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

Professional Answer from Tom Wheelwright
There is a reason that the tax law rewards those who make their money 
and other people’s money work for them. It’s simply because these are 
the people who invest directly in the economy. The government wants us 
to invest in the economy to create jobs, housing, and opportunities for 
others. With a little financial education, anyone can learn how to make 
the tax laws work in their favor. After all, these are not inadvertent 
loopholes in the law we are talking about. They are intentional benefits 
for business owners and investors.
Portfolio Income
Portfolio income is, in most cases, known as capital gains in the 
investment world. Generally, capital gains are achieved when you buy 
low and sell high. In the stock market, a person can sell high and buy 
low, aka shorting a stock, and achieve capital gains, a profit. 
Most people who invest are interested in capital gains. Investing 
for capital gains is not really investing. It is technically trading, which 
is why it receives a different tax status.
Trading is buying something in order to sell it. Traders do not 
really want what they have purchased. Traders are no different than 
a dress-shop owner who buys dresses at wholesale and sells the same 
dresses at retail. This is why most traders are in the S quadrant, and 
many are taxed accordingly.
During the real estate bubble, most real estate flippers imagined 
they were investors. But they were really real estate traders: buying low, 
sometimes fixing the property up, and selling to a greater fool. These 
flippers gave true real estate investors a bad name. All these amateurs 
did was ratchet up prices, muddy the waters, and make a lot of noise 
about how much money they were making, in the process drawing 
into the market greater fools than themselves. 
The problem was that they were going after capital gains, aka 
portfolio income, As stated in chapter one, going for capital gains is
no different than gambling. At the height of the market, between
2006 and 2007, meek and mild checkout clerks at supermarkets left

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Chapter Two
Unfair Advantage
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buying. Again, we made sure there were stable jobs in the area because 
real estate is only as valuable as the jobs in the area.
In the next chapter, the chapter on the unfair advantage of debt, 
I will explain how we got that $1 million back, also tax-free. In other 
words, our $1 million was returned to Kim and me and was moved 
into another project. Our entire 400-unit project is completely free, 
simply because we use debt to get our money back. Even with a free 
400-unit apartment house, we receive about $8,000 a month, also 
almost tax-free. Eight thousand dollars a month is not a lot of money 
but, without taxes, it is the same as having a job working for $12,000 
a month. 
Again, please remember that I do not write to brag, because 
bragging is not cool. I write to explain and inspire some of you to 
increase your financial education. Also, we did not start at this level. 
Kim, our partner Ken, and I all started small and dreamed big. Like 
rich dad, we are always studying, learning, and earning. Financial 
education and real-life experience is the key. We have no plans on 
stopping. At this stage in our educational development, why stop?
Life is too much fun.