A report claims that Robert Kiyosaki, the author of “Rich Dad Poor Dad,” has accumulated wealth through his book and financial education business, but he is burdened with around $1.2 billion in debt from his real estate investments.
The 79-year-old Kiyosaki has repeatedly mentioned this staggering figure and insists that borrowing money to buy income-generating assets is a common strategy among the wealthy.
According to the New York Post, Kiyosaki recently revealed on the “Get Rich Education” podcast that he is “carrying $1.2 billion of debt” and cautioned against others emulating his approach. He emphasized that he has been studying the use of debt since 1974 and stressed that acquiring knowledge in leveraging debt for investments is essential.
However, subsequent reports from Vanity Fair pointed out that the $1.2 billion debt is not solely Kiyosaki’s personal liability. His ex-wife and longtime business partner, Kim Kiyosaki, explained in an interview with the magazine that this debt corresponds to the total debt of a real estate investment portfolio of approximately 1,500 apartments held jointly with multiple partners, with Kiyosaki’s actual share being relatively limited.
Kiyosaki’s substantial debt load ties back to his consistent investment strategy. Reports indicate that his method involves leveraging the appreciation of his real estate holdings to secure new loans using the increased value as collateral, then funneling the funds into new income-producing assets, allowing him to continue accessing investment capital without selling properties. He also establishes a separate limited liability company (LLC) for each investment to safeguard other assets in case of issues with one investment.
Industry experts caution against such a high leverage strategy. John Poole, founder of real estate acquisition consultancy JPTD Partners, warned the New York Post that leveraging can yield significant benefits when asset prices are rising but can lead to severe financial repercussions once the upward momentum stalls.
It is worth noting that Kiyosaki’s businesses have previously faced debt disputes. According to public bankruptcy court records in Wyoming, Rich Global, LLC, a company jointly owned by Kiyosaki and his ex-wife, was ordered by the Southern District of New York Federal Court on July 17, 2012, to pay $23,687,957.21 in damages in a lawsuit with the “Learning Annex” educational institution. The company subsequently filed for Chapter 7 bankruptcy protection on August 20 of the same year. Court documents also reveal that the Kiyosakis owed an additional $1,783,358.12 to Rich Global apart from the reported $1.2 billion real estate debt, indicating that the two debts should not be conflated.
Kiyosaki’s book “Rich Dad Poor Dad,” published in 1997, has sold over 44 million copies worldwide. In recent years, he has frequently advised investors to consider assets such as real estate, gold, silver, and bitcoin.