![]() In some cases, you can also benefit from depreciation, which is an important tax benefit. You may now pay taxes on capital gains, or dividends, in a lower tax bracket. In addition, there are some tax advantages depending on the type of investment you make. Similar to a business owner, an investor is not exchanging time for money. If you went on a vacation for a month, the business would continue to run smoothly. So you now own an asset that generates money for you, and your presence is not required anymore. The point is to be aware of the difference in mentality.īy Kiyosaki’s definition, as a business owner you own a business, but you are no longer needed for the business to run. The point is certainly not to imply that everybody must be in the next two categories. The economy would not function without these two categories in the workforce. Of course, there is nothing wrong with being an employee or self-employed. Whether you are an employee or self-employed, you are an active worker. Still, you are exchanging time, effort and knowledge for money. You receive an automatic tax deduction over several years because your equipment purchase helps stimulate the economy. In some cases, you may be able to take advantage of depreciation on equipment you purchased. For example, you are taxed after expenses are taken off your earnings. One advantage of being self-employed is that there are several tax benefits. ![]() When you’re not there, little to no money is made. You have to be present for the practice to run. You may easily work 60 or 80 hours a week, including nights and weekends. You may make more money than you did as an employee, but the business depends heavily on you. In our world, you may own a veterinary practice, but it typically doesn’t run without you. If you are self-employed, you may call yourself a business owner. As an employee, you exchange time, effort and knowledge for money. The only exception may be a two-week vacation that is paid for by your employer. The problem is, if you don’t work, you don’t earn money. You are in the highest tax bracket allowed, based on your earnings, because the IRS considers that you don’t contribute much to the economy. Taxes are taken out automatically from each paycheck before you ever get the paycheck. They correlate with four primary ways to earn money.Īs an employee, you work for someone else. If this sounds like you, read on for Kiyosaki’s description of the four types of people in the workforce. The result is that people learn to work for money… but never learn to have money work for them.” Kiyosaki says, “The main reason people struggle financially is because they have spent years in school but learned nothing about money. You can keep your boardrooms, private jets and oilfields, thank you.In his classic book “ Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom,” investor, entrepreneur and best-selling author Robert T. For me, I just want to be financially free to live a simple life. It might suit ambitious, ruthless, executive types whose only ambition in life is to earn a lot of money for money's sake without a care as to who or what it hurts, or the environmental consequences. Most of the assumptions about income, tax, benefits, political situation. I'm going to stop now, it's wasting my time - I've work to do! Part of the problem I have with the book is that it's primarily geared towards Americans. The author thinks that to be self-employed is worthless and somewhat pathetic, unless you have a business employing at least 500 people. It might or might not be possible to reach such 'heights'. I have never aspired to that level of wheeler-dealing, and I would rather die than be that kind of person. But after listening to this book I realise I honestly, truly do not want to be 'rich', in the sense the author means. Yes, I would like to be more financially secure. The world described in this book - a world the author believes everyone should aspire to - is not a world I wish to live in.
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