Pros and Cons of the E Quadrant

Robert Kiyosaki, author of Cashflow Quadrants, discusses what he calls the E quadrant. The E stands for employee, which describes one way that people can enable cash to flow into their lives. Many people around the world are employed by other organizations. Those within the E quadrant…

1. Desire security. As a result, they seek out a lifestyle that will help them obtain security.
2. Shy away from risk. Most employees do not see a need to become educated financially.
3. Seek out benefits with their jobs including pay raises medical insurance, pensions, 401Ks, etc…

Security

There is nothing wrong with desiring to be secure but is a job really the best route to achieve security. I asked myself this question years ago: Whose job does it really belong to? Is it my job? I concluded that it was not. It belonged to the person who created the company. The owner can take the job when they wanted to. 

Risk

Some who gain employment may believe there is no risk from getting a job or position with an organization. Since there may not be much security with a job, that in itself is risky. You take a risk daily as an employee by relying on another organization who can take the position or job away because it doesn’t belong to you. 

Benefits

We learned above that jobs are not secure. It is also risky to rely on a job as the only source of income and cash flow. Many jobs or owners of organizations chose to either give employees benefits or only the position to work. Some organizations may offer days off, sick days off, 401Ks, and/or insurances (i.e. vision, dental, and/or medical). This may be considered as a positive for most people, especially individuals with children. Benefits allow employees to better take care of themselves and their families. Organizations receive group insurance packages that makes the monthly premiums paid by employees less expensive than having to pay for insurance separately. 

After I assessed these elements and many more (including paying the most in taxes compared to other cash flow methods), I knew being an employee could not be a main source of cashflow for my home.

FYI: We will highlight a little about taxes in the upcoming days. Note: I am not a financial advisor nor tax professional. It is always best to speak with an accountant about taxes. 

Let’s chat more about the cashflow on tomorrow. Chow for now!

Psss….If you are ready to jump into the B quadrant because you may know about it already, want to lower your taxes (obtaining some tax breaks) and want to control your cashflow, CLICK HERE to learn what my husband and I have been doing for a little over two years.