If you don't make this switch in your head, you will always live in fear of losing money, trying to be cheap, trying to be frugal, rather 472 Rich Dad's Guide to Investing This is the Diagram of the 10% Who Make 90% Income Statement liabilities Again the question is, "How can low income and high ex- penses make you rich?" If you can begin to understand how and why this is done, then you will begin to see a world of greater and greater finan- cial abundance. Compare the previous diagram with the following dia- gram: Why Do Rich People Go Bankrupt? 473 This is the Diagram of the 90% Who Make 10% Income Statement This is the financial diagram of most of the world's popu- lation. In other words, the money comes in and goes out the expense column and never comes back in. That is why so many people try to save money, be frugal, and cut back on ex- penses. This diagram here is also the diagram of the person who will emphatically say, "My house is an asset." Even though the money goes out the expense column and does not return at least not immediately. Or the person who says, "I'm losing money each month but the government gives me a tax break to lose money." They say that rather than say "I'm making money on my investment and the government gives me a tax break to make money." My rich dad said, "One of the most important controls you can have is found in this question. And the question is, 'What percentage of the money going out your expense column 476 Rich Dad's Guide to Investing "The main reason I build a business is for the assets the busi- ness buys me." For many entrepreneurs, the business they build is their only asset because they utilize a single corpora- tion strategy and fail to harness the power of a multi-corpora- tion investment strategy. (Again, to utilize such a strategy requires a team of professional advisors.) This points out that the big advantage the В quadrant has is that the tax laws for that quadrant allow you to spend pre-tax dollars to make you financially richer and in fact, the laws reward you for investing as much money as possible. After all, it is the rich who write the rules. The Power of Expenses So this is why expenses can be an asset or liability, regard- less of how much money you make. One of the reasons 90% of the people only have 10% of the money is because they do not know how to spend the money they make. As rich dad said, 'A rich person can take trash and turn it to cash. The rest of the people take cash and turn it to trash." So what is the answer to the question, "Why do rich peo- Why Do Rich People Go Bankrupt? 477 pie go bankrupt?" "The same reason poor people remain poor and the middle class struggles financially." The reason the rich, the poor, and middle class go broke is because they lose control of their expenses. Instead of using their expenses to make them rich, they use their expenses to make them poor.