IF 92 - Escaping the Rat Race: Insights from Robert Kiyosaki's Cashflow Quadrant

Kenny reflects on financial stability and shares his journey with home renovations and the challenges faced by contractors. He introduces Robert Kiyosaki's book, 'Cashflow Quadrant,' which he credits for transforming his mindset about money and time. Kenny aims to offer practical advice to help listeners break out of the grind of trading time for money, discussing the four quadrants—Employee, Self-Employed, Business Owner, and Investor. He connects these insights to his own experiences and encourages listeners to make strategic shifts towards financial freedom. The episode ends with a personal story highlighting the importance of finding balance and treasuring family moments.

00:00 Introduction: How Long Could You Survive Without Income?
00:08 Personal Update: Renovations and Respect for Contractors
01:29 Book Review: Cashflow Quadrant by Robert Kiyosaki
10:30 The Four Quadrants Explained
12:23 Personal Reflections and Call to Action
15:57 Balancing Work, Health, and Family
17:52 Upcoming Interview and Closing Remarks

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Transcript

Speaker: 0:00

If your income stopped today, how long could you survive? If that question makes you nervous, this episode is for you.

Speaker 2: 0:08

Welcome back, everybody. Kenny Johnson here, recording from the new baby room. That's right. we are getting some work done on our house right now and we had a den, which was our sort of cave that, was the TV room, the, just like the take a nap room. And as we are adding another family member to the household, here I am. And I just want to give huge, huge praise for, all you contractors out there who are doing work. granted you are the sometimes bane of my existence in regard to frustrations and things not happening the way I want them to go. but also you are the ones that keep us going. moving forward, I was a contractor in the landscaping business for 10 years. And, I have just a huge respect for those that are doing that. And of course I'm not perfect in my management skills or, investing, skills. So there's no perfect person out there. But, the guy that I'm working with now, he's just doing a great job. he worked really late today and I actually wasn't happy that he was working late because I feel like he needed to be home, but, it's looking really good. So guys, today's episode, we're going to be talking about a book review. this book is going to be. One of the books that was instrumental in my early, mindset, development. And honestly, I could do with another reread of this one because it just has, I would say timeless truths. this is a Robert Kiyosaki book and it is not rich dad, poor dad. As some of you are probably thinking, this one I would actually say is better than that book. Rich Dad Poor Dad gets all the fame and glory in regards to, oh, that book changed my life. however, this book really shifted how I view money, really. It's how I view money, how I view my time with money, which I think is always that, just never ending epiphany thing of wow, what if I did this and oh, I've been doing it wrong. the book is called Cashflow Quadrant. And what I love about this book is it really spells out in a black and white way how money moves. And there's four quadrants. We'll get into that soon. we're going to dive into that book today. so if you're someone who is feeling like you're lit in a little bit of a rat race, and I'm not trying to say, Hey, change this one thing and your life will all of a sudden align. But one of my goals through these episodes is I wanna be able to supplement, to free up, to give hope, to give, a release valve to my dad out there who is, just grinding away. the grind isn't all bad. sometimes, I get big highs when I get a victory in my job and I try to look for, I try to find those victories. Even if I feel like I had a bad day, I try to find what was it that happened today that I can get excited about. but I know I get the most excited when I'm freed up, stress, stress free with the fam. Feeling good about my future, trusting in the Lord for, everything, my daily bread. and just doing what I would say is being a good steward of the resources that God's giving me. So in that way, I do feel like working till, seven, eight o'clock every day, or not being able to turn it off, that's a problem. And we deal with those issues in different ways. and of course my opinion may be different than yours, but my goal in reaching the audience that I want to reach is, Hey, I know you want to be with your family more, or you want to be able to turn off the work. and you want to be fully present when you show up with your wife and with your kids. you want to be able to give to your community, to your neighbors and just, your church. Like you want to have some margin in your life. And, as your, If you're succeeding and working hard in your job, let's find some ways that we can make better use of our time, and invest wisely so that the returns that we get from our financial position will allow, for more options for you presently with your kids as well as down the road in the future. All right. the book starts with the idea of, feeling trapped. have you ever felt trapped in the daily grind and you're trading your time for money with no end in sight? I have definitely felt this way. And in my thirties, early thirties, I was determined to find another way. What if I told you that this other way, involved stepping out of the endless cycle of work into financial freedom? Sounds great. today we're going to be diving into Robert Kiyosaki's Cashflow Quadrant. And I'm gonna be telling you how you can shift from being an employee or self employed to becoming a business owner or investor. Those are the four quadrants there. my story, it begins with, feeling like I needed to provide for my family, and had no concept of what that meant. Time wise, it meant I need to make this amount of money. don't care what it takes to get there. I have all the energy in the world and I'm highly motivated. And, once I can hit this number, I'm good. I'm gold. And sadly, when my marriage started, drifting and I would say eroding and I realized I wasn't really knowing my son, who was three at the time, as, as well as I wanted to, I felt like this was just normal to be gone a lot. something had to change I would say I wasn't really focusing on my health. went to church when I could, evenings, I can remember actually working all day, getting home at. Let's just say six o'clock and then once dinner was over opening up my computer and just getting back to work and that was fun in my mind because I'm getting so much done, but I'm looking back and just nodding my head saying, Oh man, what was I thinking? a lot of time and energy put into something that unfortunately wasn't giving me the returns I wanted. if you're listening and you're hopefully not feeling that way presently, but maybe you have stepped into that role or maybe there's seasons of your job or your life that you're in that as well. And let me tell you this folks, I feel very much in that role. Um, maybe more so recently as I'm building this business of, syndications with different partners and in capital raising, my background is very heavily in the real estate world, doing single family home rentals and fixing flips and, and I find myself as that employee and being drawn occasionally toward, man, I could just fix these. These yard problems on this house, or replace these light fixtures, or, clean this thing and save some money. so that is the that's the topic today is, am I wrong in thinking that way? Are you wrong? And say, man, I could save money by just doing this myself. and how often are you doing things? and this is one of those things too, where if you're managing your schedule. You don't just look at one hour, you've got to look at basically all 24 hours of the day and that's seven days a week and maybe even go into like, 12 weeks of the first quarter and start seeing like, where's my time going? I have a friend right now who is, contractor painter. And him and I have been in the same journey, I've probably been a little bit in front of him just in regards to starting, investing into homes, but he's been around homes, I would say most of his, career as the contractor and I inspired him and encouraged him to, take that leap to be more of the investor and to, let your money work hard for you or, find money to borrow and let that money work for you and make sure, obviously you're, paying people back and making your payments on time and all that good stuff. he experienced his first eviction this week and, he's kept telling me stories about it. And I've been through an eviction and boy, it is one of the worst experiences you can have. I tell you this story because. You can fall into some traps along the way of being an investor. The traps are, Hey, if I buy this rental or if I invest in this thing, I don't have to worry anymore. It's all taken care of. I hired a property manager. I, I don't, I partnered with this guy and he has a flawless record. And there's just, there's no perfect investment out there. there's a lot that have very low risks for many reasons, but buying a rental and managing that, you're opening yourself up to some pitfalls of some time sucks, some energy sucks. And, um. and that's not the end of the world. I'm not saying my friend here is doing everything wrong, but I think he's realizing, man, there's some things I just, I wanna avoid. I don't wanna put myself in this position again. one of the reasons why I got into capital raising is I bought a lot of homes at once. I bought 10 houses in 2023, and I thought I was doing everything right because I was, investing and buying these things and letting my money work for me. but very soon I realized that the project management side of flipping homes and, converting these, projects into rentals was no easy task. And even now, two years later, managing these crews to get things done is a struggle for me. And I don't know if I'll ever, feel like I've got everything done right. Where I am, letting my money work for me and I'm financially free and someone else is doing all this stuff for me. No, as the owner, you're in the trenches. you're liable for anything that goes wrong and you can build a team around you. And that's really what I'm understanding more in experience now. But, man, it's been so nice to be able to join teams that are already up and running. and then just learn from them and promote them and figure out how to make their business grow even bigger, to bring investors into, these other very well executing teams right now and operating teams. All right. the four quadrants, I want to explain them and, and just make sure for those that maybe you have heard this book or, I've not heard of this book. There's just some base work that's laid here. So the four quadrants are E and S. Those are on the left side. And then on the right, there's a B and an I. the E stands for employee, and this is on the left side. And the employee exchanges time for money. And there's limited control over income. So I would say that it's a majority, that's a majority of this world today, is the employee quadrant. the next quadrant is the S and that stands for self employed. So there's more control here. you own your own business, but you're still trading time for money. So when I started flipping homes, that was not me. I would say becoming a, I investor that was me or even being a business owner. which is the other one I was, my own boss, but I was still. the other two quadrants that I talked about, those on the right side, B for business owner. this is leveraging systems and teams to create income. And the example that was used in the book was if you as a business owner can leave your company for six months and when you get back, your business is doing better. Then when you were there Then you have reached that B. I think they even said But this isn't just like a you and two guys deal. This is a more robust B business and Then the last one is I, investors. investors make money work for them through assets and you hear this and I want to encourage you, if you're an employee or a self employed person, you don't have to stay there. You can learn new skills, invest strategically and make the shift. So my call to action is think about where you are in the quadrant today and what's one small step you can take toward becoming a business owner or investor. don't be discouraged if you're like, man, I've been an E my whole life. And Kenny's trying to tell me, I've been doing it wrong because I think the truth is that there's a lot of benefits in being an employee or a self employed person. some of us love our jobs. is it possible? Yes. There's things that I think we want to all have that freedom in. And that's where I can come in and help if you're someone who feels like, man, I'm just looking for some more freedom. I have limited control over my day to day. and I would think that's because, and I am just tied to the income of this property. If I don't have this job, if I'm not performing, I'm not there, 6 AM, leading these meetings or, I'm on call, there's a Saturday, someone came in, one of our clients needs help and I have to be available for them. that's where I feel like, let's see how we can make a step out of that. when you really feel like the values that you have are not lining up with your company's values or your just decisions in your role right now. and you feel like, man, if this job goes away, like our income is in jeopardy. real estate investing allows a supplement to that. this is not an episode to say, quit your jobs and become an active real estate investor. this is really meant to say, understand how money is working through you. Do you only get paid when you clock in and clock out? or there are things that are making money for you while you're not doing anything, I think one of the best feelings that I've experienced recently. And I'm someone that really, I get like tired spending money. if I ever go shopping, which is one of my least favorite activities, just, buying the three things or doing research to find the right TV or whatever it is. It is just, it drains me. However, when I am spending money on an employee that I was working with me or, buying a flip home. And getting that funded, that is one of the like best feelings ever of just, Hey, I've just spent money on something that's going to be making money. So like investing in these assets, buying assets, things that make money for you, investing in people when you're, I don't know if it's called, I don't know if it's called envy or not, but when I talk to people who have a team, we had Zach Springer on the episode and he told me about. He's got, five team members and he's teaching them how to sell. I get man, that is, that's so exciting. Like you're impacting people and equipping them and seeing, and hey, it comes with downsides. There's maybe drama, there's there, there are problems, everyone has their own motivation tick, but, man, it's so exciting to be able to build a team, all with, a goal in mind and to hit that goal. as you are, going through your time, blocking, time management, figuring out, where am I at? Am I balanced in all my different, hats and the health and the spiritual and, financial and my marriage and my kids? I would encourage you to analyze. Am I spending a lot of my time in the E? Or S categories, or am I taking steps to be more of an eye or a B as a business owner or investor and, and what those benefits would be for you. I'm going to end with just a little personal story. I have been really getting worn down, last couple of weeks, my, my health hasn't been great with just some sicknesses and. it's just lingered for a while while I'm finally back. I feel like I'm, I've been in the gym, I feel like I'm making, better use of my time, just more, more engaged with like tasks. however, I get, I have been getting worn down a lot. My wife and I both, with our daughter, she's just been, she's been hard. She's got a lot of energy. She is almost four now. And if you're in this stage, you know exactly where I'm coming from and you're probably, for those that are out of this stage, I'm sure you're smiling like, Oh yeah, I remember that. But, I had something really exciting happen today. We've just been really pouring into her, my wife and I, trying to be patient. she's just bouncing off the walls, screaming, she's, she's zero to a hundred with, no throttle. It's just really, it's, and then, and it's something that I'm thankful for to a degree. She is, my son has not been like that. So she's a new person to us in this way. But tonight, I'm laying down with her. We're trying to get her to sleep, going through the bedtime routine. And I was just praying for her and trying to be as Understanding as I can with, what she's thinking about, and she's got all these little questions about Anastasia, and princesses, and Star Fox, just like random stuff. And, I feel like I answer all her questions the best I can, and then we're laying there and she says, Hey dad, can I tell you something? And I was like, yeah. And she sits up a little bit, and I look up at her and she goes, I just want to let you know I love you. And I was like, oh boy, that's special. So I was very encouraged tonight. So hey, for my dad's out there, whether you're a girl, dad or a boy, dad, find those moments and hold onto them, hold onto them tight. We got an interview coming up next week with a guy named Vaughn Bethel and he is local to me in South Carolina. He's someone that I've. known from a distance in regards to, his line of work, he, has a company called REI Junkies, wholesaler, gets a lot of deals and, tries to, to sell them to people like me to have them flipped, or he holds onto himself. So I'm excited to see, what he's up to now and hear how he's, utilizing his gifts and strengths to, be successful at home and in the business. So guys, thanks for joining me today on the invested fathers. find me on LinkedIn. I'm very involved on LinkedIn right now. If there's anything I can do for you, please reach out and invest wisely.