Back in school, Robert loved the story of Robin Hood and his gang who took from the rich to help the poor. It was exciting, but his rich dad didn’t agree. He thought Robin Hood was a crook. Rich dad believed the Robin Hood story inspired the tax system he didn’t like. Just as Robin Hood took from the rich to give to the poor, the government tried to do the same. But, according to rich dad, they didn’t really succeed.

In rich dad’s view, it was the middle class, not the rich, who ended up paying the most taxes. The rich found ways to avoid paying as much by using smart strategies like corporations. One of these strategies is using a corporation, which lets them spend money before paying taxes, unlike individuals who get taxed first. By using corporations, the rich can pay less in taxes.

Corporations also provide another advantage: they protect the owners from losing all their personal possessions if the business fails. If you fail as an individual, you may have to sell your things and declare bankruptcy. But with a corporation, if it fails, you only lose your investment, and your personal belongings are safe. So, the lesson here is that the rich understand the tax system and legal rules to stay ahead and keep more of their money.