by Jim Rohn

Others say, “We’re not about to pick up the tab for defense.” Well then, I suggest they go to a place which doesn’t offer defense as part of the package. If one is going to enjoy the benefits, one should pay a share.

Now, let me add this: Don’t pay more than you should. By all means take advantage of the incentives. They were given to you as a reward for channeling your money into areas the government thinks helps the economy.

All I’m saying is that when everything has been computed, all legitimate deductions have been taken, and you reach that last line on your income tax form, whatever the amount, pay it. And pay with happiness, knowing that you’re feeding the goose that lays the golden eggs – the golden eggs of freedom, safety, justice, and free enterprise. Some goose! Some eggs!

The 70/30 Rule –

After you pay your fair share of taxes, you must learn to live on seventy percent of your after-tax income. This is important because of the way you’ll allocate your remaining thirty percent. The seventy percent you will spend on necessities and luxuries. The thirty percent? Let’s allocate it in the following ways:

1) Charity

Of the thirty percent not spent, one-third should go to charity. Charity is the act of giving back to the community that which you have received in order to help those who need assistance. I believe that contributing ten percent of your after-tax income is a good amount to strive for. (You may choose a larger or smaller amount — it’s your plan.)

The act of giving should be taught early in life. The best time to teach a child the act of charity is when he gets his first dollar. Take him on a visual tour. Take him on a tour of a place where people are truly helpless so that he learns compassion. If a child understands, he won’t have any
trouble parting with a dime. Children have big hearts.

There is another reason why the act of giving should be taught early and when the amounts are small: It’s pretty easy to take a dime out of a dollar. But it’s considerably harder to give away a hundred thousand dollars out of a million. You say, “Oh, if I had a million I’d have no trouble giving a hundred thousand.” I’m not so sure. A hundred thousand is a lot of money. We’d better start you early so you’ll develop the habit before the big money comes your way.

2) Capital Investment

With your next ten percent of your after-tax income you’re going to create wealth. This is money you’ll use to buy, fix, manufacture, or sell. The key is to engage in commerce, even if only on a part-time basis.

So how do you go about creating wealth with the ten percent of your income you set aside for that purpose? There are lots of ways. Let your imagination roam. Take a close look at those skills you developed at work or through your hobbies; you may be able to convert these into a profitable enterprise.

To Your Success,
Jim Rohn

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