The Cashflow Quadrant, a personal finance model, categorizes individuals based on their income source: Employee (E), Self-Employed (S), Business Owner (B), and Investor (I). This framework offers a way to understand different financial mindsets and pathways to wealth creation. For example, an employee earns income through a job, a self-employed individual through their own services, a business owner through a system they’ve built, and an investor through assets. Understanding these distinctions provides a foundational understanding of potential financial trajectories.
This model emphasizes transitioning from the left side of the quadrant (E and S) where active income is paramount, to the right side (B and I) where passive income and leveraged systems generate wealth. Successfully navigating this transition offers the potential for greater financial freedom and security. While the quadrants origins lie in Robert Kiyosaki’s teachings, its principles resonate across various economic landscapes and offer valuable insights into building long-term wealth.