Robert Kiyosaki, ‘Rich Dad Poor Dad’ Author, Says, ‘I Am a Billionaire in Debt’ â And Calls Dave Ramsey An Idiot For Encouraging People To Live Debt-Free
Robert Kiyosaki, the author renowned for his best-selling book “Rich Dad Poor Dad,” has again captured the public’s attention with his unconventional financial strategies, this time revealing a staggering $1.2 billion in debt. The revelation follows a statement he made in September 2022 via a YouTube short, where he disclosed being $1 billion in debt at the time, accompanied by the caption, “The reason I’m so rich is because I’m in debt.”
In the YouTube video, Kiyosaki explains his financial status, saying, “If you understand history, the reason I pay no taxes is because I borrow money. I’m a debtor.”
He directly addresses his critics and those with contrasting economic ideologies, saying, “And check this out … I mean all you communists out there, check this stuff out … I am a billionaire in debt. You know why? Because I get tax breaks for borrowing money.”
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Kiyosaki’s approach to wealth and debt contrasts with more traditional financial advice. He believes that leveraging debt is a key driver of his wealth because of the tax advantages it provides.
Kiyosaki goes on to critique the common financial advice of living debt-free, as popularized by financial expert Dave Ramsey, saying, “And my friend Dave Ramsey says ‘live debt free.’ Well, you’re an idiot. I mean he’s my friend, but I say ‘Dave, I like debt.’”
He acknowledges Ramsey’s caution toward debt saying, “I know but most people can’t handle debt.” This admission highlights a critical divide in financial philosophy — while Kiyosaki sees debt as a tool for wealth accumulation, he concedes that not everyone possesses the financial acumen to manage it effectively.
Kiyosaki’s commentary extends beyond personal finance to critique the broader educational system, arguing, “But that’s why there is no financial education in schools because if you knew how to handle debt you wouldn’t save that crappy dollar you have in your hand. I’d rather borrow the money tax-free.”
Through this statement, he advocates for a more nuanced understanding of debt and finance, suggesting that conventional wisdom on saving and debt avoidance may be limiting for those looking to maximize their financial potential.
The author’s financial strategy capitalizes on the tax benefits associated with borrowing in the United States. The principle at work here is that interest payments on debt, especially when used for investment purposes, can be tax-deductible. This means that the costs of borrowing can effectively reduce the amount of taxable income an individual or entity reports, lowering their overall tax liability.
In the context of Kiyosaki’s investments, particularly in real estate, borrowing money to finance these investments allows him to deduct the interest paid on the debt from his taxable income. This deduction is a significant factor in why he says, “The reason I pay no taxes is because I borrow money.” The tax code in the United States offers provisions that incentivize investment and business activities by allowing deductions for various expenses, including interest on loans that finance productive activities.
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This article Robert Kiyosaki, ‘Rich Dad Poor Dad’ Author, Says, ‘I Am a Billionaire in Debt’ — And Calls Dave Ramsey An Idiot For Encouraging People To Live Debt-Free originally appeared on Benzinga.com
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