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Robert Kiyosaki, author of the 1997 bestseller "Rich Dad, Poor Dad," often says his $1.2 billion debt is part of a wealth-building strategy, and his philosophy rejects the "live below your means" advice common in personal finance. Kiyosaki's book famously proclaimed that the rich don't work for money, savers are "losers," and your house is not an asset.
"I teach people how to use debt, and Dave Ramsey says don't use debt. Most people should listen to Dave Ramsey," Kiyosaki said in June on the "Get Rich Education" podcast.
His "Rich Dad" strategy advocates using debt to expand income by acquiring cash-producing investments. Kiyosaki's ex-wife and longtime business partner, Kim Kiyosaki, told Vanity Fair that the $1.2 billion isn't money Robert personally owes. Instead, it represents debt held by a group of real estate investors on a portfolio that includes roughly 1,500 apartment units. The partners hold the debt in a legal arrangement that removes most of their personal responsibility, she told the magazine.
Critics warn of the dangers of taking on heavy debt, while Kiyosaki advocates using leverage to acquire cash-producing assets. Can his approach still work today for investors seeking income-producing investments?