Rich Dad Poor Dad Author Robert Kiyosaki 1 2 Billion Debt Explained

Rich Dad Poor Dad author Robert Kiyosaki has said he is carrying about $1.2 billion in debt, a figure he says is tied to the real-estate investments that form a major part of his wealth-building strategy. The 79-year-old financial author has often spoken about using debt to acquire income-generating assets, arguing that this is one way wealthy investors build their fortunes. He recently repeated the eye-catching figure while appearing on the “Get Rich Education” podcast. “So, I’m a billion two in debt,” Kiyosaki said on the podcast. He then cautioned listeners against blindly copying his approach. “But I studied it since 1974… If you’re going to learn to use debt, you’d better take some education,” he added. ‘He loves to say things that shock’ However, Kiyosaki’s ex-wife and business partner, Kim Kiyosaki, has offered important context around the $1.2 billion figure. Speaking to Vanity Fair, she said the amount should not be interpreted as debt that Robert personally owes. The pair are involved in a portfolio of apartment properties with business partners, which Kim estimated at around 1,500 units. “We have a lot of apartment houses with our partners. So technically, yes, we have all this debt,” she said, explaining that the loans are connected to the properties and that Robert’s personal portion is considerably smaller. According to Vanity Fair, Robert’s strategy involves borrowing against properties as their value increases. Instead of selling those assets, he can access the increased equity through additional loans, with the borrowed money generally treated differently from taxable income. His investments are also held through separate limited liability companies, creating separation between different properties and businesses, the magazine reported. “If it all comes to hell, you can talk to my attorney,” Robert told Vanity Fair. Vanity Fair estimated that Kiyosaki's own share of the debt could be somewhere between $30 million and $60 million, assuming his claim that he earns about $3 million annually is accurate. Kim also suggested that the headline-grabbing $1.2 billion figure is partly a way for Robert to draw attention to his argument about investment debt. “He loves to say things that shock,” she told the magazine, adding that Robert uses the billion-dollar figure to get people's attention before explaining “why investment debt is good.” Good debt Bad debt David A Perez, an enrolled agent and founder of Tax Maverick AI, said he follows a similar approach as a multifamily real-estate investor and described the strategy as “a great strategy.” He told the New York Post that having substantial property-backed debt is “actually very normal” among real-estate investors. Perez explained that borrowing against a property's equity can generally provide access to cash without creating a taxable event because the asset itself has not been sold. However, taking on more debt also means higher mortgage payments and interest expenses, which can put pressure on cash flow. John Poole, founder of Scottsdale, Arizona-based consultancy JPTD Partners, was more cautious about the risks involved. “I think there’s good debt and there’s bad debt, and then there’s $1.2 billion of debt, which you better know exactly what in the world you’re doing,” he told the Post. “Kiyosaki may call this the ‘Rich Dad debt,’ but for the average investor, it could turn out to be ‘Poor Dad bankruptcy’ really quickly.” Kiyosaki has spent decades building a financial-education business around Rich Dad Poor Dad, the book he first self-published in 1997. According to Vanity Fair, it has sold more than 44 million copies worldwide.