![]() ![]() I can’t be the only person who thought, “No way! That’s total bullsh*t.” The dichotomy and conversations Robert supposedly has with his Poor Dad and Rich Dad throughout the novel seem a little far fetched.Ĭall me a little bit skeptical that his dad told him, “Go to school, get a job, work for someone with good benefits, and getting rich is impossible”. Reading the book as a 22-year-old college graduate offered a whole new lens. The first time I read Rich Dad Poor Dad I thought it was 100% true, but I was a naive 14-year-old. I minimize my tax bill by investing in tax-advantaged retirement accounts (401k and IRA) and deferring taxation on capital gains. ![]() As the old saying goes, it’s not what you earn but what you keep. #Robert kiyosaki cashflow game code#This could all change under a new tax code, but it’s how the code is currently written. So, if he doesn’t sell any shares, he doesn’t have any income for the IRS to tax. Warren Buffett pays a lower tax rate than his secretary because virtually his entire net worth is wrapped in Berkshire Hathaway stock. Wait, why do employees pay more in taxes than business owners? It all comes down to the marginal tax rate discrepancies between earned income and dividend income/capital gains. Kiyosaki urges his followers to alter their mindset and work towards becoming business owners and investors (rather than employees or self-employed), so they can minimize tax expenses. Nevertheless, here’s the quick and dirty explanation of tax rates for various groups. #Robert kiyosaki cashflow game how to#In my article “ How to Never Pay Taxes Again“, I provide a further break down between the four quadrants. ![]() It’s actually fairly decent advice for tax novices, and it’s the reason billionaires don’t pay taxes. The four quadrant picture is embedded in personal finance greatness! It’s a rough sketch of tax planning advice to minimize your total tax liability. The book was written in the 1990’s, and I think he actually wanted to help his readers achieve financial freedom. He notes he merely wrote the book to promote his (bluntly put) boring board game, Cashflow. I don’t think Robert Kiyosaki ever expected his book to become the best selling personal finance novel of all-time! I mean c’mon, it has sold over 20 million copies. I saved as much as possible, acquired dividend paying index funds that were always reinvested, and have been on a journey to financial independence ever since. Thus, I could ultimately use my actively earned income (salary at work) to buy assets that earned passive income, so I could make money while I sleep. It fundamentally altered my mindset regarding assets and passive income. I read this book during my freshman year of high school and again during my senior year of college. Contrarily, Kiyosaki says the middle class is doomed because they accumulate liabilities instead. Notice how all these assets produce cash flow (dividends, interest payments, or rent). These are some of the assets mentioned in the book. ![]() If your stuck in determining whether something is an asset or liability, check which way the cash is flowing. Kiyosaki notes that “assets put money into your pocket” and “liabilities take money from your pocket”. It’s a wonderful introduction to “accounting for dummies” and distinguishes between assets and liabilities. I think everyone (no matter their interest in personal finance) should read this book. Rich Dad Poor Dad is on the list of my 5 must-read personal finance books. ![]()
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