CASH FLOW QUADRANT
I hope na marami kang natutunan from our last topics on Getting Rich Mindset – 7 Part Series. And I hope that you apply everything you have learned.
You want to become successful financially diba? Dapat alam mo kung ano ba dapat ang ginagawa mo para mag succeed ka financially. Kasi lahat gusto mag succeed, ang tanong lang, “What am I doing today to reach my financial goals?” Now we will answer that… ang ise-share ko sayo ngaun is the famous “CASH FLOW QUADRANT” by Robert Kiyosaki.
Im going to share to you the interpretation and understanding tungkol dito.
Ready ka na? Let’s proceed…
In his books Rich Dad – Poor Dad and Rich Dad’s Cash Flow Quadrant, there are four types of people in the financial world:
Lets get started on the left side of the quadrant, as you can see there’s E (Employee) and S (Self Employed). They comprise the 95% ng population natin. Unahin nating pag-usapan ang mga Empleyado. They are the people who “work for someone else”. Yes, they are smart, matatalino, at masisipag. But no matter how smart, intelligent, or diligent they are, ang sweldo or kita nila ay FIXED (426/day, 10K per month, 15K per month, 20K per month etc.) Meaning kahit akuin mo pa ang trabaho ng workmate mo,at mag overtime ka pa, yan pa rin ang kikitain mo, kaya nga FIXED eh. That’s why they dont have financial freedom. Lets talk about an Employee who’s earning 10,000 per month. Question: Nakukuha ba ng buo yan? Diba hindi? Kasi may mga kaltas or bawas pa yan. Look below:
Ordinary Employee Salary: P10,000.00 / month
Income Tax Return: = P1,000.00
SSS, Pag-ibig, Philhealth: P1,000.00
Food per day: P100.00 x 30 days = P3,000.00 (Kung mapagkakasya mo)
Fare per day: P100.00 x 30 days = P3,000.00
Mobile load per week: P500/month = P500.00
Income Tax Return: = P1,000.00
SSS, Pag-ibig, Philhealth: P1,000.00
Food per day: P100.00 x 30 days = P3,000.00 (Kung mapagkakasya mo)
Fare per day: P100.00 x 30 days = P3,000.00
Mobile load per week: P500/month = P500.00
Your Net Salary: P1,500.00 / 2 (15th & 30) = P750(Totoong Sweldo)
Grabe! As an employee pala, hindi pala 10K per month ang kita, kundi 750 lang. Why? Kasi yung mga kinaltas above (Tax, Insurance, Food, Transportation, and Load), ang mga bagay na wala kang ilag, mga bagay na hindi pwedeng hindi tanggalin. Tama ba? But wait, yung 750 na natira maitatabi mu na ba? Hindi pa rin, kasi magbabayad ka pa ng Kuryente, Tubig, Groceries, etc. So may matitira pa ba? Obviously wala.
Another sad thing about being an Employee is that they lack time freedom. Why? Ang working hours ng empleyado is 8AM to 5PM diba? That’s 9 hours in total.
Pero the reality is, hindi lang naman talaga 9 hours ang binibigay nila eh. Kasi diba pag 8AM ang pasok, anung oras ka gigising? 7:59AM ba? Anu yun, isang ikot mu lang nasa office ka na? Hindi diba? Most likely, 6AM ka gigising, mag-aayos ka ng sarili, maghahanda ng pagkain/baon, at bibiyahe pa.
That’s 2 hours additional, so 11 hours na. Eto pa, pag 5pm ang out sa work, 5:01PM ba nasa bahay kana? Anu yun sa CR ka nakatira?
Maglalaan ka ng another 2 hours pauwi na bahay (of course traffic kasi Rush Hour na) so most likely 7PM kana makakarating sa bahay mo.2 hours additional, so its a total of 13 Hours! Imagine! 13 long hours para kumita lang ng maliit.
Eto pa matindi niyan, ang no.1 rule in employment is “NO WORK NO PAY” Pag di ka kumayod, wala kang kita. You have to trade your time para sa kakarampot na kita.
This scenario is what Robert Kiyosaki calls “The Rat Race”. Yung gigising, papasok, uuwi… Kinsenas -Katapusan susuweldo, pambayad sa mga bills, at iba pang gastusin. Tapos gising-pasok-uwi-susweldo-bayad bills, etc. Paulit-ulit lang ang ganitong routine over the years, and in the end you’re still stuck in POVERTY.
Kaya nga marami ng tumanda sa pag-EEMPLEYADO na ni turnilyo ng bisikleta hindi nakabili…
Is this what you want? Is this your game plan for financial success?
Now, pag-usapan naman natin ang mga Self-Employed. These people are professionals in their own field (Doctors, Lawyers, Accountants, Athletes, Artists. etc.), they want to do things their own way. For them, money is not that important. Recognition, honor, and praises it what keeps them going. Quality of work is much more important than money.
Self employed owned their own job. Meaning, sila ang BOSS na mga sarili nila. Yun ang lamang nila sa empleyado, kasi hawak nila ang oras nila, walang boss na nag-uutos sa kanila, wala rin silang time pressure. And hindi FIXED and income nila, Their income depends entirely on their working time.
But like employees, ang mga self employed ay “NO WORK, NO PAY” din. Ang Doctor, pag walang check up, may kita o wala? Ang Lawyer, pag walang hawak na kaso, may kita o wala? Jeepney driver, walang biyahe, may kita o wala? Accountant, mabulag? may kita o wala? Syempre wala! Panu makakita e h bulag na nga! haha!
Meaning, being self employed still doesn’t lead us to financial security.
The left side of the quadrant is the POOR side, according to Robert Kiyosaki. Tama naman talaga eh, no need for a debate. Walang yumaman sa side na yan.
Now, lets move on to the Right Side of the quadrant. There’s B (Businessmen) and I (Investors). They are the 5% of the population. They own huge amounts of WEALTH. Here, you have people working for you (B), and money working for you (I).
Lets start with Investors. These people make their money work for them. No hardwork. No sweat. They just put their money on stock market, mutual funds, time deposits, real estate,properties, etc. Their money grows while having coffee sa Starbucks, even while SLEEPING! Example, an investor puts his 50,000,000 pesos sa isang banko. Lets say na monthly, mag-iinterest ung pera nya ng 1% every month. How much ang monthly income nya? edi 500,000/month! Question: May ginawa ba yung investor? Ni-hindi nga siya pinawisan.
Sa lahat ng quadrants, especially kung currently nasa left side ka, dapat i-goal natin na maging Investor. Kasi its the smartest way towards financial and time freedom. We earn money effortlessly. We just let our money work for us.
Pero you might be asking, “How am I going to ‘jump’ from the left side of the quadrant, to the right side to become an Investor?” The answer is: You have to be a Businessman first. Get your experience and education as a Business Owner. It is your ‘stepping stone’ towards being an Investor.
Ok, lets talk about business. Of course when you own a Business, ikaw ang BOSS, and you have employees working for you. This gives you the time freedom. You can do other things with people you care about with less worries since you have a system and smart employees to run your business…
There are 3 types of business systems commonly used today.
- Traditional Business – This is where you develop your own system. Example: Sari-sari Store, Bakery, Car Wash, Beauty Parlor, Eatery, etc. Maliit lang ang kapital sa traditional, pero maliit lang din at mabagal ang ROI (Return of Investment)
- Franchising Business – This is where you buy an existing system. Example, McDonald’s, KFC, Jollibee, Mang Inasal, etc. Malaki ang kapital sa ganitong klase ng negosyo, mga 35M to 50M, franchise fee pa lang yon. Pero malaki ang kitaan dito, mga 500K per month.
- Multi-Level Marketing / Network Marketing – where you buy into and become part of an existing system. In this type of business, pwede kang magstart sa maliit na kapital, with big income potential. Wala ring overhead expenses (Office, tubig, kuryente, pasweldo na tao, etc.) sa Network Marketing Business.
Remember: You may lose two or three companies before you build a successful business.
How to become a B (Businessman):
- Find a mentor, someone who is at the peak that you want to achieve.
- Buy a franchise.
- Join a network marketing company.
If you choose to join a network marketing company, eto ang mga tips ko para sayo:
- Join a company with proven track records and distribution systems
- Get involved with a company that is not based on hype.
- Find a company with good retention program.
- Have a company you can share confidently with others.
- Have an on-going long term educational programs to develop your mindset,personality,and skills.
- Find a Mentor. Learn from leaders, not from advisers.
- and lastly, and very very important… Treat your business with a mentality that you’re going to build a business that will last for the next 10-20 years.
A system is your bridge towards financial freedom. If you are able to run a successful business system, then you are on your way in becoming an Investor.