In Lesson 4 of Rich Dad Poor Dad, Robert Kiyosaki highlights a financial reality most people never learn: the rich don’t avoid taxes — they manage them legally and strategically through corporations.
“The rich use corporations to reduce taxes and protect their assets.”
Kiyosaki explains how taxes historically began as a way to punish the rich but eventually became a burden on the middle class. The wealthy, however, adapted by using corporate entities to shield income, control expenses, and reinvest profits before taxes are applied.
Why it matters:
Employees are taxed before they see their earnings. Corporations earn, spend, and are taxed on what’s left. This simple but powerful structure allows the rich to protect and grow wealth at a much faster rate than salaried workers.
Example:
An employee earns $100,000, gets taxed, and lives on the remainder. A business owner or investor earns $100,000 through a company, deducts business expenses, and pays tax only on the net.
Action Points for Professionals:
- Start by understanding basic tax structures for businesses and investments.
- Learn about legal tax deductions, corporate protections, and asset management.
- Don’t rely solely on employment income — explore ways to control your financial destiny.
It’s not about cheating the system — it’s about understanding it better than most people do.
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