Rich Dad's Robert Kiyosaki: Sacred Cow of Money (2) - Get A Job
Summary
TLDRThe speaker challenges the conventional wisdom of seeking job security through education and employment, highlighting the tax implications for different income groups. They contrast the perspectives of 'poor dad' who advocated for traditional employment with 'rich dad's' encouragement to become a business owner or investor. The speaker emphasizes the higher tax burden on self-employed professionals like doctors and lawyers, while business owners and investors often pay less. They argue that job security is a myth in the current global job market and advocate for financial education to understand alternatives to traditional employment, such as entrepreneurship, which can lead to creating jobs and financial independence.
Takeaways
- 💼 The speaker challenges the conventional wisdom of seeking job security by suggesting that being a business owner or investor can lead to paying less in taxes.
- 💰 Employees and self-employed individuals, such as doctors and lawyers, are noted to pay the highest taxes, including income, Social Security, and Medicare taxes.
- 🏢 The script introduces the ESBI cash flow quadrant model, where E stands for Employee, S for Self-employed, B for Business owner, and I for Investor, each with different tax implications.
- 📚 The speaker's 'poor dad' advocated for traditional education and employment, while the 'rich dad' encouraged entrepreneurship and investment for wealth creation.
- 🌐 There's a critique of the notion that higher education directly leads to higher tax payments, especially for professionals like doctors and lawyers.
- 🔄 The script suggests that tax laws are designed to reward those who create jobs and stimulate the economy, such as entrepreneurs and real estate developers.
- 🌱 The idea of a 'safe and secure job' is questioned, with the speaker arguing that job security is a myth in the current global economic landscape.
- 🌐 The speaker reflects on the changing nature of work, noting increased competition for jobs from international markets like India and Asia.
- 🎓 The script points out that schools typically do not educate students about entrepreneurship as a career path, focusing instead on traditional employment.
- 🚀 Entrepreneurship is presented as a means to create jobs and contribute to economic growth, in contrast to relying solely on government for job creation.
- 💡 The speaker shares a personal anecdote about starting a business and the shift in perspective from being an employee to having multiple clients, reducing risk.
Q & A
Who typically pays the most taxes according to the speaker?
-The speaker suggests that employees, particularly those who are self-employed or specialists like doctors and lawyers, pay the most taxes.
What does the acronym ESBI stand for in the context of the cash flow quadrant?
-ESBI stands for Employee, Self-employed, Business owner, and Investor, representing different categories of individuals based on their relationship to income and work.
Why does the speaker argue that being a business owner or an investor can lead to paying less taxes?
-The speaker argues that business owners and investors often pay less taxes because the tax laws are structured to reward those who create jobs and contribute to economic growth.
What is the speaker's perspective on the traditional advice to 'go to school and get a job'?
-The speaker challenges the traditional advice by suggesting that it often leads individuals to become employees or specialists, who tend to pay the highest taxes and have fewer options for reducing them.
Why does the speaker consider self-employment in the 'S' quadrant to be a high tax burden?
-Self-employed individuals in the 'S' quadrant not only pay high income taxes but also have to pay Social Security and Medicare taxes on all their earnings, leading to a higher overall tax burden.
What is the speaker's view on the security of traditional jobs?
-The speaker views traditional jobs as insecure, citing the myth of job security and the reality of job losses, including competition from global markets.
How does the speaker's experience of starting a business influence his perspective on job security?
-The speaker's experience of starting a business after being fired from a job led him to recognize the lack of control over one's life when relying on a single employer, thus valuing the control and reduced risk that comes with being a business owner.
What does the speaker imply about the role of entrepreneurs in job creation?
-The speaker implies that entrepreneurs play a crucial role in job creation, suggesting that the government does not create jobs but rather needs more entrepreneurs to stimulate the economy.
Why does the speaker believe that financial education is important for understanding career options?
-The speaker believes financial education is important because it opens up the understanding that there are options beyond traditional employment, such as entrepreneurship, which can offer different financial and career paths.
What is the speaker's opinion on the risk associated with being an employee?
-The speaker considers being an employee to be a high-risk profession because it involves relying on a single client (employer) for income, whereas being a business owner or investor can distribute risk across multiple clients or investments.
How does the speaker differentiate between the financial security of employees and entrepreneurs?
-The speaker differentiates by stating that employees are punished for mistakes and can lose their jobs, while entrepreneurs and investors can learn from mistakes and become richer, suggesting that financial security is more important than job security.
Outlines
💼 The Tax Burden and Job Security Myth
The speaker discusses the misconception that getting a job is the best way to financial stability. They highlight the tax burden, explaining that employees and self-employed individuals, particularly professionals like doctors and lawyers, pay the highest taxes. The speaker contrasts the advice from their 'poor dad' who advocated for traditional employment with the advice from their 'rich dad' who encouraged entrepreneurship. The narrative emphasizes the idea that being a business owner or investor, rather than an employee or self-employed professional, can lead to paying less in taxes and having more financial options. The speaker also critiques the notion of job security, pointing out that relying on a single job is risky and that the job market is becoming increasingly competitive with globalization. They advocate for financial education and the importance of understanding the tax system to make informed decisions about one's financial future.
🚀 Entrepreneurship Over Employment
In this paragraph, the speaker emphasizes the benefits of entrepreneurship over traditional employment. They argue that having a job is the riskiest profession because it relies on a single client, the employer. The speaker shares their personal experience of starting a business after being fired, which led to a realization of the lack of control over one's life when dependent on a single employer. They contrast this with the situation of business owners who have multiple clients, reducing risk and increasing financial security. The speaker also touches on the idea that entrepreneurs can learn from their mistakes and become richer, unlike employees who may be punished for errors or lose their jobs. The paragraph concludes with the assertion that financial security is more valuable than job security, and that the traditional path of education and employment does not always lead to the desired outcomes of stability and wealth.
Mindmap
Keywords
💡Taxes
💡Employee
💡Self-employed
💡Entrepreneur
💡Investor
💡Cash Flow Quadrant
💡Job Security
💡Financial Education
💡Risk
💡Tax Laws
💡Financial Security
Highlights
The speaker challenges the conventional wisdom of getting a job as the primary means of financial stability.
A comparison is made between the tax burdens of business owners and employees, with a focus on who contributes more to taxes.
The speaker's personal journey from being an employee to a self-employed CPA firm owner and the tax implications of each.
Introduction of the ESBI cash flow quadrant model, explaining the different tax burdens and financial strategies of Employees, Self-employed, Business owners, and Investors.
The speaker's 'poor dad' advised him to become an employee or a specialist, while the 'rich dad' encouraged business ownership or investing.
Specialists like doctors and lawyers are highlighted as paying the highest taxes due to both income and self-employment taxes.
The myth of job security is debunked with references to job losses and global competition.
The idea that getting a job is the only option presented by the education system is critiqued.
The speaker shares his experience of starting a business and the perception of risk compared to being an employee.
The importance of financial education in understanding alternative paths to employment is emphasized.
The concept of job security as an outdated industrial age idea is presented.
The speaker discusses the risks of being an employee with only one client (the employer).
Entrepreneurs are positioned as job creators, contrasting with the government's limited role in job creation.
The speaker argues that being an entrepreneur offers more control and a way to mitigate risk.
The value of learning from mistakes in business is contrasted with the punishment for mistakes in traditional employment.
The conclusion that financial security is more important than job security for entrepreneurs is stated.
Transcripts
[Applause]
and the next sacred cow is get a job or
go to school and get a job now the
problem with getting a job is who do you
think pays the most taxes the owner of
the business or the worker to that I'll
turn to my accountant here Tom well it's
it's clearly the the employee who's
paying the most taxes and you know I I
started as an employee right out of
school and I was paying high taxes even
though my my job is to taxes I was
paying high taxes and then I started I
know ironic isn't it and then and then
about 15 years ago I started my own uh
business I was started my own CPA firm
and I was now self-employed and I was
even paying more taxes so it wasn't
until I started acting like a bigger
business and was really a a significant
Siz business that I started paying less
taxes and it's because it's the business
owners and it's the ENT it's
entrepreneurs and it's the investors the
active investors that really pay the
least amount of taxes time out during
this program you'll hear a lot about
esbn also known as a cash flow quadrant
e stands for employee employees have a
job s stands for a self-employed small
business or specialist like a doctor or
lawyer these people own a job b stands
for big business 500 employees or more
and these people have other people
working for them and I stands for an
investor and investors have their money
work for them now my poor dad always
said to me go to school and get a job
and he wanted to me become an employee
or a specialist like a doctor or lawyer
my rich dad said if you want to be rich
you have to be on the business owner or
the eyesight and that's the difference
with my rich dad and my poor Dad if you
look at the uh cash flow quadrant you
have the esbn the people that go to
school on the and the S site the S
stands with specialist like a doctor or
lawyer an e are employees but doctors
and lawyers pay the highest taxes right
oh by far it's it's those people that
are self-employed because not only are
they paying the highest income taxes
they also get the privilege of paying
Social Security taxes and Medicare taxes
on everything they earn so they're
paying extra taxes just to be in that s
quadrant right so when you go to school
and there academic and professional go
to school and my mother wanted me be a
doctor if I had followed in that
footsteps I'd be paying the highest tax
possible and they make the they make a
lot of money but they pay the highest
percentage in taxes so that's why this
relates back to go to school that's
right and they actually have the fewest
options of reducing their taxes that the
tax laws are really geared towards those
people who are creating jobs you know
and those are the entrepreneurs those
people who are uh creating housing and
you know building real estate because
that's the government understands that's
what we need you know we want the
private sector to do that and so we're
rewarded for doing what the government
wants us to do and that's really all the
tax law is it's a it's a system of
rewards for people doing what the
government wants you to do plus you know
the other part of it too is this whole
idea of getting a job there was some
kind of a myth out there that goes with
get the job get a safe secure job and so
that by getting a job somehow you're
going to be taken care of for the rest
of your life and all you got to do is
pick up any paper to see how many tens
of thousands of people are losing their
jobs there are no safe secure jobs and
now we're competing with India and Asia
for jobs that were sacred to to America
at one point in time so this whole idea
of having a job is that was Secure is
probably most insecure thing you could
be doing right now the idea of a secure
job is an industrial age idea exactly
the only option is put into your head is
go get a job and I wasn't around yeah I
wasn't around entrepreneurs I wasn't
around business owners growing up I was
around employees when I um first started
my company 15 years ago I I went back to
my class reunion which is always an
interesting thing and I remember saying
to them yeah you know I I started a
company about 5 years ago and they
looked at me like oh and and some of
them even said it they go you're so
brave and I'm thinking you know I've had
this company for 5 years now that the
longest I had ever worked anywhere see
without Financial education you have to
get a job what's tragic today was so
many people losing their jobs they go
back to school to get another job but
they're now competing with their kids
kids you know that's Insanity so we're
not saying jobs are bad we're just
saying as entrepreneurs our job is to
create jobs the government doesn't
really create jobs they need more
entrepreneurs I didn't even know there
was another option growing up I didn't
know there was another option I didn't
know I thought all you could do was get
a job so again it's not right or wrong
to be an employee but I'd like to know
what my what my options are right
because were you when you were in school
do they say uh go to school get your
diploma so you become an entrepreneur no
I mean you'll never hear that the school
system um no they said work your way up
the ladder get the bigger paycheck get a
better jober job but you're right job is
the only option that you'll hear in
school as a rule and job stands for just
over broke you know to me the real issue
with the job is it's the highest risk
profession you can have because you only
have one client now I you know when I
started my business 15 years ago was
after being fired from a job and what
and what I recognized was that you know
I had no control over my life because I
had one client that was my employer
whereas now now I have hundreds and
thousands of clients one client fires me
it's not the end of the world you know
now my risk has gone down con
considerably almost to nothing where
when when you have a job I mean it's
just a highrisk play plus the other
thing is you're in complete control
that's the piece that I like I like
being able to if I lose a client or
you're an entrepreneur because nobody
would hire
you I'm an employer
[Laughter]
theuth but it's nice like like you know
like if you're going to lose some
business or or you do lose some business
you can go out and you can go out and
generate business and and and fill that
Gap Financial Security is more important
than job security time out e and ess's
get punished for making mistakes or they
lose their job B's and I's get richer
from the mistakes because they learn
from their mistakes
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