A large part of Kiyosaki's teachings focus on generating passive income by means of investment opportunities, such as real estate and businesses, with the ultimate goal of being able to support oneself by such investments alone. In tandem with this, Kiyosaki defines "assets" as things that generate cash inflow, such as rental properties or businesses—and "liabilities" as things that generate cash outflow, such as houses, cars, and so on. Such definitions are somewhat based on the concept of negative gearing. Kiyosaki also argues that financial leverage is critically important in becoming rich.
Kiyosaki speaks often of what he calls "The Cashflow Quadrant," a conceptual tool that aims to describe how all the money in the world is earned. Depicted in a diagram, this concept entails four groupings, split with two lines (one vertical and one horizontal). In each of the four groups there is a letter representing a way in which an individual may earn income. 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: (Big) 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.