Understanding the Cashflow Quadrant: What Is the Difference Between an S Business and a B Business?
The Cashflow Quadrant is the creation of Robert Kiyosaki and is a barometer for determining what your priorities as an individual are. The differences between an S based business and a B based business may not be large in comparison to your income but the lifestyles they create are vastly disparate.
My uncle owned his own retail shoe store when he first heard about the cashflow quadrant. He placed himself in the B quadrant and thought that was that. A few years later, when he returned from a short vacation, he realized he was self-employed.
Two of his employees had quit while he was gone, and a third was threatening to quit.
This was a mindset change for my uncle. His shoe store was a 4th generation business. In particular, my uncle's father drilled him every day to know the state of his business, and not let other people have the reigns.
My uncle was not quite the controlling person that his father was so he was not there to open the store or stayed late to close the doors. But he did keep himself involved enough that his absence significantly effected the outcome of day to day operations.
An S based business can be wildly successful. Lawyers, Doctors, Steemit authors, or Traders can make millions in a year. There income will always be dependent on their presence in the business. If something happens to them, the income of the business loses its catalyst.
The B Based Business
"The definition of wealth is: the number of days you can survive without physically working (or anyone else in your household physically working) and still maintain your standard of living." -Robert Kiyosaki
We build B based businesses so that we can have lifestyle. A lifestyle is when we have time and money.
The difference between a B based business and an S based business is a system. In an S business, an individual is the system - my uncle found that out after his vacation.
A B based business is designed so that a system runs the business. Steemit can become a B based business for you with tools like Steemvoter and Streemian.
With enough Steem Power, you can set automatic voting to occur such that you are making several hundred dollars a week from curating. Depending on where you live in the world, that may or may not be enough to have a lifestyle - in the U.S. it could be the average income of an American.
Since you are reading this article, you have the opportunity to build a B based business on Steemit. We are still in the early adopter phase.
We write articles to connect with people, build a following, earn Steem Power, and build a business. There will come a day, that if we wanted to, we would not have to write an article every day or even once a month.
I enjoy writing, so I don't think I will stop completely. But the idea of receiving several thousand dollars a month by simply setting up a curation bot excites me. That doesn't mean I stop interacting with people (though an introvert with the Steem Power could do such a thing) but it does mean that the work I am putting in now is building a system that will one day work for me.
me for more great content.
I have been in the two left quadrants for most of my adulthood. I have been working on getting to the right side of the quadrant. With the positive lifestyle changes I have been making in my life I will get there. In regard to the tools for Steemit and their relationship to passive income. That is a very exciting proposition.
You have a focus and work ethic that is uncommon in men - you'll get there.
The tools in Steemit and the opportunity is an exciting proposition indeed.
Thanks for the knowledge. Robert Kiyosaki first taught me about the cash flow quadrant. It's a good revision for me. If you have read it and udidnt get it, pleas read it again cos it will determine whether u will be rich or poor. No two ways about it
Very well explained. I thought Cashflow Quadrant was a better book than his most famous Rich Dad Poor Dad.
It sets out the ideas of the different ways to make money rather clearly and doesn't preach too much on which way is better. Although he clearly has a preference for the right hand side of the quadrant.
He does have a preference. Cashflow Quadrant is enjoyable to read and more nitty gritty details.
Have you read any of his other works besides those two?
I've read two other books by him - "what rich parents teach their kids that poor parents don't" and "what the rich invest in that the poor and middle class do not". Honestly, they weren't as good as either cashflow quadrant or rich dad poor dad.
Maybe it was the topics... didn't have much interest in communications management or 4 chapters on the different types of investors. Maybe he had a different ghostwriter but the style felt different as well.
I'm looking to check out his book on options. Have you read that one?
I did not read the two you read - now I don't need to haha.
I have not read his book on options - heard it is good.
Lydon, great explanation of Kyosaki's cashflow quadrant. Upvoted, resteemed, and following, George
Thank you for the kind words George.
Thank you for posting about this!
You are most welcome! Thank you for your time reading it. :)
Fantastic post! Cash flow is important to understand!
Thank you! I grew up around entrepreneurs and am one myself - this information was fed to me from an early age.
Then you are already on you way up!
Indeed!
Very clear and concise explanation. Thank you.
You're quite welcome. Thank you for your comment.