were paid or were happy to come to an arrangement.

Next we move to the upper right portion of the set up. This Quadrant is the B or business. Basically this is where as the business owner you work on, not in the business. You can go away in theory for a year & when you come back the business will be going better than when you left. Robert talks about this being about 500 employees. Not something you see a lot of in NZ, although it doesn't take much. My security idea I am aiming to launch once it got to a certian stage & that would early in its life it would probably be looking at 700 staff & if returning at full capacity would be around $87 million a year. It is mind blowing when you actually sit down to work out how your little idea could go. Main reason for sitting down though was to see how much was needed to make it pay for itself. Of course it was well below that & getting those figures would mean something was terribly wrong with society.

The last part of the Quadrant is the I or Investors,

This is where you want to be. One it means your income is passive so no work required or not in the normal sense of the word. This is when you have more time to do those things you want like travel, help out or learn something new.

It is also where you enjoy all the tax advantages of th rich.

It is funny when you go back through to check what people like Robert Kiyosaki is saying that taxes were voted in to punish the rich but they have different rules to play by & it is the poor & middle class who pay most of the tax.

In NZ you often hear people say my taxes are paying for those on the benefit. But having being on the benefit, I can tell you beneficiaries pay tax. I can also tell you that for a while being in the rich mans world the tax advantages have meant all the tax I have paid for last few years I have being paid back at the end of each tax year.

Even though for the moment I am not in that category I am still benefitting from them as I aim to get back up there.

There is a quote " being poor is eternal, broke is tempoary" meaning you think poor you always will be, you think rich having no money is just a blip on the radar.