Different Quadrants, Different People

People of different quadrants have fear, doubts, beliefs, strengths, and weaknesses, but all people respond to them differently.

We all have acquired technical skills but we have to learn emotional abilities as well. Also, when we faced difficulties then how we respond to them, will decide our future. When we face difficulties then either we go back to our comfortable quadrant or face it and choose to be free. This ability is much needed to become successful in our life.

Even though we’re all human beings. when it comes to money and the emotions attached to money, we all respond differently. And it’s how we respond to those emotions that often determines from which quadrant we choose to generate our income.

Changing quadrants is often a change at the core of who you are—how you think and how you look at the world. The change is easier for some people than for others simply because some people welcome change and others fight it. And changing quadrants is most often a life-changing experience.

When we belong from the E quadrant then we talk about safety, security, good paycheck, etc. E quadrant people prefer to get a certainty, extra benefits. They have security is more important rather than money.

S talks about their commission on an hourly basis or percentage of the entire project etc. These people prefer to be their boss, like to do their work, like independent rather than money. In many respects, they are true artists with their style and methods of doing things.

B quadrant people talk about hiring new talent, new president etc. for business. They are the opposite of S; they hire people rather than do work themselves. They like to delegate works; they keep thinking to produce better growth. Business requires leadership skills that help us to bring out the best from people.

And I quadrant people talk about the rate of return, risk-adjusted return etc. For the understanding core of the people, we need to be a listener. This helps us to understand the core of people and we can lead them.

People think that they only get financial security by establishing a business. So, for that many starts from Employees to self-employed and then transfer to business. Many from self-employed to business. And many employees to business but not all can achieve success because each quadrant requires a different type of human and mental skills. When S goes for a B then first has to learn to prepare the system and hire competent staff. As he as a system in S quadrant.

When people try to shift from E or S quadrant to the B quadrant then they have such thoughts in the mind. The people who try to shift from E or S to B then they think to have a better product or services compared to XYZ but the B quadrant requires a better system.

I quadrant is the last quadrant where we can able to convert our money to wealth.

For creating wealth, we require Other People’s Time and Other People’s Money. So, E and S quadrant people are other people and B and I use their time & money to creating wealth.

When we compared the cash flow of rich person and middle class than rich have the majority of ~80% income from investment and ~20% as wages. Whereas the middle class have reversed to it, their ~80% of income comes as wages or commission and ~20% from investment. And for becoming wealthy, we need to get passive cash flow from different assets.

The definition of wealth is the number of days you can survive without physically working (or anyone else in your household physically working) and still maintain your standard of living.

When we do not focus on this part then when we have an extra income, we buy liability from it and liabilities will result in the expense. This is a wrong practice. We also make some wrong practice of making an investment which generates income after completion of our working years. We need to focus on making an investment that generates income during our working years and help us to becomes Financially free.

People avoid investment due to risk but there are possibilities to earn a decent return by lowering risk. We have to learn it. Those who want a safe return, avoid taking a risk but rather to avoid taking a risk, we need to learn to manage it. When we able to learn such skills then the “I” quadrant always welcome us.

Read for more detail: Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom

I am grateful to Mr.Meihol Jhaveri (Founder of Gatisofttech) for development of Lucky Idiot website.

Why Don’t you Get a Job? – Cashflow Quadrant

With the continuation of the “Rich Dad, Poor Dad” series, I am hereby starting a series from the book “Cashflow Quadrant” which help us identify our core competencies and which area is suitable for us. And help us to achieve our financial freedom.   

The author explains that when he was homeless, unemployed with his wife and living in the car. Both of them did not get any job but they tried to do some work so that they get money at least for food and fuel their car. It’s always been important for such situations to have job security, steady paycheck. They were graduated and have a good skill set, but they have decided to achieve financial freedom so that they don’t have to work for the rest of their life. The author has achieved the initial part of freedom in the 4 years and remaining in the further five years.

We feel that we need money to make more money but we can see that author got financially free from being homeless once upon a time (Rags to Riches). Then we might have a question in our mind that what is needed to become financially free? The answer is – we require to have a dream, determination, willingness, skill to learn quickly, ability to use our skillsets.

Where we fall under the quadrant, that will identify the way cash flow comes to us.

We have seen in series of rich dad poor dad that – What our schools and poor dad teach us is to get good employment or self-employed. They don’t teach us to do investment. While rich dad advises us to go to school, graduate, build a business and become an investor. This book is for those who are E or S and want to achieve B and I. This is not an easy journey to shift from steady paycheck to volatile paycheck of B and I.

Different quadrant requires a different skillset, different psychological requirements. Employees and self-employed are low with risk-taking behaviour whereas B & I are known for their risk-taking behaviour. B & I require to have a vision (not a Vision from WandaVision ?) that enhance their future success. 

For example – a doctor can be work at a private hospital as an employee or start a private practice as self-employed or open a clinic & hire other doctors as an employee to become a business owner or make an investment in other businesses.

We can become a millionaire or go broken in any of the quadrants, no quadrant gives grantee of financial freedom. Many of us show off due to social fear that money is not at all important for them. But we are working a whole life for the money and then showing off that it’s not important then it’s a wrong thing to do.

Rich dad believed that life is more important than money, but money is important for supporting life. For doing many things in life, we require money. We cannot buy happiness through money but what we need to make us happy is bought through money so that money is important. The major thing upon this all is we have to learn that money work for us, rather we work for money.

For knowing which quadrant suitable for us, we need to work in all four quadrants. These help us to know our temperament, likes, dislikes, strengths, and weaknesses. So that we can choose our suitable quadrant.

If we try to understand that financial freedom is a freedom of time. Getting time available with family, for health, for well-being. Not anyone quadrant is better than others but it’s upon us which one suitable to us. But if we choose to opt for B or I then we need to put a huge effort because the skills required in B and I do not teach us during our school days.

Read for more detail: Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom

I am grateful to Mr.Meihol Jhaveri (Founder of Gatisofttech) for development of Lucky Idiot website.

STILL WANT MORE? HERE ARE SOME TO DO’S – RICH DAD POOR DAD

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These are few things done by the author. We need to take action and consistently performing the same for achieving the goal. We have to learn from others, experiment those learning and has to do what is really suitable for our temperament.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation. 

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!

GETTING STARTED – RICH DAD POOR DAD

There is an opportunity available, we need to train ourselves to see it. There are 10 steps mentioned by the author which he has used for creating wealth.

1) Find a reason greater than reality: the power of the spirit

There is always a reason for doing something which is a combination of what wanted to do and what we don’t want.

The author mentions that he does not want to get employed, want to get financially free which provides him with freedom of time. If our reasons do not strong enough then we do not get ready to work hard for doing a thing which we have decided to do. We should understand that without a strong reason or purpose, anything in life is hard. First, complete this step before proceeding further.

2) Make daily choices: the power of choice

We have a choice while we get a rupee. With this rupee, we can choose to become a rich, poor or a middle class through our spending habits. As we have discussed the assets and liabilities so that we need to work on increasing our assets column.

We do not have money then OK but how we spend our time, money which is our choice. We have a precious time with us and we can choose it for learning or just pass it out. As we have a single rupee and choice is us for how to use it. Similarly, we have every single minute and the choice is us how to spend it. When someone teaches us something then without getting arrogant, we need to understand why he is saying such, keep our mind open. We need to keep on learning and after that requires to make a mistake which helps us to understand it in detail. We can learn from the mistake of others. We have to invest in our greatest asset which is our mind. One or two of the successful investment does not make us a successful investor but we need to keep on learning and growing.

3) Choose friends carefully: the power of association

We should not have a friend with comparing to the financial statements, rather we have a friend by looking at their vow of becoming friends. We can learn from rich or middle-class friends also.

Many of the people have their point of view and we need to listen to them with an open mind. We can come to know something new also. We need to know what we are doing and true to ourselves. We do not have to go with the crowd for wealth building.

4) Master a formula and then learn a new one: the power of learning quickly

We have to learn many things and have to master particular things. We have to be disciplined to implement what we have learned. After master into the one learning, we need to move to another learning to master it. In the current fast-changing world, we need to learn fast otherwise our learning will be outdated.

5) Pay yourself first: the power of self-discipline

If we do not have self-control, then we cannot able to become rich. Without self-discipline, lottery winner also broke.

The three most important management skills necessary to start your own business are the management of 1.  Cash flow 2.  People 3.  Personal time

These skills help us to grow and richer but require greater self-discipline. So that pay yourself first is self-discipline and important concept.

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This means what Mr Buffett has mentioned

Income – Investment = Expenses

We should not get trapped of the liabilities and if we owe liabilities then we should not work to pay for it rather others need to work to pay for it.

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Rich knows that savings and investments are for creating more money, not to pay bills.

This rule does not encourage self-sacrifice or financial abstinence. It doesn’t mean to pay yourself first and starve. Life was meant to be enjoyed.

06) Pay your brokers well: the power of good advice

Many a time, we try to save cost and focus on removing intermediaries but we forget that paying well to the professional help us. They provide us with a piece of useful information and services which can help us well.

We have to separate genuine and fake professional and then appoint them as our advisers.

As we have seen that we require to have the skill to manage people. The real skill is to manage and reward the people who are smarter than you in some technical area.

07) Be an Indian giver: the power of getting something for nothing

As we all are an Indian and we people want to know how fast they get their money back.

Wise investors must look at more than ROI. They look at the assets they get for free once they get their money back. That is financial intelligence.

08) Use assets to buy luxuries: the power of focus

It seems easy to use assets column to build a cash flow but difficult in practice. When we are on a diet, many noise and temptation affect our strict actions do not follow our plan. Similarly, when we have prepared a plan to follow our investment and build assets column then outside noise and temptation to fulfil the needs going stop us. In the current environment, very easy to get a loan for any need. And that creates a temptation among us. But we should focus on the creation of the assets column rather bring liabilities on the balance sheet.

Majority of the people cannot able to master their self-discipline and that stops them from becoming rich.

I do not say that do not buy a luxury or stay away from it. But rather to buy it through the liabilities, buy it from the cash flow generated from the asset’s column. And till the time, we do not build our assets column, we have to stop our temptation.

SIMPLE IS BETTER – ISSUE -1 – BASIC NEEDS V/S ESTEEM NEEDS

09) Choose heroes: the power of myth

When we have a hero, we try to become like them. And this act helps us with lots of learning. I have a hero in my investment career who are Neeraj Marathe Sir, Kuntal Shah Sir, Warren Buffett, Charlie Munger, Howard Marks, Benjamin Graham, and my friends Mr Amit Pandey, Mr Swapnil Modi. I learn from them; I look at them and try to develop skills into myself. These concepts teach me a lot. Having a hero inspire us to make a decision and act to achieve our desired goal.

10) Teach and you shall receive: the power of giving 

When we want to receive something, first we need to give it to others. As a famous saying – Give respect, take respect. So, what we give, we receive it in a multifold.

So similarly, when we teach to those who want to learn then we get more learning in return. With the same mindset, I have started writing a blog so that I can distribute my learning to others and I got multifold learning over some time. I still keep distributing and keep getting back in return. And for that, I am grateful to all the readers.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation. 

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!