How the Rich Pay NO Taxes (Legally!)

Summary

Rich Dad Radio Show: How the Rich Pay NO Taxes (Legally!)

Episode Release Date: February 12, 2025

In the February 12, 2025 episode of Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business, host Robert Kiyosaki delves deep into the intricate world of taxes, exploring how the wealthy legally minimize their tax burdens. Joined by his wife Kim Kiyosaki, tax advisor Tom Wheelwright, and corporate attorney Garrett Sutton, the episode provides listeners with actionable insights into tax strategies, business structuring, and financial protection mechanisms.

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1. The Importance of Addressing Taxes

Robert Kiyosaki kicks off the episode by emphasizing the critical nature of understanding taxes. He remarks, “I get sexually stimulated thinking about taxes because I hate paying them” (00:08). This candid admission sets the tone for a frank discussion on the good and bad news surrounding taxes.

Kim Kiyosaki adds, “Taxes are something people... don't want to talk about. They just ignore it and say, hopefully it'll go away” (00:52). Together, they highlight the common tendency to avoid confronting tax issues, underscoring the necessity of proactive tax planning.

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2. Introducing the Experts: Tom Wheelwright and Garrett Sutton

Robert introduces the guest experts who bring specialized knowledge to the conversation:

• Tom Wheelwright, a seasoned tax advisor and author of Tax Free Wealth, shares his extensive background in accounting and tax strategy. He states, “[Tom has] spent 25 years buying, building and selling CPA firms” (04:13).

• Garrett Sutton, attorney and author of Own Your Own Corporation, specializes in corporate law and asset protection. He adds, “Nevada is a great place to set up a corporation like Wyoming” (05:10), emphasizing the strategic selection of states for business incorporation.

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3. Understanding the Cash Flow Quadrant

A central theme of the discussion is the Cash Flow Quadrant, a concept from Kiyosaki's Rich Dad series. Robert outlines the four quadrants:

• E – Employee
• S – Small Business or Specialist (e.g., doctors, lawyers, accountants)
• B – Big Business (500+ employees or a brand)
• I – Investor

He explains, “There’s 40% for employees, approximately 60% for small business or specialists... 20% for the big guys. That's why Trump can say because I'm smart” (06:00). The quadrants illustrate how different roles incur varying tax rates, with investors and big businesses enjoying the lowest tax burdens.

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4. Tax Rates Across Quadrants

Tom Wheelwright elaborates on how tax rates differ among quadrants. He notes, “The S quadrant has such a high tax rate because those people don’t use entities the way Garrett’s talking about” (10:04). This highlights the advantage of utilizing business entities like LLCs or corporations to benefit from lower tax rates, similar to those enjoyed by big businesses.

Kim emphasizes the need to transition from the E and S quadrants to the B and I quadrants to achieve greater financial freedom and tax efficiency: “Our whole philosophy of the Rich Dad Company is to move from the E and the S side, the left side of the quadrant, to the right side of the quadrant” (07:58).

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5. The Role of Business Entities: LLCs and Corporations

A significant portion of the episode focuses on the strategic use of business entities for tax minimization and asset protection:

• Garrett Sutton explains, “If you have real estate in your own name, it’s time right now to consider putting it into an LLC” (09:18). Transferring assets to an LLC or corporation not only shields them from lawsuits but also optimizes tax liabilities.

• Tom Wheelwright adds, “About 50% of the tax benefits you get if you’re a business owner or an investor come from the type of entity you use” (11:06). He underscores the importance of choosing the right entity type based on the nature of the business or investment.

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6. Choosing the Right State for Incorporation

The conversation turns to the strategic selection of incorporation states. Garrett highlights states like Nevada, Wyoming, and Delaware as prime locations due to their favorable tax laws: “Nevada, Wyoming and Delaware compete to be the best states” (19:19). These states offer benefits such as no personal income tax and robust asset protection laws, making them attractive for business owners aiming to minimize tax burdens.

Kim adds, “We personally knew early on we were not going to incorporate in California because of all the taxes” (20:00), reinforcing the importance of selecting a state that aligns with one’s financial and legal strategies.

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7. Leveraging Government Tax Incentives

Tom Wheelwright emphasizes that the tax code is a series of incentives designed to encourage specific behaviors. He explains, “The tax law is a series of incentives... It’s just a bunch of stimulus packages rolled up into taxes incentives” (17:02). By aligning business and investment activities with these incentives, individuals can legally reduce their tax liabilities.

Examples provided include:

• Real Estate Investments: Utilizing depreciation and other real estate-specific tax benefits.
• Energy Initiatives: Installing solar panels or charging stations to qualify for tax credits.

Robert cautions against making purchases solely for tax benefits: “You don’t buy anything to avoid taxes... look at the investment first and the tax consequences second” (28:13).

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8. Protecting Against Litigation and Government Overreach

The episode addresses the increasing litigiousness of society and the necessity of protecting one’s assets:

• Garrett Sutton states, “Litigation has always gone up... It’s time to get with an attorney and talk about setting up an LLC or a corporation for your protection” (09:50). Incorporating can safeguard personal assets from business-related lawsuits.

• Tom Wheelwright and Garrett discuss the dual role of entities in shielding against both private litigation and certain government actions, though they acknowledge that entities do not provide complete immunity from governmental tax enforcement.

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9. The Necessity of Education and Qualified Advisors

Robert and Kim stress the importance of financial education and working with qualified professionals. They recommend reading foundational books to gain a better understanding of tax strategies and corporate structuring:

• Tom Wheelwright’s Tax Free Wealth
• Garrett Sutton’s Own Your Own Corporation and Start Your Own Corporation

Kim highlights, “Tom’s book... has questions that people can ask when they’re looking for a good CPA accountant” (27:33), empowering listeners to engage more effectively with their advisors.

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10. Final Thoughts and Key Takeaways

As the episode concludes, Robert reiterates the critical message: understanding and strategically managing taxes is essential for financial growth and protection. He warns against simplistic approaches, such as avoiding taxes through misunderstood investments: “You don’t do things to avoid taxes” (28:30).

Key takeaways include:

• Utilize Business Entities: Form LLCs or corporations to benefit from lower tax rates and asset protection.
• Choose the Right State: Incorporate in states with favorable tax and legal environments like Nevada, Wyoming, or Delaware.
• Leverage Tax Incentives: Align business and investment activities with government incentives to minimize tax liabilities.
• Educate Yourself: Read recommended literature and engage with qualified CPAs and attorneys to optimize tax strategies.
• Protect Your Assets: Use entities and insurance to shield personal wealth from lawsuits and other risks.

Robert concludes with a strong endorsement of legal and informed tax strategies, urging listeners to take control of their financial futures by implementing the discussed methods.

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Notable Quotes:

• Robert Kiyosaki: “You better pay attention to taxes” (00:52).
• Kim Kiyosaki: “There are taxes that can benefit you and taxes that are going to decimate you” (01:46).
• Tom Wheelwright: “The tax law is a series of incentives” (17:02).
• Garrett Sutton: “If you have real estate in your own name, it’s time right now to consider putting it into an LLC” (09:18).

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This episode of the Rich Dad Radio Show serves as a comprehensive guide for listeners seeking to understand and implement effective tax strategies. By leveraging expert insights and practical advice, Robert and Kim Kiyosaki provide a roadmap to financial empowerment through intelligent tax management and business structuring.

Transcript

[Robert Kiyosaki]

This is the Rich Dad Radio Show. The good news and bad news about money. Here's Robert Kiyosaki.

Hello, hello, hello. Robert Kiyosaki, the Rich dad Radio Show. The good news and bad news about taxes. It's that time of year again. We're getting to taxes. You know, it's, you know, I get sexually stimulated thinking about taxes because I hate paying them. So if you're sitting there fat, dumb and happy and you just happy with your. I don't know what you guys, what employees do anymore, but I think they already sucked that out of your wallet a long time ago. I mean, our taxes are gone. So this is a very important show. It'll be a four part series. I don't know which part this will come up on, but in my opinion, you better pay attention to taxes. And next year, hopefully you might do something different. Any comments, Kim?

[Kim Kiyosaki]

Taxes are something people, they don't want to talk about. They just ignore it and say, hopefully it'll go away. Well, it's not going away. And I was talking to somebody just the other day and he's a business owner and he said, I said, well, you know, your taxes are going to go up. He goes, I, I'm okay paying more taxes and for my business. And I'm like, well, you're crazy. Then it's really, really important, I think that we understand what the heck is coming down the pipeline.

[Robert Kiyosaki]

So I want to repeat the words of probably one of our greatest leaders of all times. It was during the 2016 presidential election campaign and it was Hillary versus the Donald. And Hillary accuses the Donald of not paying taxes. And I didn't remember these immortal words. They will go down in history. They should be on his tombstone. And he said, that's because I'm smart and that's the truth.

[Kim Kiyosaki]

There's taxes that can benefit you and taxes that are going to decimate you. You got to know the difference. It's like an asset versus a liability. If you start calling assets or liabilities assets, you're in trouble.

[Robert Kiyosaki]

So this is the Rich dad radio program. It's our favorite subject. It's called taxes and how I do my very, very, very best. And Kim does her very, very best to not pay them. Legally, legally, legally, legally. Because I remember the first one of the first paychecks I got is what happened to my money? You know, and it was, what's fica?

[Kim Kiyosaki]

What's. Who's fica? Who's fica?

[Robert Kiyosaki]

And the Americans seemed forgot. There was an event that happened in 1773 called the Boston Tea Party. And it was a tax revolt against Mother England. And ever since then, America has been very much, pretty much tax free up until 1943 when they couldn't pay for World War II. It was a current tax payment act. So my point here is, I guess I want to repeat the words of our immortal great leader. I know some of you hate him with all your heart. Donald Trump. The reason he doesn't pay taxes is because I'm smart. That means I'm smart. So with that, I want to invite Tom Wheelwright. He is our tax advisor, the author of Tax Free wealth, and he is, in my experience, a God. I mean, this guy has made me more money simply because I haven't had to pay taxes or Kim and I haven't had to pay taxes. And then we have Garrett Sutton. And he's essential because he's our corporations attorney, or as it's called, entities. And the reason you have to have an accountant and. And an attorney is because that's what people do who are smart. Okay, with that. Says we have Garrett Sutton and Tom. They'll be talking about taxes. Why you need your own corporation, an LLC or an S. Because I don't know anything about that. Garrett does. That's a special.

[Kim Kiyosaki]

And Garrett has a couple of books called Own youn Own Corporation and Start yout Own Corporation.

[Robert Kiyosaki]

Yeah. So let's get on to the most popular subject of raising taxes. Tom, any comments? Give us a quick background of your background. When it comes comes to taxes and what qualifies you, the board from now on is qualified. What qualifies you to speak about taxes?

[Tom Wheelwright]

Well, I started with a bachelor's in accounting from the University of Utah. Then I went and got a master's of professional accounting with an emphasis in tax from the University of Texas in Austin. I spent seven years with one of the largest CPA firms in the world, Ernst and Young, including three years in their national office back when Reagan had his big tax bill. I spent 25 years buying, building and selling CPA firms. Spent 14 years as an adjunct professor in the Masters of Tax program at Arizona State University. And as Robert and KIM the last 10, 12 years spending a lot of time traveling around the world talking about taxes. So this is my study is taxes.

[Robert Kiyosaki]

Okay, Mr. Sutton, give us your background. I mean, you went to the same school with Kamala.

[Garrett Sutton]

Well, I went to two schools that you really like, Robert. I went to the University of California at Berkeley.

[Robert Kiyosaki]

That's even worse.

[Garrett Sutton]

Across the bay to Hastings Law School in San Francisco. And Kamala was there a couple years after I was, and, you know, I moved up to Nevada. Nevada is a great place to set up a corporation like Wyoming. So it's time to think about not only having your entity, your corporation, LLC in place, but maintaining it. You've got to maintain it over a period of time to stay protective.

[Tom Wheelwright]

I was going to say, Garrett, you forgot the best part of Nevada, and that's Nevada doesn't have income tax. That's the best part of it.

[Kim Kiyosaki]

He left California and went to Nevada. And another point I want to make is we have Garrett, we have Tom on the show because Tom and Garrett are always talking to each other. They're talking to each other about our tax situation, our entity situation, but they talk together. And most attorneys and accountants don't talk. And that's part of the problem.

[Robert Kiyosaki]

And Garrett and Tom and I have traveled all over the world talking about taxes and corporations, but unfortunately, the average person cannot do anything about it because they went to effing school, they got a job, or they became a doctor or a lawyer. So this here is my new flip chart, since we're now on zoom time. But this is the cash flow quadrant book number two. E, S, B and I. E stands for employee. S stands for small business or specialist, like a doctor, lawyer, or accountant. B stands for big business, 500 employees or more, or a brand, which does a brand. And I stands for inside investor. There's a very big difference. These guys invest from the outside, but they invest from the inside. And the tax rates, and Tom will verify this is basically the same all over the world in Russia and America. I don't know about Havana, but anyway, there's 40% for employees, approximately 60% for small business or specialists like doctors or lawyers or small entrepreneurs. And this is 20% for the big guys. That's why Trump can say because I'm smart. And I stands for zero, which is why Trump says I'm smart. I want to be very clear on this. You have to qualify to get here. Just like if I wanted to play in the mattress golf tournament, I'd have to qualify. Tiger woods has to qualify every year. It used to be he had to go to a bank to qualify for a loan. Today they just give it to you. So these are the four things. I'll be very clear on this, because just don't think you can go out and do this. We do not recommend it because you'll go off to jail in handcuffs, not paying taxes.

[Kim Kiyosaki]

But to your point, too, is the ES side. That's Your poor dad. That's where your poor dad was. And the bi side is where the rich dad. Where rich dad is. And so part of our whole philosophy of the Rich Dad Company is to move from the E and the S side, the left side of the quadrant, to the right side of the quadrant.

[Robert Kiyosaki]

But you have to do something. And 99% of the people go, oh, yeah, yeah, I know that.

[Kim Kiyosaki]

Yeah. But they don't.

[Robert Kiyosaki]

But they don't do anything. As Buckminster Fuller guys and Justice Dallas says, everybody knows a lot. They just don't do anything. They sit there and get their pockets picked. So there's two things reason Garrett and Tom, accountant and attorney, are important to this. Garrett's specialty is corporate law. And you got to protect yourself. One, from taxes, and number two, from lawsuits. If you have money, they see lawsuit all over Phoenix. I don't know about the rest of the country, but I see these big signs in Iraq. We'll give you a check. You know, learner and row the place to go. And they're just saying, if you've been injured, are you a victim?

[Garrett Sutton]

Are you a victim?

[Kim Kiyosaki]

Are you a victim? It's a victim society.

[Robert Kiyosaki]

So not only do you have to worry about the government, you have to worry about your next door neighbor who's going to sue you when they trip over your sidewalk. So with that said, that's why you must have. If you're going to play on the B and the I side, you need both an accountant and an attorney. That's the difference. So with that said, Garrett, give us a few minutes on why you think litigation is going to go up. Lawsuits?

[Garrett Sutton]

Well, Robert, litigation has always gone up. If you have real estate in your own name, it's time right now to consider putting it into an llc. If you operate a business as a sole proprietor, as Robert says, people are looking for enterprises to sue. And if you do that work in your individual name, they can reach everything thing you own. So it's time right now to get with an attorney and talk about setting up an LLC or a corporation for your protection, because litigation is on the rise.

[Kim Kiyosaki]

That's a good point. Because most people, they have everything in their name. They're proud to have everything in their name. My house is in my name. My cars are in my name. My business is in my name. And as you said, you get sued for anything, and they can come after everything on top of that.

[Tom Wheelwright]

Kim, the reason that the S quadrant has such a high tax rate is because those people don't use entities the way Garrett's talking about. So this is why, like you're talking about Kim Garrett and I talk because the entities for the legal side have an impact on the tax side. And so if you're in the S quadrant and you don't have an entity, you're going to pay the highest tax possible. If you do, you can have the same tax rate as the big business. You have to qualify, be getting the education and the advisors.

[Robert Kiyosaki]

Yeah. On this side.

[Tom Wheelwright]

Yep.

[Robert Kiyosaki]

So you can still be this, but act like this.

[Tom Wheelwright]

That's right.

[Robert Kiyosaki]

And tax wise.

[Kim Kiyosaki]

And not only do you have to be qualified, you said, tom, your advisors need to be qualified. Because for Robert and I, when we started out, we didn't have an accountant, we didn't have an attorney. And then as we got more and more sophisticated, we needed higher levels of accountants and attorneys.

[Robert Kiyosaki]

So, Tom, when you talk to people about minimizing taxes legally, how does a corporation, what Garrett says, come into play with the government?

[Tom Wheelwright]

You know, about 50% of the tax benefits you get if you're a business owner or an investor come from the type of entity you use. So whether it's an LLC and different entities are used for different purposes, I mean, we use a different entity for real estate than we use for a business. Some people want to be a corporation, some people want to be an llc, some people want to be a limited partnership. But these all work together. This is why I think the major qualification is education. Right. Because if you don't understand how these work together. Garrett and I have seen advisors talk about getting better advisors. Kim, Garrett and I, I know you remember this, Garrett. We remember advisors coming and suggesting these entities for people. And we're going, this looks like malpractice to us. I mean, this is just, this is going to raise your taxes and not going to give you the asset protection. And so you really have to have the advisors working together. And you need to know what you're doing as well.

[Robert Kiyosaki]

Yeah. And the name, the name of the game is are they qualified? Let me say it again. Tiger woods is the greatest golfer ever lived. He still has a qualified to play in the Masters. Do you know what I mean? And most people just want to go out there and play the Masters and then they wonder why they get their butts kicked. They wonder why they get turned down. So that's why at Rich dad, we strongly suggest you legally qualify, but also work only with qualified advisors. We'll be right back with the second part of the Rich dad radio show.

Donald Trump returned to office and Republicans take control of The House and Senate. It's huge news. But the challenges we face as a nation are still here. In four years of chaos, the dollar has lost value. Inflation run rapid, interest rates through the roof, and wars rage across the globe. Trump has inherited an economy that's a total mess and the burden to rebuild is huge. This isn't going to get fixed overnight. Especially with the ongoing assault of the dollar from brics nations and our growing national debt. Your savings are still vulnerable. Gambling with your wealth is not an option. If we've learned anything is that we need to take action and protect what we've worked so hard to earn. That's why we partner with Allegiance Gold, a company we trust to help you protect your financial future. Gold and silver, our time tested ways to hedge against economic chaos. They're not just investments. They're peace of mind for your wealth. When you start your investment with Allegiance Gold today, you'll get free silver as part of their exclusive offer. Just mention Robert sent you and they'll take care of you. Don't sit on the sidelines. Act today, secure your wealth. Go to protectwithrobert.com or call 8443-ROBERT. That's 844-376-2378. Let them help you get started. For techwithrobert.com Donald Trump returned to office and Republicans take control of the House and Senate. It's huge news, but the challenges we face as a nation are still here. In four years of chaos, the dollar has lost value, inflation run rapid interest rates through the roof, and wars rage across the globe. Trump has inherited an economy that's a total mess and the burden to rebuild is huge. This isn't going to get fixed overnight. Especially with the ongoing assaults of the dollar from BRICS nations and our growing national debt. Your savings are still vulnerable. Gambling with your wealth is not an option. If we've learned anything is that we need to take action and protect what we've worked so hard to earn. That's why we partner with Allegiance Gold, a company we trust to help you protect your financial future. Gold and silver are time tested ways to hedge against economic chaos. They're not just investments, they're peace of mind for your wealth. When you start your investment with Allegiance Gold today, you'll get free silver as part of their exclusive offer. Just mention Robert sent you and they'll take care of you. Don't sit on the sidelines. Act today. Secure your wealth. Go to protectwithrobert.com or call 8443-ROBERT. That's 844-376-2378. Let them help you get started. For techwithrobert.com.

Welcome back, Robert Kiyosaki, the Rich Dad Radio Show. The good news and bad news about money. You can listen to the Rich Day radio program anytime, anywhere on Android, YouTube, and whatever. If we just love, as long as we don't get demonetized or taken off for saying criminal and criminal words here. But I want you to know our advice is backed up by two professionals, dear friends, for not thousands of, but tens of years right now.

[Kim Kiyosaki]

Yeah, we go back many lifetimes.

[Robert Kiyosaki]

Look, you got, you got to play the game with professionals. Don't play with amateurs. You know, we're talking about not paying taxes and making millions of dollars. Legally, legally, legally, legally. You know, you can cheat the system, but you'll just go to jail and become somebody's boyfriend. So you don't want to do that.

[Kim Kiyosaki]

Or, or the want to pay high taxes. And don't question it. Oh, what if the irs, what if the IRS comes after me? Oh, my God, the IRS comes after me.

[Robert Kiyosaki]

And you can listen to this podcast [e-mail] and reason we archive all our podcasts is so you can listen to it again because this is a very big subject. Taxes. And if you're gonna. If you paid taxes, you're an idiot. You've done something wrong. If you're an idiot, you'll pay taxes. And the more money you make because they're gonna give you a pay raise, you'll pay more taxes. So that's why our guests today are the rich dad advisors, Tom Wheelwright, author of the book Tax Free wealth, and Garrett Sutton, owner of your own, your own corporation. And if you're going to play the game on this side. So, Tom, what do you want to say about taxes and what people can do to minimize them? Because that's what, that's what they want to hear. They don't. They want to hear about anything else.

[Tom Wheelwright]

Remember that the tax law is a series of incentives. You know, it's just a bunch of stimulus packages rolled up into taxes incentives. The CARES act was tax incentives. This last one had. This last bill had tax incentives. The next one, all that money that they're doling out, those are tax credits. So you just have to understand that the government does everything, everything that they want to encourage, they do with tax incentives. And so all you have to do is find out what they want you to do, go do it, and you don't pay tax. Frankly, if you look at Trump and his you know, he earned what, $400 million on the Apprentice and then gets a $70 million refund in taxes. Well, why was that? Because he did what the government wanted. He took the money from the Apprentice and put it into real estate.

[Robert Kiyosaki]

That means I'm smart, but he did.

[Kim Kiyosaki]

So, Tom, what are, what are some of the, are there new stimuli, are new incentives? Where, what are some of the incentives people can take advantage of?

[Tom Wheelwright]

Well, I mean, the biggest incentives right now are still real estate. Okay. And business. Business and real estate are the two big incentives. We already have an extension. For example, if you put in charging stations, you get a tax credit. If you buy, if you put on solar panels, you get tax credits. There's lots of, I mean, there's lots of energy tax benefits out there.

[Robert Kiyosaki]

I think the biggest benefit of all. What happens if you buy your own personal jet? Is there a tax credit for that?

[Tom Wheelwright]

There can be.

[Robert Kiyosaki]

Only kidding. We're only kidding. I'm just going to make a point here, you guys. I'm trying to make a point here, you guys. There's a different world out here. All of you A students went here, E's and S's. Oh, I got a high paying job. I'm a doctor, a lawyer, accountant, and that's the difference. But if you love paying taxes, just stay on this side. Any comments? Are Garrett?

[Garrett Sutton]

Yeah, Robert, I agree that all we're talking about are incentives. The government incentivizes people to set up corporations and llc. Every state has an LLC law. You'll talk to some people and say, well, I don't think I should use an LLC that's hiding assets. No, it's not protecting yourself. Every state allows for it. They don't cheat.

[Robert Kiyosaki]

Aren't there some states that are better than others too?

[Garrett Sutton]

Yes, there are. Nevada, Wyoming and Delaware compete to be the best states.

[Kim Kiyosaki]

They want business owners in their states. Right.

[Robert Kiyosaki]

Operations.

[Garrett Sutton]

So, you know, it's a good source of income for those three states. But all states offer these incentives to protect yourself because governments know they're not going to teach you this in school. But they know that business people need to be protected when they're taking risk. And so this is, there's nothing improper about it. You just have to know how to use it.

[Kim Kiyosaki]

But you also have to know where not to incorporate. I mean, we personally knew early on we were not going to incorporate in California because of all the taxes.

[Garrett Sutton]

That's right.

[Kim Kiyosaki]

Right. Is that right?

[Tom Wheelwright]

Yeah. So. So. So my son just started a business. He lives in Oakland, California. He's like railing Against California. I can't believe they taxed me just because I'm here. I didn't even make any money and they taxed me. I'm going. That is California. They tax wherever they possibly can. They go after people that they, I think legitimately, they have no business taxing and they'll still tax them. So y. There are good states. I mean, there are actually a lot of good states, not just Nevada, Wyoming. I mean, you know, Florida doesn't have a personal income tax. Texas doesn't have an income tax. Arizona has actually good, good entity laws. Their income tax seems to be going up, but they have good entity laws. So it really does make a difference where you, where you set up that entity.

[Kim Kiyosaki]

And you don't have to live where you set up your entity.

[Tom Wheelwright]

You don't now, you still may have to. Garrett can talk about registering to do business. You'll still be taxed on your income that you earn in that state. Okay. Unless, for example, it's like income from interest and dividends that you can actually get out of a state even though you live in the state. So it's actually possible to. I mean, state taxes is something people don't talk about, but they're becoming more and more important as the states continue to do a money grab for tax revenue.

[Robert Kiyosaki]

And then we want to educate people on how to pay taxes, not pay taxes legally, like former President Donald Trump. We'll be right back.

Donald Trump returned to office and Republicans take control of the House and Senate. It's huge news. But the challenges we face as a nation are still here. In four years of chaos, the dollar has lost value, inflation run rapid, interest rates through the roof, and wars rage across the globe. Trump has inherited an economy that's a total mess and the burden to rebuild is huge. This isn't going to get fixed overnight. Especially with the ongoing assaults of the dollar from BRICS nations and our growing national debt. Your savings are still vulnerable. Gambling with your wealth is not an option. If we've learned anything, it's that we need to take action and protect what we've worked so hard to earn. That's why we partnered with Allegiance Gold, a company we trust to help you protect your financial future. Gold and silver are time tested ways to hedge against economic chaos. They're not just investments, they're peace of mind for your wealth. When you start your investment with Allegiance Gold today, you'll get free silver as part of their exclusive offer. Just mention Robert sent you and they'll take care of you. Don't sit on the sidelines act today. Secure your wealth. Go to protectwithrobert.com or call 8443-ROBERT. That's 844-376-2378. Let them help you get started. For techwithrobert.com the average time to hire for most organizations is 30 to 45 days. Are you tired of the costly and lengthening hiring process? Simplify and speed up your recruitment by using the experts and express employment professionals. Reduce time to hire, cut down on multiple interviews and lower your recruitment costs. Whether you're looking for contract workers or new team members, our streamlined recruiting, candidate screening and hiring process is more efficient than hiring on your own. Visit expresspros.com today. Haven't used a staffing company before? We know that you enjoy learning new things and keeping up with trends and efficiencies. Make a change this year with your hiring. Businesses are navigating a landscape that has never been more expensive or Regulated. Start at ExpressPros.com to find the location near you. With more than 860 locally owned offices, you'll get the hiring support that you [e-mail].

Garrett, what do you have to say about the combination of protecting yourself from lawsuits but as well as from the government?

[Tom Wheelwright]

Well, first of all, you want to.

[Garrett Sutton]

Protect yourselves from lawsuits. We're a hugely litigious society. But you also want to protect yourself from the government if possible. Now, you know the IRS has some rules that they can go right through your corporation. You know, you can't, you can't really protect yourself in certain cases from the irs. But you still, in terms of private litigation, you need a corporation or an llc, because that for me is the biggest risk. You need insurance as the first line of defense, and then you need these entities as a second line of defense because again, people are suing all the time.

[Robert Kiyosaki]

And it's going to get worse. I mean, would you say that's going to happen?

[Garrett Sutton]

Yeah, it is going to get worse.

[Robert Kiyosaki]

So let's say I'm Mr. And Mrs. Joe Average. I have a house and a car and they have a job and they have a W2. Can you help them at all as an attorney?

[Garrett Sutton]

Well, you're going to have insurance, certainly, and you're going to look at protecting the equity in your house with a homestead. Some states are good, some states are bad. But then if you have a lot of equity in your house, you're going to use an LLC. If you're a W2 employee, there's not much I can do for you.

[Robert Kiyosaki]

And that's and also if you're outside, that's this person here, the employee. Go to school and get a job. You know, you'll be safe. What a bad piece of advice that is. And over here, if you're really smart, become a doctor or a lawyer. What happens with doctors and lawyers if they're not smart when it comes to taxes, Tom?

[Tom Wheelwright]

Oh, they get hammered. They just get hammered. And they get hammered more and more. Even Trump's tax bill hammers doctors and lawyers. So there are all sorts of benefits for everybody else, but doctors, lawyers, and accountants got absolutely hammered.

[Robert Kiyosaki]

So let me ask you this. So S stands for small business, too. So a lot of these guys here, I might hear it every day now. Guess what? I'm going to start my own business immediately. They're moving here and they're moving into Garrett's crosshairs or the, the people that Garrett's going to protect you from. Is that correct? Garrett? You start a small business, you're in.

[Garrett Sutton]

Trouble as a W2 employee that your employer typically protects you unless you do want unwillful acts. But as a small business owner, you're going to be sued personally. If you're operating in your individual name, you've got at that point to set up a corporation or an LLC for protection.

[Robert Kiyosaki]

I hear so many people say, oh, yes, I just started my own business. You know, I'm small. Yet right now, Tom, what's going to happen to them tax wise?

[Tom Wheelwright]

Well, again, unless they set up that corporation, llc, they're going to get hammered. The good news is, to your point, Kim, there are incentives there, and the small business can also be at that 20% tax rate. You can do that. You can actually be at 20% while you own your company and zero when you sell it. So there are lots of incentives for the business owners and the small business as well. It's just that very few small businesses actually understand that or have advisors that understand it.

[Robert Kiyosaki]

Right. And the reason we have Tom and Garrett on is we don't. We're not, you know, we don't. We don't make recommendations what to buy, sell and all this, but all of our advisors have their own books, and we recommend buying Garrett's books and Tom's books because it's cheaper than hiring them.

[Kim Kiyosaki]

And Tom's book is called Tax Free Wealth. And one of the things in your book, Tom, that I love is you actually have questions that people can ask when they're looking for a good CPA accountant, questions that they should be asking. And Garrett, your book is Start your own corporation and own your own corporation. Same thing. Great, great, great advice.

[Garrett Sutton]

Because reading these books, you're going to be able to talk to your advisor instead of them charging you to explain everything. You're on second base already because you've read the book, you understand some of the concepts.

[Robert Kiyosaki]

Yeah, it's a lot. It's a lot cheaper than hiring them and then asking stupid questions, finding out.

[Kim Kiyosaki]

Yeah, right.

[Robert Kiyosaki]

Final words there, Tom.

[Tom Wheelwright]

Well, you know, taxes are going up unless you're smart and you get educated and get the right advisors and get qualified. And then taxes are going down. And I think taxes are going down further and further for those who really understand the incentives that are coming.

[Robert Kiyosaki]

Yeah. Another thing, too, is that this guy says, should I buy real estate to avoid taxes? I said, don't you ever do that? That is the most stupid thing you can do. That's what being qualified means. You don't ever do things to avoid taxes. I've taken real estate courses. I'm taking them since I was in 20s, and that's why I understand real estate. Kim has managed thousands of properties. She understands real estate. But you don't just buy real estate to avoid tax. Is that correct, Tom?

[Tom Wheelwright]

No. You don't buy anything to avoid taxes. I can't tell you how many people will tell me. Well, my accountant said I need to buy a Hummer by the end of the year to avoid taxes. I'm going, so do you need the Hummer? No. So you're going to. So basically, you're going to give up $100,000 to save $30,000. That makes no sense. Same with real estate. Why would you get into something you don't understand? Why don't you look at the investment first and the tax consequences second?

[Robert Kiyosaki]

Take Garrett. Do you have an entity for personal stupidity?

[Garrett Sutton]

No, I don't.

[Tom Wheelwright]

That's called an estate.

[Garrett Sutton]

No, but we do have people who just won't listen. I mean, they're. They're insistent that they're never going to be sued. And then when they call me and they go, oh, yeah, I did get sued, then it's too late. So that is personal stupidity.

[Robert Kiyosaki]

Yeah. You can't buy car insurance after you've had the wreck.

[Garrett Sutton]

Right.

[Robert Kiyosaki]

And then for all of you guys out there with 401ks, we'll be praying for you tonight. We will. Lighting candles and praying for you. Or your stock traders will be praying for you because you're just paying huge taxes unless you're smart. And the third category is gold, silver, and Bitcoin. Thank you guys.

[Kim Kiyosaki]

Thank you.

[Robert Kiyosaki]

Thank you.

[Kim Kiyosaki]

Thank you, Garrett. Thank you, Tom.

[Garrett Sutton]

Thanks.

[Kim Kiyosaki]

This podcast is a presentation of Rich Dad Media Network.