Again, I refer to Ray Kroc, founder of McDonald's, saying virtually the same thing to my friend's MBA class. Ray Kroc said to the class, "My business is not hamburgers. My business is real estate." That is why McDonald's owns the most valu- able real estate in the world. Ray Kroc and rich dad under- stood that the purpose of a business was to buy assets. Rich Dad's Investment Plan When I was a young boy still in elementary school, rich dad was already placing ideas in my head about the differ- ences between being rich, poor, and middle class. During one of our Saturday lessons, he said, "If you want job security, fol- low your dad's advice. If you want to be rich, you need to fol- low my advice. The chances of your dad having both job security and becoming rich are slim. The laws are not written in his favor." One of rich dad's six lessons as described in Rich Dad Poor Dad was a lesson about the power of corporations. In CASH- FLOW Quadrant, I wrote about how the different quadrants were governed by different tax laws. Rich dad used these les- sons to show me the difference between his investment plan and my real dad's investment plan. These differences greatly affected my life's path after my formal education was com- plete and my military duty was over. How то Get Rich Quick 291 "My business buys assets with pre-tax dollars," said rich dad as he drew the following diagram: "Your dad tries to buy assets with after-tax dollars. His fi- nancial statement looks like this," said rich dad: As a young boy, I really did not fully comprehend what rich dad was trying to teach me, yet I recognized the difference. Because I was confused, I spent much time quizzing him on what it meant. To help me understand a little better, he drew the following diagram: 292 Rich Dad's Guide to Investing Income Ixpees* Ant Tour Bid Buy Assets Taxes Ш "Why?" I asked rich dad. "Why do you pay your taxes last and why does my dad pay his taxes first?" "Because your dad is an employee and I am a business owner," said rich dad. "Always remember that we may live in a free country, but everybody does not live by the same laws. If you want to be rich, or get rich quickly, you had best follow the same laws the rich use." "How much in taxes does my dad pay?" I asked. "Well, your dad is a highly paid government employee, so I estimate that he pays at least 50% to 60% of his total income in taxes in one form or another," said rich dad. 'And how much do you pay in taxes?" I asked. "Well, that is not really the correct question," said rich dad. "The real question is: 'How much is my taxable income?'" I became confused and asked, "What is the difference?" "Well," said rich dad. "I pay taxes on net income, and your dad's taxes are withheld from his total income. That is one of the biggest differences between your dad and me. I get ahead faster because I get to buy my assets with gross income and pay taxes on net income.