Japanese-American businessman and author, known for his book the Rich Dad Poor Dad, Robert Kiyosaki has admitted that he is more than US$1 billion in debt and does not think that’s a bad thing as he explains his unconventional approach to managing debt and wealth.
According to Moguldom, Kiyosaki, 76, boldly stated, “I use debt as money, and I don’t save cash because in 1971, the dollar became debt,” in a Nov. 30 Instagram reel.
This perspective challenges conventional financial wisdom, where most people aim to minimize debt and build up savings. But for Kiyosaki, debt serves as a tool to acquire assets like gold, which can survive economic downturns and inflation, unlike cash stored in traditional banks. He asserts that if he were to go bankrupt, the burden would fall on the banks, not him. “If I go bust, the bank goes bust,” he added of his $1 billion debt. “Not my problem.”
According to the author, living debt-free is outdated advice and doesn’t work in today’s economic landscape. He points out factors like substantial government spending, rising oil prices, and a looming banking crisis as reasons to avoid hoarding cash, Fortune reported. To safeguard his wealth, Kiyosaki invests in real assets like Bitcoin, silver, Wagyu cattle, and gold, prioritizing them over fiat currency, which he often refers to as “trash.” He also said he has a lack of trust in the U.S. dollar.
“I use debt as money, and I don’t save cash because in 1971, the dollar became debt,” he said in the IG video, referring when President Richard Nixon ended the convertibility of the U.S. dollar into gold and devalued the currency and ultimately, led to the rise of cryptocurrencies, Fortune reported. He claims he buys oil wells instead of oil stock, saves gold and silver coinage, and keeps it banked outside the United States.
“Our banks are crashing,” he further explained during an interview on the Disruptors podcast, adding that it results in banks being unable to lend out money, causing the economy to crash. “So the people who will win are people who have gold and silver.” Kiyosaki stressed that not all debt is not good debt; there is bad debt. While he advocates leveraging debt to acquire income-generating assets, he does not believe in acquiring materialistic items that do not appreciate in value or provide returns, Complex reported.
“A lot of people use debt to buy liabilities,” he said. “I drive a Ferrari. Guess what? It’s paid off 100% because it’s a liability. I drive a Rolls-Royce. It’s paid off 100% because it’s a liability.” While living debt-free is a pipe dream for many, it’s “the worst advice you could give anybody today,” Kiyosaki insisted in another Instagram reel. Living debt-free, he said, is “the worst advice you could give.” For Kiyosaki, his $1 billion debt is “good” debt.