Blog | Personal Finance

Taxes are your largest single expense

How taxes are stealing your money and your time

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Robert Kiyosaki says, “Taxes are your largest single expense.” And I couldn’t agree more.

The average person in a developed country spends 25-35 percent of their life working to pay taxes. That means more than two hours of every workday are dedicated to feeding your government. And three to four months out of every year are spent working solely so that you can pay your taxes.

Think about that. That’s 13 years in your work life, just working to pay taxes.

You might be thinking, “I have no choice. Taxes are taxes and the government is going to take what they want.”


Taxes are based on your facts and circumstances—changing your facts will change your taxes.

There are millions of people who legally pay little or no tax. The law is written as such, and they understand how the tax laws work. Those that pay little to no tax understand that the tax law is a tool the government uses to shape the economy and promote social, agricultural, and energy policy.

Play By The Rules Of The Rich

Robert says, “When it comes to taxes, the rich make the rules." I believe, that taxes reward the rich, and punish the middle class. Afterall, someone has to pay taxes. The middle class, of course, does not like this. That is why they get so mad when they find out that the rich can avoid paying taxes and when they find out that the rich often avoid paying taxes because they help write the rules.

All you have to do is learn the rules of the rich.

First, stop giving the IRS your time. Learn to trade your money for time and engage in activities the government uses to shape the economy. Remember, the tax law is a series of stimulus packages for entrepreneurs and investors.

Rule #1 The rich pay very little in income taxes because they don't earn their money as employees do. They know that the best way to legally avoid taxes is by generating passive income out of the right side of the CASHFLOW Quadrant-the business (B) and investing (I) side.

Passive income, the kind of income generated on the right side of the quadrant is much better than earned income, the kind earned on the left side of the quadrant. Passive income is taxed less, and it's also a result of cash-flowing assets, not selling your time as an employee.

Rule #2 Tax law is written to reduce your taxes. In the U.S. for example, there are over 5,800 pages of tax law. Only about 30 pages are devoted to raising taxes. One line, Section 61(a), says, “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived…” There are then several other pages of tax rates and a few other miscellaneous taxes. The remaining 5,770 pages are entirely devoted to reducing your taxes.

You may not believe me about Rule #2. Go ahead ask your own accountant how much of the tax law in your country is devoted to raising taxes. Those that tell you it’s “your duty” or “it’s patriotic” to pay taxes is both ridiculous and wrong.

It’s actually your patriotic duty to reduce your taxes by all legal means.

If you still don’t believe me, think about this.

If 99.5 percent of the tax law is written to help you reduce your taxes, then the government must really want you to do just that. Once you truly believe these two rules and have them firmly planted in your mind, you’ll realize you have the right to reduce your taxes every minute of the day. All you have to do is learn the rules of the game.

To learn more about Tax Free Wealth, get my book now.

Original publish date: January 21, 2019

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