Real Estate: The Secret Weapon of the Rich
It’s a fact of life that you will have to pay your taxes each year, and it’s equally inevitable that you’ll hear people complain about them. Those who are tired of grumbling about having to pay their own taxes will often grouse about how much money the rich manage to avoid paying. No matter how one looks at it, it seems unfair– those with less bear the greater part of the burden while the wealthy have lawyers working around the clock finding new ways for them to avoid paying their share. With this state of affairs, it’s no wonder that the lower and middle classes resent the rich.
Unfortunately, simply recognizing injustices and complaining about them isn’t sufficient to change the ways of the world. The rich will inevitably have money and therefore power, and they will use this power to stack the deck in their favor, particularly when it comes to using tax breaks to keep their money. They will claim that there simply isn’t enough money for everyone to get what they need, all the while cutting corners and keeping their spoils for themselves. This extends to elected officials as well– how many poor politicians have you heard of?
Because this is the way our society works, you can either sit and feel sorry for yourself or you can take steps better your situation. The truth of the matter is that, if you know the secrets of the rich, you can get these same tax benefits that the rich enjoy.
In his Rich Dad book series, Robert Kiyosaki advocates figuring out what the rich do to be rich, and do that. Except that you don’t have to figure it out. He didn’t even have to figure it out, because he had a rich “dad” to tell him the secret of the rich: investing. Especially in real estate.
“One of the reasons I chose to work predominantly in the B and I quadrants are the tax advantages,” he says in his book, “Cash Flow Quadrant.” The cash flow quadrant, after which he named the book, is his rich dad’s diagram of the four different kinds of people, with respect to where they get their money and their philosophy about procuring money which, oddly enough, match up. In other words, people who are Employees have one set of values while the people who are Self-employed have another.
In Robert Kiyosaki’s opinion, the most money is in the business and investment quadrants, largely because these quadrants allow individuals to take advantage of more tax breaks.
As they say, if you can’t beat ‘em, you’ve got to join ‘em. This is doubly true when you’re talking about the wealthy. With this mindset, you’ll realize that tax breaks for the rich aren’t really so bad, since you can take advantage of them when you become rich.
The path to riches is actually very simple; all you’ve got to do is start investing, or join the ‘I’ quadrant. If you have a high-paying job, you may be able to do this without leaving the ‘E’ (employee) or ‘S’ (self-employed) quadrants, but Robert Kiyosaki advises that you move into the ‘B’ or business quadrant, devising a system that will make you money regardless of whether you are putting time into it or not.
Investing, preferably in real estate– condos, rental property, land and the like– is your ticket to financial freedom.