Why Robert Kiyosaki Says He Is in Debt
Robert Kiyosaki, author of Rich Dad Poor Dad, often says that he is about $1.2 billion in debt, and that he took it on deliberately. He explains that the money was borrowed to buy income-producing real estate, mainly apartment buildings, and that rents pay the loans. His wife and business partner, Kim Kiyosaki, has said that the debt is spread across properties owned together with other investors, not owed by him alone.
Separately, in 2012 one of his companies, Rich Global LLC, filed for bankruptcy after a court judgment. That was a company bankruptcy, not a personal one.
| Question | Answer |
|---|---|
| How much debt does he mention? | About $1.2 billion |
| What is it for? | Real estate, mainly apartment complexes |
| Is it all his personally? | No, it is shared with investment partners |
| Why does he take on debt? | He calls it good debt that buys assets |
| Rich Global LLC | His company filed for bankruptcy in 2012 |
| Was Kiyosaki personally bankrupt? | No, only that company |
Why does Kiyosaki say he has $1.2 billion in debt?
In interviews and on his radio show, Kiyosaki repeatedly says he owes around $1.2 billion and wants more. He presents this as proof of his philosophy, not a confession: he borrows from banks to buy property that produces cash flow, and the rent from tenants covers the loan payments. Kim Kiyosaki has explained that the figure relates to roughly 1,500 apartment units owned with investors, so his own share is smaller.
↑ Back to the topWhat does Kiyosaki mean by good debt?
In his books Kiyosaki divides debt into good and bad. Bad debt pays for things that take money out of your pocket, like an expensive car or consumer purchases. Good debt pays for assets that put money into your pocket, such as rental property. He also argues that real estate investors benefit from tax rules, such as deductions for depreciation and interest. He often warns that this strategy requires financial education and is not something beginners should copy without knowing exactly what they are doing.
↑ Back to the topWhat happened with Rich Global LLC?
In 2012 a New York court ordered Rich Global LLC, a company in Kiyosaki's business group, to pay about $23.7 million to the Learning Annex, a seminar company, in a dispute over profits from speaking events. Rich Global then filed for Chapter 7 bankruptcy. Kiyosaki himself did not go bankrupt, and he continued doing business through his other companies, including the Rich Dad Company.
↑ Back to the topHow does this relate to Rich Dad Poor Dad?
Rich Dad Poor Dad argues that the rich buy assets while the middle class buys liabilities it thinks are assets, and that money can be made to work for you. Kiyosaki's talk about debt is a direct, if extreme, application of that lesson. Readers often search for his debt because it seems surprising for a money expert, but in his view borrowing to buy assets is exactly what the book teaches.
↑ Back to the topMore about Rich Dad Poor Dad
Written by Tori Books for readers and students.