by Jim Rohn
I believe real-life economics must be one of the most glaring omissions in our educational system. I say this because in my travels to lecture throughout the world, I constantly run into otherwise well-educated people — doctors, lawyers, top corporate personnel, even entrepreneurs – who haven’t the vaguest idea as to how to manage their finances.
So if you will indulge me, I would like to share a simple formula of how money should be allocated for the creation of wealth.
Yes, I did say taxes. I realize that the topic of taxes may seem like a strange place to begin the discussion of creating wealth. And yet throughout our lives, whether young or old, we must learn the necessity of paying taxes. And as soon as they have any money at all, our children, too, must learn that when they spend money they immediately become consumers. And all consumers of goods and services, no matter how young, must pay taxes. Why?
Because we have all agreed to live as a society, and for that society to function properly, there are some things we cannot do for ourselves alone. For example, we cannot each build a piece of the street. The machinery would be too expensive, and it would take too long to learn how to use it. So we have a government. And a government is made up of people who do things for us that we cannot or do not want to do ourselves. Because the streets, the sidewalks, the police, and the fire department must all be paid for, we’ve agreed to add some money each time we buy something and give it to the government.
We then move on to federal taxes. Here is a good way to explain federal taxes. I call it “The Care and Feeding of the Goose that Lays the Golden Eggs.” It’s so important to feed the goose — not to abuse the goose or tear off its wings — but to feed and care for it.
What’s that you say? The goose eats too much? That’s probably true. But then, don’t we all eat too much? If so, let not one appetite accuse another. If you step on the scales and you’re ten pounds too heavy, you’ve got to say, “Yes, the government and I are each about ten pounds too
heavy. Looks like we both eat too much.” No question about it. Every appetite must be disciplined — yours, mine, and the governments’. Hey, we could all go on a diet!
My mentor, Mr. Shoaff urged me early on to become a happy taxpayer. Now, I must admit it took a while, but I finally did become a happy taxpayer. Part of this transformation occurred when I began to understand the function of taxes and that it is right for everyone to pay his or her fair share.
I finally decided I didn’t mind picking up my share of the tab for defense. It’s so necessary for our safety as a country to keep the international bullies away. Some people say, “Why bother with all that expensive equipment? They won’t come over here.” Obviously, those people haven’t been reading their history books.
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