Robert Kiyosaki says his massive debt is part of his wealth strategy. Photo / Getty Images
For decades, millions have followed the personal finance advice Robert Kiyosaki penned in his bestseller Rich Dad Poor Dad, believing it would lead them to wealth.
Now, the personal finance self-help guru has claimed he is US$1.2 billion ($2.04 billion) in debt.
Kiyosaki, 79, amassed the debt through
real estate investments.
In a June interview with the Get Rich Education podcast, the personal finance guru argued his massive debt is part of his wider wealthy strategy, and people should learn how to use debt to their advantage.
“So, I’m a billion two in debt,” he said. He added that people “should 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.”
In a recent interview with Vanity Fair, his ex-wife and business partner Kim Kiyosaki said the debt figure has been misunderstood.
She explained that the total debt amount is held by a group of real estate partners.
“We have a lot of apartment houses with our partners,” she told the magazine.
“So technically, yes, we have all this debt,” but she said it’s attached to the assets and Kiyosaki’s personal share is, according to his ex-wife, small.
Kiyosaki told Vanity Fair he has an annual income of about $3 million.
According to his ex-wife and business partner, “he loves to say things that shock” and knew the number would turn heads. His philosophy is that your debt amount is irrelevant as long as banks remain willing to lend you money.
According to the Vanity Fair profile, the massive debt is strategic: as the value of his properties increase, Kiyosaki borrows more money against the increased equity and then treats the loan proceeds as tax-free income.
He also explained that he puts individual investments into separate limited liability companies (LLCs), which keeps them separate from one another and insulated in case one gets in trouble.
