The Four Quadrants

About ten years ago, I came across a book “Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom” by Robert Kiyosaki. Those who are interested in finance and investment, most likely have come across the author’s work at some point in time.

Mr Kiyosaki has written a good number of books, but this particular one stands out. Basically it describes which financial path we are on at a given time in our life. The book was basically a sequel to his previous book “Rick Dad Poor Dad”.

The four quadrants are (E)mployee, (S)elf-employed, (B)usiness owner, and (I)nvestor.


This is where the majority of people spend most of their working life in.
E is also where Mr Kiyosaki’s ‘Poor Dad’ is. In this quadrant, one is basically set to work for someone else. One would go to school/college/university to get educated, then use whatever one has learnt for the benefit of the employer.
The crave for certainty and security is the main reason for them to remain in this quadrant.


This group of people are somewhat opposite to the E group, in that security and certainty are not the main concern. Instead, they start thinking outside the box and take things into their own hands.
The S group could be on to something bigger, since they are no longer restrained by the worry of security, or self-limiting emotions. In terms of success, the sky is the limit, you may say. But not really. Why?
Explanation to follow in the next quadrant.



Now that a self-employed person is taking control of his/her destiny, success is pretty much self-determined. So it should be only limited by the imagination, right?
In theory, yes. But in reality, it’s a little complicated.
A person only has 24 hours a day. As much as one can work, there is only so much one can accomplish in a day.

So in order to break free from these constraints, we need delegation and teamwork, which are the ‘success-multiplier’. Business can be viewed as a collection of systems representing an idea or vision, in which its core functions and competencies are delegated, where a team of people work to grow the business, and the founder of the business may not be needed to sustain the business.




This quadrant is a transformation quadrant in that money earned from the other quadrants are converted into wealth. Ultimately, Mr Kiyosaki said, anyone who wishes to be rich needs to move into this quadrant to get the money snowball rolling. It is in this quadrant that the sweat and blood of those who worked continue to work for them. The sweat and blood are the assets that generate return 24/7.


From One Quadrant To Another

People have different experiences in their life, different expectations, different outlook in life and so on. So most will start out in one quadrant and move to different quadrants throughout their life. Some will remain in one quadrant for life, while others will be in more than one quadrant.
To achieve lasting financial freedom, it would be hard not to end up in the ‘I’ quadrant whether partially or completely.
In my case, I am firmly in the ‘E’ quadrant, and I am also in the ‘I’ quadrant since, I have investments in financial assets (pension, registered accounts).
I am always looking for a side hustle to boost income, i.e. looking to step into the ‘E quadrant as well.
What about you readers? What situation are you in? Are you more in one quadrant than another?









Standing on the shoulders of Giants

As a kid, I was not really taught anything about finance or money management, but my mum put this idea of saving in me when I was around ten. Interest rate for savings during the 80’s was as high as 10%. She opened a children’s savings account for me and put a few dollars in it just to get started. When the interest was calculated at the end of a period, I was elated to see that the balance on my account had increased.
Fortunately, through the ups and downs in life, that habit of saving stays with me. But saving up, however hard and seemingly impossible, is just half the story.
There have been numerous sites on how to be financially savvy. How to make your money work hard and harder. But I did not really pay much attention to it, until a couple of years ago, when Mr Money Mustache was featured on the newspaper Globe and Mail . That’s when it dawned on me about the concept of FIRE (Financial Independent Retire Early).
To be honest, considering the age that we are in, and how much we have got so far, it’s hard to imagine we can achieve RE, although there is still hope for the FI part 😉
There’s still a whole lot of catching up to do. Kinda like a ship sailing towards the shore, we could only see white fluffy clouds at the horizon, unlike Mr Money Mustache, Financial Samurai, jlcollinsnh, Millennial Revolution, Mr Tako Escapes , Go Curry Cracker, and many, many more of the FIRE crowd, who have long reached the shore and dancing around the bonfire of joy and freedom!! 🙂
Regardless, we appreciate a lot what the FIRE crowd has done in helping us to search for that light of salvation, of direction to self-fulfillment, to give me a kick in the b*tt to wake me up to a kind of life that seems illusive even in the best of times.


Burning gas, burning cash

“Congratulations Mike*. You have passed the trades exam and are now fully qualified as a technical specialist!”
“Thanks, now I can get the pay raise!”
“Ya, but with all the deductions, the net amount is just around $10 more a day”
“So $300 a month… that’s enough for a car payment…”
I was stunned. I could not believe what I heard from my good friend. I was also saddened by the fact that my friend actually thought of taking out a loan to purchase a fast-depreciating asset!
Seems like everybody nowadays is thinking of buying a newer car. Another colleague of mine has taken out a loan to buy a BMW. Another one is contemplating a loan to buy a Jaguar(!) The marketing department of the auto manufacturers or dealers must be doing a darn good job.
It’s not like this is their first time buying a car, they each already have a car or more, and a pretty new car too.
When I asked the friend why was he thinking of getting a new car? He said that with 3 growing kids, they are fighting for space. But he already has a big SUV (Toyota Venza), which was bought three years ago. There really is no sensible reason to get a newer car.

(Back of a 2010 Venza)

When I was a kid, my parents had a two-door Honda Civic compact and I had to share the back seat with my sister.


Abraham Maslow, the American psychologist who was best known for creating Maslow’s hierarchy of needs (, which describes the stages of growth in humans. Maslow used the terms “physiological”, “safety”, “belonging” and “love”, “esteem”, “self-actualization”, and “self-transcendence” to describe the pattern that human motivations generally move through.
However, at least in the developed, or so-called ‘First World’, nations, the power of marketing has flattened this pyramid of hierarchy. So the different stages become mixed with each other.


With the blurring of these stage boundaries, what was used to be in the “esteem” stage, has been pushed down to the “safety” stage. In other word, the ‘wants’ have now become the ‘needs’. This does not bode well for typical consumers, who will inevitably by saddled with more debt. They are pawning  their future, and that of their children, for present short-term gratifications or to fulfill some emotional needs.
Among the more financial savvy, Financial Samurai says that we should not spend no more than 10% of our gross income on wheels. This is a good rule of thumb. Sure, we might not get the car of our dream, so if we want better car choices, get out there and earn more 🙂 …. whether getting a better-paying job, or side jobs. Yes it can be tough. So either we have it tough now, or we have it later. All that debt will come back and haunt us if we let it grow out of sight.

* Name has been changed for privacy of all concerned.


Hello & welcome!

This is our very first post. We have embarked many, many moons ago on an adventure: to save, and save a lot

Life revolves around finances…

From the moment we are born, to the moment we leave this world, money is involved. Unless we live our whole life in the middle of the great Amazon forest, in which case you most likely won’t even be reading this blog 😉

And that’s one reason we work throughout our lives, hopefully have enough left over to save, and eventually have a decent, worry-free life in the twilight years. For some of us, the journey through life may hit a roadblock or two along the way, and further affects our ability to retire.

I must say we have a pretty fortunate journey so far *knock on wood*. I am grateful for what we have achieved so far.