‘Rich Dad Poor Dad’ Has $1.2 Billion in Debt. His Strategy is to Borrow More.

Robert Kiyosaki, author of the personal finance book “Rich Dad Poor Dad,” says he has accumulated about $1.2 billion in debt through his real estate investments, although his former wife and business partner says the figure does not represent money he personally owes.

“So, I’m a billion two in debt,” Kiyosaki said on the “Get Rich Education” podcast over the summer.

Kiyosaki, 79, has frequently cited the figure while promoting his investment philosophy, which emphasizes borrowing money to acquire income-producing assets.

He added that people “[s]hould not do what I do, right?”

“But I studied it since 1974… If you’re going to learn to use debt, you’d better take some education.”

Kim Kiyosaki, his former wife and business partner, told Vanity Fair that the $1.2 billion figure has been widely misunderstood and does not represent debt owed solely by Kiyosaki.

“We have a lot of apartment houses with our partners,” Kim told the magazine, saying their portfolio includes about 1,500 units.

“So technically, yes, we have all this debt,” she said, adding that the borrowing is tied to the properties and that Kiyosaki’s personal share is relatively small.

Kiyosaki’s investment strategy involves borrowing against properties as their value rises. Vanity Fair reported that he uses the increased equity to obtain additional loans, treating the proceeds as tax-free income.

He also places individual investments into separate limited liability companies, a structure that can help isolate liabilities between properties, the magazine reported.

“If it all comes to hell, you can talk to my attorney,” Robert Kiyosaki told Vanity Fair.

“Firewalls — that’s the way the rich play the game.”

Vanity Fair estimated Kiyosaki’s share of the debt could be between $30 million and $60 million if his claim that he generates about $3 million a year is accurate.

“He loves to say things that shock,” Kim told the magazine, referring to Kiyosaki’s use of the $1.2 billion figure to attract attention before explaining “why investment debt is good.”

David A. Perez, an enrolled agent and founder of Tax Maverick AI who said he uses a similar strategy as a multifamily real estate investor, described Kiyosaki’s approach as “a great strategy” and said large amounts of property-backed debt are “actually very normal.”

Perez said borrowing against a property’s equity generally results in a tax-free loan because the property has not been sold. He added that additional borrowing can increase mortgage payments and interest costs while reducing cash flow.

John Poole, founder of Scottsdale, Arizona-based consultancy JPTD Partners, said investors should be cautious when taking on large amounts of debt.

“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 said.

“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.”

Poole said borrowing against appreciated assets can make sense in some circumstances, including estate planning, but cautioned against relying on the strategy indefinitely.

“It doesn’t go on forever. There has to be a payday, and be prepared for that payday, irrespective of the size,” Poole added.

“[Kiyosaki] may call this the ‘Rich Dad debt,’ but for the average investor, it could turn out to be ‘Poor Dad bankruptcy’ really quickly.”

“Rich Dad Poor Dad,” first self-published in 1997, has sold more than 44 million copies, according to Vanity Fair.

The book contrasts the financial lessons Kiyosaki says he learned from his biological father, whom he calls “Poor Dad,” with those taught by the father of his childhood best friend, whom he identifies as “Rich Dad.”

Kiyosaki’s biological father, Ralph Kiyosaki, was Hawaii’s state superintendent of education and unsuccessfully ran for lieutenant governor in 1970.

Kiyosaki later identified his “Rich Dad” as Richard Kimi, a Hawaii businessman who owned a chain of hotels that once included the Waikiki Biltmore Hotel.

Kiyosaki has built a financial education business around the book and has long advocated investing in cash-generating assets such as real estate while minimizing taxes and distinguishing between debt used to acquire investments and borrowing used to finance expenses.

Kiyosaki has co-authored two books with U.S. President Donald Trump, including “Why We Want You to Be Rich,” published in 2006.

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