#4 cashflow quadrant how to

They are generally very conservative people (i.e. Long-term investors are those who have a long-term investment plan and are engaged in that plan to ensure it helps their financial objectives. Being a gambler is just as dangerous, if not more dangerous, than being a cynic. Sadly, those who rely on luck end up losing most of the time. To them, investing is just like playing in the casino – they think investing is just down to luck.

When it comes to investing they have no plan to manage risk and say things like “ You Don’t Need Insurance” and “You Don’t Need Savings In The Bank”. “Gamblers” people are the opposite of “cynics”. “Cynics” people are often afraid to make mistakes, so they spend all their time studying investments until it’s too late to execute them viably. They know everything that could go wrong in an investment, so talking to them makes you feel discouraged, or even afraid, to invest. They will say things like “ You Don’t Need Superannuation“ or “ The Property Market Is Going To Collapse” They are the ones who tell you how and why you will be swindled in every investment opportunity you’ll get. “Cynic” people are the experts on why investing will not work. However, there are others who can’t even be bothered engaging with a financial planner and often get a nasty suprise once they get to retirement and realise how little they have saved up. This can be a lot better than it sounds – there are many members of Master Your Money Now who know they should be doing something but just don’t know (or can’t be bothered) knowing what, hence they engage our services. They spend their entire lives working and satisfied with their retirement plan. They did not bother to do anything about their money and allow it to sit somewhere doing nothing. “I Can’t Be Bothered” type are people who have convinced themselves that they know nothing about money and will never understand it. There are three types of Smart Investors that Robert speaks about. However, when it comes to investing, they’re often uneducated. “Smart” investors are educated and intelligent people. One of Robert Kiyosaki’s message is that “savers are losers” and over the long run, that is true.ĭon’t get me wrong, saving is important, but if you want to achieve true financial wealth you have to invest.

With cash and term deposit rates being so low (I prefer to use the word insulting), they will continue to work hard for their money, rather than have their money work hard for them. Sadly, savers over the long run are not going to finish up with much more than borrowers.

#4 cashflow quadrant how to

Savers spend their time trying to save pennies instead of learning how to invest. They don’t like being in debt and not willing to take any financial risks. They prefer to save money rather than investing it. These people save small amounts of money in low-risk, low-return vehicles such as cash or term deposits. These people may have some assets, but their level of debt is simply way too high and they are likely to heavily reliant on their active income (as it is their only source of income) to make ends meet. These people can look “rich” and/or like “an influencer” because they own expensive things and/or go on expensive holidays, but the reality is their net wealth (assets less liabilities) is very low. They often have multiple credit cards and are buying things like nice cars (with car loans), brand new TVs (on afterpay) and having overseas holidays (funded through a credit card). It is important to note that not all people fall who under this category are low income earners – there are many “rich” people who would also fall under this category too.īorrowers are those who borrow to invest (which can be a good thing) but are also borrowing to fund their lifestyle (which is never good). Rough estimates would suggest that 50% of the adult population would fall under this level.

They either spend everything or more than their regular income. The seven levels of investors according to Robert Kiyosaki are as follows: The fact is you cannot skip a step – you cannot go from level 1 to 5 without going through levels 2, 3 and 4. It helps you understand the process of building wealth and the mindset required to progress through each level.It helps you understand where you are now and what your next step is.This list is fantastic for a couple of reasons: In this book he has identified seven levels of investors which I want to share with you. I have been just reading “ The Cashflow Quadrant: The Rich Dad’s Guide to Financial Freedom” by Robert Kiyosaki, author of the well known, must read, financial classic, “ Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!“.