The $1.2 Billion Debt Revelation
Robert Kiyosaki, the author of the bestselling personal finance book "Rich Dad, Poor Dad," has said he is $1.2 billion in debt, a figure that has drawn widespread attention. The disclosure came in an interview with Vanity Fair, as reported by the NZ Herald. The debt is linked to his real-estate investments, according to the New York Post, as cited by today.
Kiyosaki's ex-wife and business partner, Kim Kiyosaki, told Vanity Fair that the debt figure has been misunderstood. She explained that the total debt is held by a group of real estate partners. "We have a lot of apartment houses with our partners," she told the magazine, adding that the debt is attached to assets and that Kiyosaki's personal share is small. Vanity Fair estimated his personal portion could be between $30 million and $60 million.
The debt is largely associated with a real-estate portfolio of roughly 1,500 apartment units, Kim Kiyosaki said. She also noted that Kiyosaki "loves to say things that shock" and knew the $1.2 billion number would turn heads.
Strategic Debt or Risky Leverage?
According to the Vanity Fair profile, Kiyosaki's debt is strategic: as the value of his properties increases, he borrows against the increased equity and treats the loan proceeds as tax-free income. He also told the magazine that he puts individual investments into separate limited liability companies (LLCs) to keep them insulated from one another. "Firewalls – that's the way the rich play the game," he said.
Kiyosaki's philosophy, as his ex-wife described it, is that debt is irrelevant as long as banks are willing to lend money. He told Vanity Fair he has an annual income of about $3 million. This approach to debt is not without its critics. John Poole, founder of consulting company JPTD Partners in Arizona, told the New York Post: "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." Poole warned that "leverage works beautifully on the way up, and if it's not continuing on that way up, then it's like a chainsaw financially coming down," adding that eventually there will always be a payday and people need to be prepared for it. He cautioned that for the average investor, such debt could turn into financial disaster.
Kiyosaki and Bitcoin
Kiyosaki, who co-authored two books with Donald Trump—"Why We Want You to Be Rich" and "Midas Touch"—has been a vocal proponent of Bitcoin. In June 2024, he said Bitcoin could reach $350,000 by Aug. 25, a prediction he later clarified was not guaranteed. He continued to set ambitious targets for 2025, initially calling for $350,000 and later setting a range of $175,000 to $350,000. He has also predicted that Bitcoin would eventually surpass $1 million.
Despite his optimistic outlook on Bitcoin, Kiyosaki's own financial strategy involves significant leverage. As one report noted, he is "one of crypto's loudest bulls" while operating a highly leveraged investment empire.
Background
"Rich Dad, Poor Dad," first published in 1997, has sold more than 44 million copies worldwide, making Kiyosaki one of the most influential personal finance authors. His teachings on debt and investing have inspired many, but also drawn scrutiny from financial experts who caution against high leverage for average investors.