What Schools Will Never Teach You About Money By Robert T. Kiyosaki

 E stands for employee
 S stands for small business or self-employed
 B stands for big business (500 employees)
 I stands for investor
E
S
B
I

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Chapter Two
Unfair Advantage
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pays the most in taxes. If you send your money to others to invest for 
you, you pay more in taxes than the person you send your money to.
My poor dad sent his money to people he trusted to invest for him. 
My rich dad had people like my poor dad sending money to him.
The difference, from a tax perspective, is like night and day.
FAQ
Which quadrants pay the highest taxes?
Short Answer 
The people in the E and S quadrants.
 
Fin Ed History 
The following is a diagram of the CASHFLOW Quadrant showing 
the historical changes in tax laws:
The U.S. Congress passed the “Current Tax Payment Act of 1943” when 
the United States needed money to fight two wars, one in Europe and 
one in the Pacific. The 1943 change gave the government the power to 
force employers to deduct taxes from the employee’s paycheck. In other 
words, the government got paid before the employee got paid. The E 
quadrant lost control over their money. Today, when employees receive 
their paycheck, they notice there is a lot of money missing, the difference 
between net pay and gross pay. 
Due to our present financial crisis and the government’s need for more 
money, the gap between gross and net pay is increasing for those in the E 
quadrant. Employees work harder, earn more, and take home less.
In 1986, Congress passed the “Tax Reform Act of 1986.” The purpose of 
this act was to plug the tax loopholes that people in the S quadrant were 
enjoying. Up until 1986, most in the S quadrant were using the same tax 
loopholes the B quadrant enjoyed. Since the government needed more 
money, they went after the doctors, lawyers, small-business owners, and 
specialists, such as consultants, real estate brokers, stockbrokers, and other 
self-employed people.
It was the 1986 Tax Reform Act that helped trigger the 1987 stock-
market crash and the 1988 crash of the savings-and-loan industry, which 
led to the real estate crash, which led to the last recession. It was a great 
time for B’s and I’s to get ahead.
Today, doctors, lawyers, and accountants in the S quadrant pay the 
highest percentages in taxes.