Ben Simpson summarizes a single lesson from the book Rich Dad Poor Dad: you cannot build wealth by trading hours for income because earned income is taxed immediately (he cites 20–47% as typical). The pathway to wealth, he argues, is to own a business or invest to grow equity so gains compound and are taxed later (or not taxed if you borrow against investments instead of selling). He credits this shift in mindset and using compounding for moving from poverty to eight-figure wealth.
Chapters
I learned this one thing from rich dad, poor dad, that took me from broke to eight figures in wealth. The thing that it taught me was that you cannot get rich by working hours and getting paid for those hours you work. You are taxed by the government to remain poor. Every dollar that you get in your bank account has already been taxed. Every dollar you work for comes in your bank account at a discount. They're already taking anywhere between 20% and 47% of your money. What you need to do is you need to either own a business or you. You need to invest and grow equity. If you grow equity in investments, it compounds and grows and you don't get taxed until you sell it. So if you take that money that you earn from your income and you put into investments and let it grow and use the eighth wonder of the world, which is compounding interest, that is the only way you can get ahead. You then pay tax down the line. Or if you're really smart, and this is what really the rich do, they never pay tax because they never sell their investments. They lend against those investments and they grow it again. That is the thing that changed the game. It took me from having no idea about money being completely poor and broke to where I am today. And that is the thing you need to understand about investing and get that money into investments and into assets.
