Author Robert Kiyosaki, best known for his best-selling book “Rich Dad, Poor Dad,'' has once again garnered public attention for his unconventional financial strategies, this time revealing a staggering $1.2 billion in debt. This revelation follows a statement he made in a YouTube short video in September 2022, in which he revealed that he was $1 billion in debt at the time, saying, “The reason I'm so rich is because I have debt.” A caption was attached.
In a YouTube video, Kiyosaki explains his financial situation: “If you understand history, the reason I don't pay taxes is because I'm in debt. I'm a debtor.”
He speaks directly to his critics and those with contrasting economic ideologies, saying: you know why? This is because when you borrow money, you get a tax break. ”
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Kiyosaki's approach to wealth and debt stands in contrast to more traditional financial advice. He believes that leveraging debt is an important driver of wealth because it provides tax benefits.
Kiyosaki went on to criticize the popular financial advice of living debt-free, popularized by financial expert Dave Ramsey, saying, “And my friend Dave Ramsey says, 'Living debt-free.' “There is,” he said. Well, you're an idiot. I mean, he's my friend, but I say, “Dave, I like debt.”
He acknowledged that Mr Ramsey is cautious about debt, saying: “I know, but most people can't deal with debt.” This confession highlights a significant gap in financial philosophy. While Kiyosaki views debt as a means to accumulate wealth, he also acknowledges that not everyone has the financial acumen to manage debt effectively.
Kiyosaki's commentary extends beyond personal finance to a broader critique of the education system, saying, “But that's why we don't have financial education in schools. Because I can't save the crappy money I have. I'd rather borrow money tax-free.”
Through this statement, he advocates for a more nuanced understanding of debt and finance, and acknowledges that conventional wisdom about saving and debt avoidance can be limiting for those seeking to maximize their financial potential. It suggests that there is.
The author's financial strategy takes advantage of the tax benefits associated with borrowing in the United States. The principle at work here is that interest payments on debt can be tax deductible, especially when used for investment purposes. This means that the cost of borrowing effectively reduces the amount of taxable income that a person or business declares, reducing their overall tax liability.
In the context of Kiyosaki investments, particularly real estate investments, borrowing money to finance these investments allows you to deduct the interest paid on that debt from your taxable income. This deduction is an important factor when he says, “The reason I don't pay taxes is because I borrow money.'' The U.S. tax code provides provisions to encourage investment and business activity by allowing deductions for various expenses, including interest on loans that finance production activities.
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In this article, Robert Kiyosaki, author of “Rich Dad, Poor Dad,” says, “I'm a billionaire with debt,” and calls Dave Ramsey, who encourages people to live debt-free, a fool. This is the article that was first published.
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