Which of the 3 Cash Flow Patterns Are You?

A common question people ask is, “Where did all my money go?” Sometimes it’s a joke, but often it’s a serious question. The reason people ask this question is because they do not fundamentally understand how cash flow works. They do not really control their money. Rather, it controls them.

Today, many people are in financial trouble because they have too much cash flowing out of their pockets and very little money flowing into their pockets. If you’re going to be financially secure, however, you need to learn to have more cash flow into your pockets. That’s one thing my brand-new service can definitely help you with. Every week, I’ll show you how you can add new streams of cash flowing into your pockets. Using our strategy, I’ve seen people getting weekly cash flow of as much as $10,600. And right now, for the next 24 hours only, I’m opening up more spots for new members of our team. Click here to take a look.

In my book, Rich Dad Poor Dad, I talk about three cash flow patterns: one for the poor, one for the middle class, and one for the rich. Understanding these cash flow patterns and why they are different will help you to answer the question of where your money goes.

Cash Flow Pattern of The Poor

You’ll often hear those who struggle mightily when it comes to finances say, “I’m living paycheck to paycheck.”

The unfortunate reality for those who are poor is that they make hardly enough to pay their monthly expenses. They are hard workers, often doing two jobs just to make ends meet, but they have a hard time getting ahead because they are simply treading water.

The cash flow pattern of the poor looks like this:


Cash Flow Pattern of The Middle Class

The middle class also often live paycheck to paycheck, but for different reasons and in a different way.

Here’s the cash flow pattern of the middle class:


This cash flow pattern is considered typical and smart by our society. After all, the people who have this pattern probably have high-paying jobs, nice homes, cars, and credit cards. This is what my rich dad called the “working-class dream.”

After putting aside some money into a 401(k), the middle-class cash flow pattern involves using spare money for all sorts of toys and liabilities that don’t put money in your pocket but instead take money out. It is the Rat Race.

Over time, you build a lifestyle that must be maintained by either getting a higher paid job or working longer hours. And if you get fired or laid off, everything comes crashing down.

Often, when people play my CASHFLOW®board game, they see this for the first time. As they struggle through the game because they are learning financial literacy for the first time, they begin to realize that they are in financial trouble, even though they look wealthy from an outsider’s perspective. After playing the game, some people begin to change their thinking patterns about money to that of the rich.

Cash Flow Pattern of The Rich

This is the cash flow pattern of the rich:


This is the thought pattern rich dad wanted his son and me to have as young children. He never wanted us to become addicted to the idea of a high-paying job. He wanted us to develop the thought pattern of thinking only in assets and income in the form of capital gains, dividends, rental income, and residual income from businesses and royalties.

Work Smart, Not Hard

If you want to be successful, the faster you develop your financial and emotional intelligence, the faster you will feel more financially secure and be independent, financially. In a world with less and less job security, this cash flow pattern makes much more sense to me. And I can show you how to set up these types of cash flow patterns if you watch this video. But just know, to achieve this pattern, you need to see the world from the perspective of a business owner and investor, not an employee or self-employed person.

One of the most important things my rich dad taught me to do was to control my personal cash flow and to monitor the world’s cash flow. He taught me to monitor global cash flow by observing three things:

Jobs: For years jobs have flowed overseas from the US. Many jobs that used to pay a lot, no longer exist in America.

People: The flow of jobs out of the US has led many to find new careers. This often means moving to a new city or even country where certain industries are thriving. I like to invest in markets where people are moving to, not from.

Cash: During the great recession, we saw cash flow out of the stock market and into savings, mattresses, bonds, and gold—in other words, safe havens. Today, money is flowing back into the stock market, but for how long? In order to be rich, you must be on top of where the cash is flowing and move accordingly, before others get there.

My partners and I create cash flow for ourselves by watching the global movement of cash. For instance, we invest using debt to purchase apartment buildings in areas where there are good jobs, areas where people are flowing, and money is moving to. In simple terms, real estate is not worth much if there are no jobs. Jobs attract people. And where people are moving, cash is flowing. It’s simple, but most people are not trained to look for these things. As a result, their cash flow suffers.

Where Are You?

A quick glance at your financial statement—total income, total expenses, total assets, and total liabilities—will give you a general idea of where you are financially. As you look at these totals, review the cash flow patterns above and see where you stand.

Generally speaking, if the money you have coming in as income goes right out as expenses, you’ve got the cash flow pattern of the poor. If your income is used to pay expenses and liabilities, then the cash flow pattern of the middle class best describes you. You’re bringing in money through ordinary earned income, which pays expenses and buys more liabilities, which you mistake for assets. In either case, poor or middle class, you need to read on and get your financial house in order.

Where Are You Going?

Where do you want to be financially? Pick a point and go! If it’s a business, start building it. If it’s an investment, start learning everything you can and building your financial foundation to jump at opportunities as they come.

The reality is that we’ll all get tossed back and forth on our financial journey. But if we keep moving forward, even if we lose our balance here and there, we’ll make it to our destination.

So, today, get moving and keep moving.


Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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