Rich Dad, Poor Dad author Robert Kiyosaki has recently shared a unique take on debt, and investment, one that encompasses assets and liabilities. The best selling author took to social media platform Instagram, and said that he uses debt to pay assets.
Elaborating further, Kiyosaki said that luxury vehicles that he owns– A Ferrari, and a Rolls Royce– are fully paid off, and therefore qualify as liability, and not asset.
In the reel, Kiyosaki voiced doubt about the act of saving cash, pointing to the US dollar’s detachment from the gold standard during President Richard Nixon‘s tenure in 1971.
Rather than saving cash, Kiyosaki opts to store gold and convert his earnings into silver and gold.
Kiyosaki credits this strategy for amassing a debt of $1.2 billion, an amount he openly acknowledges. He says he is in debt because “if I go bust, the bank goes bust. Not my problem.”
Elaborating further on the reason behind the debt, Kiyosaki said that the money had been used to buy assets. Instead of saving cash, Kiyosaki saved gold and converted his earnings into gold and silver. This strategy, according to him, led to the accumulation of such a large debt.
Kiyosaki on Good Debt, Bad Debt
Of this good debt is that which helps build wealth, such as loans used for acquiring income-generating assets like real estate, businesses or investments.
Kiyosaki advocated using debt as leverage in investments, especially in real estate, and saw it as an efficient way to tackle market fluctuations.
Kiyosaki on Gold, Silver, Real Estate, Wagyu cattle
“I don’t own any copper. I own a lot of silver. I found a silver mine in Argentina and Yamana Gold (Canadian mining company) bought it from me. I do own tons of gold and silver,” Kiyosaki had said in an interview with Stockpulse at Vancouver Resource Investment Conference in 2022.
Kiyosaki has always talked in favour of “real assets” like Bitcoin, silver, gold, and Wagyu cattle. Bitcoin, in particular, is a favorite of his, perceived as a hedge against the deteriorating value of the US dollar.
Kiyosaki views gold as more stable and reliable than cash, which he calls “trash” because he just doesn’t “trust the frickin’ dollar.”
Silver, too, forms a significant part of his investment strategy. He views it as a long-term investment, particularly because of its increasing rarity and relatively lower price compared to gold.
Real estate remains a cornerstone of his investments, valued for its dual benefits of rental income, and capital appreciation.
The most unconventional of his investments is in Wagyu cattle. This investment of the best-selling author only mirrors his belief beyond traditional investments.
Robert Kiyosaki’s “Rich Dad, Poor Dad” released in 1997 and has sold over 40 million copies. In the book, Kiyosaki disputed the notion that earning big was the only route to wealth generation and vouched for the advantages of calculated risk taking and entrepreneurship.
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Published: 04 Jan 2024, 06:41 PM IST