Page 63 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

Chapter 4

Financial IQ #2: Protecting Your Money

Protecting your money from financial predators is important. As most of us

know, the world is filled with people and organizations waiting for the
opportunity to help themselves to your money. Many of these people and
organizations are very smart and powerful. If they are smarter than you, or

have more power than you, they will get your money. This is why financial
IQ #2 is so important.

How Do You Measure Financial IQ #2?

Financial IQ #1 is generally measured in gross dollars. Financial IQ #2 is
measured in percentages. Here’s what I mean. The following are three

examples of three different percentages:

1. In America a person who earns $100,000 a year from wages may

pay as much as 50 percent in combined taxes such as federal, state,
and FICA. This person’s net after-tax income is $50,000.
2. Another person earns $100,000 income from their investments and
pays 15 percent in taxes. This person’s net after-tax income is
$85,000.

3. A third person earns $100,000 income and pays 0 percent in taxes.
This person’s net after-tax income is $100,000.

In the examples above, the person who pays the least percentage in taxes

has the highest financial IQ #2: protecting your money, because less money
is lost to financial predators.