Robert Kiyosaki : people go broke because They work for earned income

Robert Kiyosaki : “I want to educate more people. This really is a jobless recovery---that’s why one of the things about the information age is there is a lot of work to be done but fewer jobs. It’s like when you go to a ghetto, there’s a lot of work but no jobs. People have jobs, but they are substandard and they are not paying enough money; so we have to do something to change their perspective and the world is not doing a good job telling people to work hard and save money in your 401k – that’s why they are going broke. They work for earned income; they are over taxed, they invest in earned income and they save money, while the Federal Reserve is printing it like crazy. The reason I came out with my Cash Flow Game is so you could learn, and then teach five other people. Then, you can teach your kids. You've got to play the game about four or five times and your mind will change. You will see a whole new world.”

Robert Kiyosaki : earned income is the most highly-taxed income

Robert Kiyosaki : .... which is the worst type of income? When you say to a child go to school and get a job, have a 401K, that's earned income. The problem with earned income, it's the most highly-taxed income there is. Then there's portfolio income, and portfolio income is oftentimes called capital gains income. So I buy a stock at 5 and it goes to 10 and I sell it, then I have portfolio income, and I pay approximately 15% on that. But if I have passive income--passive income is generally from things like patents or in my case intellectual property from books and from real estate, passive income, if you know what you're doing, you can pay zero taxes. So earned income is taxed at approximately 40%, portfolio income is taxed at 15%, but passive income is taxed at 0%, if you're smart. So that's what I say to people. I'm not into tax evasion, but I want to do my best to work, earn as much money as possible, and pay the least taxes possible legally. But if you say to a child, go to school, get a job, and get a 401K, they're basically a tax mule for the federal government."



Alot of people still stuck on the old ways of thinking and ignore the cashflow quadrant. Truth is...the days of going to school and getting that good job are over. Trust me, you can always be replaced and your boss will kick you to the curb if it saves his business money no matter how educated you are. Robert knows what he is talking about and he does rock.