Rich Dad's Cashflow Quadrant

Rich Dad's Cashflow Quadrant

In the winter of 1985, Robert and Kim Kiyosaki were sleeping in the back seat of a borrowed brown Honda. They had burned through their savings, could not make rent, and had nowhere to stay. Their friends offered a couch for a few weeks. Then that ran out too. The car became their address. By Robert's account, they had walked away from steady paychecks, failed at their first business, and were starting over with nothing except a set of convictions about money that most people around them thought were wrong.

That period lasted about nine months. It ended when the two of them built a business that generated enough cash to cover their expenses without requiring either of them to show up for work every day. The turnaround was not dramatic. It did not happen because Robert got a raise or Kim landed a better job. It happened because they stopped selling their time and started building systems. They crossed, in Kiyosaki's language, from the left side of a diagram to the right side. And that crossing, he argues, is the most consequential financial move a person can make.

Rich Dad's Cashflow Quadrant was published in 1998 as the follow-up to Rich Dad Poor Dad, which had become one of the best-selling personal finance books in history. Where the first book explained the philosophy of financial independence through the contrast between two father figures -- one who worked for money, one who made money work for him -- the sequel gets more specific. It asks a question that the first book largely left unanswered: how, exactly, do you make the transition? What does it require? And why is it so hard?