IQ, EQ, FQ - Financial Quotient

Most of us are familiar with IQ, EQ but not FQ. FQ - Financial Quotient, I first came across this word from Robert Kiyosaki book's "Rich Dad, Poor Dad". Robert Kiyosaki is an investor, businessman, self-help author and motivational speaker. He is best known for his Rich Dad, Poor Dad series of motivational books.

I think this book "Rich Dad, Poor Dad" should be use as a motivational tool and a first step on the path to learning about money, rather than using the book as a practical guide to wealth. It is more of a fictional novel to inspire people to learn more. If you are already well along the path of learning about money, finance, and investing, you will probably get very little from Rich Dad, Poor Dad. But if you rarely think about money and have just enough to pay the bills each week, this book could be the start of your financial freedom.

Kiyosaki discusses what he calls the cashflow quadrant: a conceptual tool that aims to describe how all the money in the world is earned. In each of the four groups there is a letter representing a way in which an individual may earn income. Its consist of the letters "E", "S", "B", and "I". The letters are as follows.

E: Employee — Working for someone else
S: Self-employed or Small business owner — Where a person owns his own job and is his own boss.
B: Business owner — Where a person owns a "system" of making money, rather than a job to make money.
I: Investor — Spending money in order to receive a larger payout in return.

And according to Kiyosaki, in order to obtain financial freedom, one must be either a business owner or an investor, generating passive income. For those "E" and "S", Kiyosaki says that they may never obtain true wealth. Conversely, those "B" and "I" are supposedly following the only road to true wealth.