“I Pay No Taxes Because I Borrow Money”: Rich Dad Poor Dad Author Explains How He’s Accumulated $1.2 Billion in Debt
Robert Kiyosaki openly brags about carrying more than a billion dollars in debt and paying zero taxes, and his explanation for why that makes him wealthy rather than broke will either change how you think about money or terrify you.
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On June 1, 2026, Robert Kiyosaki appeared on the “Get Rich Education” podcast and stated plainly: “So, I’m a billion two in debt.” The author of “Rich Dad Poor Dad” (1997), which has sold more than 44 million copies worldwide, has repeated that figure publicly since at least 2024. It resurfaced dramatically when Vanity Fair published a full profile on August 26, 2026, under the headline “Poor Dad Author Goes Bust: How Robert Kiyosaki Went Into Debt, to the Tune of $1.2 Billion.” A New York Post report followed on September 1, 2026. The core of Kiyosaki’s argument traces back to one widely shared line: “If you understand history, the reason I pay no taxes is because I borrow money. I’m a debtor.”
The $1.2 billion figure demands immediate context. Kim Kiyosaki, his ex-wife and longtime business partner, told Vanity Fair that the number is widely misunderstood. The debt is held collectively by a group of real estate investors and partners tied to a portfolio of roughly 1,500 apartment units. “We have a lot of apartment houses with our partners,” she said. “So technically, yes, we have all this debt,” but she was clear that it is attached to real assets. Vanity Fair estimated Kiyosaki’s personal share at somewhere between $30 million and $60 million, based on his own stated annual income of about $3 million.
How “Buy, Borrow, Die” Works
The strategy Kiyosaki describes is legal and rests on specific provisions in the U.S. tax code:
- Buy income-producing real estate. Rental properties, apartment buildings, or similar cash-flowing assets.
- Let the property appreciate, then refinance. As the property gains value, the owner refinances and pulls the increased equity out as a new loan.
- Loan proceeds are not income. Borrowing against an asset rather than selling it does not trigger capital gains tax under current law.
- Rent covers the note. Rental income pays the mortgage and interest. The investor can claim depreciation deductions and mortgage interest deductions, reducing taxable income further.
- Repeat. As long as properties keep appreciating, the cycle continues.
Kiyosaki traces his study of this approach back half a century. “I studied it since 1974… If you’re going to learn to use debt, you’d better take some education,” he told the Get Rich Education podcast. His ownership structure is equally deliberate. Each investment sits inside a separate LLC, creating what he calls firewalls: “Firewalls, that’s the way the rich play the game.” The design means that a default or legal problem in one entity stays contained there and does not ripple through to the others.
The Skeptic’s Case Against $1.2 Billion in Debt
John Poole, founder of Arizona consulting firm JPTD Partners, told the New York Post: “There’s good debt and there’s bad debt, and then there’s $1.2 billion of debt, which you better know exactly what in the world you’re doing… Leverage works beautifully on the way up, and if it’s not continuing on that way up, then it’s like a chainsaw financially coming down.” Poole added that what Kiyosaki calls “Rich Dad debt” could become “Poor Dad bankruptcy” for an ordinary investor who tries to replicate the approach without the same infrastructure and experience.
A real precedent worth examining here: Rich Global LLC, the company that licensed the “Rich Dad Education” brand, filed for Chapter 7 bankruptcy in August 2012 after a federal court entered a judgment of $23.7 million against it in favor of Learning Annex. At the time of filing, Rich Global listed only about $1.8 million in assets against more than $25 million in liabilities. Federal bankruptcy records make clear that Rich Global LLC was the debtor, not Kiyosaki personally, and his other business operations continued outside that entity.
Ramsey’s Opposing Philosophy
Kiyosaki’s worldview sits in direct opposition to Dave Ramsey’s. Ramsey’s position is absolute: “If the only way I can do X or Y or Z is if I have to borrow money, I can’t do it. I don’t have enough money.” He frequently anchors this view in Proverbs 22:7: “The borrower is slave to the lender.”
Kiyosaki has been openly dismissive of that framework, at one point calling Ramsey “an idiot” over their divergent views on debt. Ramsey wants every dollar of debt eliminated as quickly as possible. Kiyosaki treats debt against income-producing assets as the primary engine of wealth creation. The two camps have debated this publicly for years, and neither shows any sign of softening. Readers can find our earlier take at “I Don’t Agree with Robert Kiyosaki on Everything, But He Nails These 6 Points About Wealth.”
What to Take From It
The mechanics Kiyosaki describes are real, legal, and used routinely across the real estate industry. They depend on continued property appreciation, reliable rental income, and disciplined entity structuring. When any of those inputs deteriorates, the same leverage that compounded gains on the way up compounds losses on the way down. Kiyosaki, at 79 years old, is comfortable carrying that risk. Whether any individual reader should be comfortable with it is a question the specific numbers of their own portfolio must answer.
Editor’s note: This update adds Vanity Fair’s August 26, 2026 publication date and its full headline, sharpens the Learning Annex bankruptcy judgment from “more than $23 million” to the court-confirmed $23.7 million, and incorporates Kiyosaki’s stated annual income of approximately $3 million as reported in the Vanity Fair profile.
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AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
