A large part of Kiyosaki's teachings focus on generating passive income by means of investment opportunities, such as real estate and small businesses, with the ultimate goal of being able to support oneself by such investments alone. In tandem with this, Kiyosaki defines "assets" as things that generate cash inflow, such as rental properties or businesses—and "liabilities" as things that generate cash outflow, such as house payments, cars, and so on. Such definitions are somewhat based on the concept of negative gearing. Kiyosaki also argues that financial leverage to be critically important in becoming rich.
Kiyosaki stresses what he calls "financial literacy" as the means to obtaining wealth. He says that life skills are often best learned through experience and that there are important lessons not taught in school. He says that formal education is primarily for those seeking to be employees or self-employed individuals, and that this is an "Industrial Age idea". And according to Kiyosaki, in order to obtain financial freedom, one must be either a business owner or an investor, generating passive income.
Kiyosaki speaks often of what he calls "The Cashflow Quadrant" a conceptual tool that aims to describe how all the money in the world is earned. Depicted in a diagram, this concept entails four groupings, split with two lines (one vertical and one horizontal). In each of the four groups there is a letter representing a way in which an individual may earn income. The letters are as follows.
* E: Employee
* S: Self-employed or Small business owner
* B: Business owner
* I: Investor
This article was quoted from the Wikipedia. For more info, please visit http://en.wikipedia.org/wiki/Robert_Kiyosaki
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Saturday, August 9, 2008
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