If you have ever read Rich Dad Poor Dad by Robert Kiyosaki, you are more than likely already familiar with the ESBI Model. It is a fundamental principle he relies on to illustrate how people make money and how their mentality impacts their financial destiny.
What Does ESBI Stand For?
ESBI stands for:
- E – Employee
- S – Self-employed
- B – Business owner
- I – Investor
These are the four types of income earners, or cash flow quadrants according to Kiyosaki.
E – Employee
- You work for someone else.
- You earn a fixed salary or hourly wage.
- Your income depends on how much time you work.
- Job security is important to you.
Mindset: “I need a safe and secure job.”
Problem: If you stop working, you stop earning.
S – Self-Employed
- You work for yourself.
- Examples: freelancers, doctors, small shop owners, consultants.
- You might make more money than an employee, but you’re still trading time for money.
- You are your own boss but also your own worker.
Mindset: “If I want it done right, I have to do it myself.”
Problem: If you don’t work, your income stops.
B – Business Owner
- You own a system or company where other people work for you.
- You earn money even when you are not actively working.
- You build systems and teams.
Mindset: “I want to build something that works without me.”
Benefit: You have time freedom and scalable income.
I – Investor
- Your money works for you.
- You invest in things like real estate, stocks, or businesses.
- You earn passive income from your investments.
Mindset: “I use money to create more money.”
Benefit: Financial freedom and wealth over time.
Why Is the ESBI Model Important?
Robert Kiyosaki believes that most people stay stuck in the E or S quadrants, trading time for money all their lives. But real wealth and freedom come when you move into the B and I quadrants where money works for you not the other way around.
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