Kiyosaki's $1.2 Billion Debt Tied to Real Estate, Not Bitcoin

Robert Kiyosaki, the writer behind 'Rich Dad Poor Dad,' has stated that he is $1.2 billion in debt. However, that borrowing is tied to apartment complexes, not to the Bitcoin (BTC) and gold he advocates for his large audience.

Kim Kiyosaki, his ex-wife and former business partner, clarified that the total includes debt shared with partners across about 1,500 rental units. According to her, his personal liability is much smaller than the headline number suggests.

The $1.2 Billion Represents a Partnership Total

Throughout the summer, Kiyosaki has mentioned this figure repeatedly, most recently during an appearance on the 'Get Rich Education' podcast.

“So, I’m a billion two in debt,” the New York reported, citing Kiyosaki.

Vanity Fair, which the Post relied on for its profile, estimated Kiyosaki's personal portion to be around $30 million to $60 million. This was derived from his stated annual income of roughly $3 million. That amount is a small part of the $1.2 billion he publicizes.

This is standard practice in multifamily real estate. As a property gains value, the owners refinance, taking out cash that is not taxed since no sale occurred. Each investment is structured within a separate limited liability company (LLC), preventing issues at one building from affecting others.

Some see risk in this approach. John Poole, who heads the Scottsdale-based consulting firm JPTD Partners, explained to the Post that leverage acts differently when property values cease to rise.

“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,” the Post added, citing John Poole of JPTD Partners.

Bitcoin and Gold Remain Separate

The debt revelation creates a contradiction, as Kiyosaki frequently advises his audience to invest in gold and Bitcoin instead of dollars. In July, he listed Bitcoin and Ethereum, along with gold, as his personal hedge against what he describes as fake currency.

His cryptocurrency and gold holdings are not used as collateral. Bitcoin (BTC), currently trading around $77,425 after a 1.8% daily decline, does not back any of the loans mentioned in the reports. The mortgages are secured by physical properties and rental income.

This creates a tension he seldom discusses. He cautions that easy credit could collapse the financial system, with US national debt approaching $40 trillion, yet his own portfolio relies on that credit remaining accessible.

Past events lend some credibility to the warning. In 2012, one of his firms, Rich Global LLC, filed for Chapter 7 bankruptcy following an adverse judgment, as reported by ABC News.

The refinancing strategy continues to function as long as rental income covers loan payments and lenders remain willing to provide credit. The question is whether Kiyosaki's followers grasp which part of his advice carries the real risk.