Rich Dad Poor Dad Lesson 4

Lesson Four: The History of and The Power of Corporation

  1. The real reality is that the rich are not taxed. It’s the middle class who pays for the poor, especially the educated upper-income middle class.
  2. He explained that the idea of taxes was made popular, and accepted by the majority, by telling the poor and the middle class that taxes were created only to punish the rich. This is how the masses voted for the law, and it became constitutionally legal. Although it was intended to punish the rich, in reality it wound up punishing the very people who voted for it, the poor and middle class.
  3. within my organization, the fewer people I hire and the less money I spend, the more I am respected by my investors.
  4. If you work for money, you give the power up to your employer. If your money works for you, you keep and control the power.
  5. Paid so much for smart tax accountants and attorneys. It was less expensive to pay them than pay the government
  6. Focusing on my own business, developing assets, made me a better employee. I now had a purpose.
  7. Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche with before-tax dollars.

  1. No. 1 is assets. 
  2. No. 2 is investing. What I call the science of money making money. This involves strategies and formulas. This is the right brain side, or the creative side.
  3. No. 3 is understanding markets. The science of supply and demand. There is a need to know the “technical” aspects of the market, which is emotion driven; the Tickle Me Elmo doll during Christmas 1996 is a case of a technical or emotion-driven market.
  4. No. 4 is the law. For instance, utilizing a corporation wrapped around the technical skills of accounting, investing and markets can aid explosive growth.

An individual with the knowledge of the tax advantages and protection provided by                  a corporation can get rich so much faster than someone who is an employee or a                      small-business sole proprietor. It’s like the difference between someone walking                    and someone flying. The difference is profound when it comes to longterm wealth.

1. Tax advantages: A corporation can do so many things that an individual cannot. Like pay for expenses before it pays taxes. That is a whole area of expertise that is so exciting, but not necessary to get into unless you have sizable assets or a business.

2. Protection from lawsuits. We live in a litigious society. Everybody wants a piece of your action. The rich hide much of their wealth using vehicles such as corporations and trusts to protect their assets from creditors. When someone sues a wealthy individual they are often met with layers of legal protection, and often find that the wealthy person actually owns nothing. They control everything, but own nothing. The poor and middle class try to own everything and lose it to the government or to fellow citizens who like to sue the rich. They learned it from the Robin Hood story. Take from the rich, give to the poor. It is not the purpose of this book to go into the specifics of owning a corporation.

The Rich People With Corporations

  • . Earn
  •   Earn
  •   Spend

The People Who Work for Corporations

  •  Pay Taxes
  • Pay Taxes
  •  Spend



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