Four Quadrants of Wealth from "summary" of SUMMARY - Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide To Financial Freedom By Robert T. Kiyosaki by Shortcut Edition
The "Four Quadrants of Wealth" are a concept developed by Robert T. Kiyosaki which divides individuals into four categories, based on how they earn and manage their money. These include the categories of employee, self-employed, business owner and investor, each of which has its own unique advantages and disadvantages.- Have you heard of the four quadrants of wealth? It's a notion that got popular following Robert Kiyosaki's book, 'Rich dad's Cashflow Quadrant'. In this book he explains how different types of people create wealth in different ways, focusing on four categories: employees, business owners, investors and traders.
- Understanding the different quadrants of wealth will help you identify what approach to money works best for you. Each quadrant has its own unique advantages and disadvantages - make sure you explore each one thoroughly in order to choose the right path!
- Employees are people who work for someone else and rely on a salary or wage in order to make money. They don't have much control over their overall financial security as they get whatever the boss gives them.
- Investors put their money into outside investments such as stocks or real estate. Different asset classes provide different levels of risk and reward. For example, stocks offer greater market growth potential than bonds but come with more volatility.
- Business owners are those who start and operate businesses; oftentimes investing financially into their endeavor to ensure the long-term success of their operations. By taking extra risks, owners can gain greater rewards, but if something goes wrong they could end up with heavy losses.
- Traders engage in the buying and selling of stocks and other instruments over shorter time frames, looking to maximize profits with quick gains in price. This is typically considered high-risk and requires a great deal of understanding of the markets before engaging in this type of strategy.
