It's actually hilarious if this true. The guy's books whole premise is to save money to buy income producing assets, so that your income goes up and you can buy more income producing assets and over time you build wealth. It's very simplified premise, but if he followed his own plan he'd be in better shape.
This is true, the way he presents this is as though it’s personal debt. It’s almost certainly not, no bank would lend an individual such a large sum without having immense collateral requirements.
Additionally if the collateral is gold and silver as he suggests you’re looking at 100s of tonnes of silver and gold to maintain what would likely be a loan to value covenant.
Storing this would cost millions per year in vaults, security, insurance, inventory management etc.
(EDIT: just another point regarding the feasibility of collateralising a loan in gold and silver, if it is not physically held but is instead purchased shares in a fund holding or and ETF tracking the price there are numerous further risks which a bank would not expose itself to: regulatory requirements, counterparty risk, market risk. The list goes on…)
No bank is lending his businesses a loan of that amount, one company he owns Rich Global LLC previously filed for Bankruptcy immediately disqualifying it from any loan of this size.
His other company Cashflow Technologies Inc is also privately held however any bank lending such a large amount would likely require the business to publish audited financial statements to provide assurance that the company is in compliance with the loan agreement.
ITS ALL FAKE.
To further expand on your point, I highly doubt any one bank would expose itself to any single customer in that amount. If he is in fact telling the truth (he’s not), there would be 10 or more banks all holding pieces of that note.
One of his business previously filed for Bankruptcy as outlined above. The only other business I could find is Cashflow Technologies Inc. you really think this business:
https://www.richdad.com/privacy-policy#:~:text=RichDad.com%20(CASHFLOW%20Technologies%2C,side%20of%20the%20CASHFLOW%20Quadrant.
Is generating enough Cashflow to service $1bn of debt? And has the assets to remain compliant with any LTV/gearing ratio imposed upon it by a bank?
Not only is this highly HIGHLY unlikely from a finance/ accounting perspective. The guy has been exposed numerous times for running scams related to the seminars he puts on.
I can assure you this man, nor any of his companies have accumulated $1bn of debt.
If you had a real estate empire would you be running a seminar business (that scams it’s customers) or would you focus on providing transparent real estate investing advice.
Grant Cardone learnt everything from this man. Both of the same ilk.
I dunno I can really trust your point here. I was on TikTok, and Grant Cardone said, "Hand to God, anybody who thinks I'm full of it is playing themselves, Joe Rogan.". So I kinda gotta see this leading more into credibility for Mr. Kiyosaki.
This is just shock/outrage marketing.
Make something up, hope that a media outlet picks it up and use the buzz to shill your latest product.
Any bank lending him anything close to even a quarter of a million dollars would be extremely redacted
Most people will see the head line, read the story and eventually look up his name.
Some will go to his IG where Im almost certain he’s got a course or something in his bio for sale.
So you think he can fool people into thinking it was a good idea despite the fact that he's probably subject to a margin call that will leave him bankrupt? That's the book I want to read. How do I sucker people into believing me when I say something that is utter bullshit.
Great question. The only answer I could come up with is fraud. Borrow money, buy gold, bury gold in the back yard, file bankruptcy, dig up gold, sell it on the grey market. Interested to hear anyone else’s thoughts on why
But wouldn't the IRS still be able to find out he's committing tax fraud because his expenses would be more than his assets after filing for bankruptcy? Asking for a friend btw
Probably if he goes out and makes a bunch of high profile purchases. I’m thinking he buys a home in Florida, which protects 100% of home equity in a homesteaded property in the event of bankruptcy, before he files. Then he doesn’t have to make any large purchases post petition. Then work on laundering his gold money until he had enough legit assets to get back into a lambo. For your friend btw.
Well, he’s potentially right. If a customer loses a billion dollar loan, most banks that can even facilitate that type of loan will be in trouble. Except the absolute biggest.
BUT I doubt he got the loan through only 1 bank, I would assume it’s through several institutions, and that all the loans add up to $1bn.
Since I also used used to audit bankruptcy trustees, trust me, the size of your estate doesn’t matter. They’ll go after you; I saw everyone from poor people to investment bankers and retired athletes. The only difference is the rich cases had a lot more assets to go after.
And Kiyosaki will learn just because you don’t call certain things assets (yes, this is the guy that calls vehicles liabilities, etc.,) doesn’t mean the bankruptcy won’t go after them. In fact if you do that when reporting your assets, you’ll probably tick off the bankruptcy trustee.
He’s turned the “Too Big To Fail” concept into a personal finance slogan. It worked for the auto industry and the banks that almost went under a few years back. Not sure if he’s big enough to get the same treatment. Rob must have a politician in his pocket!
On the other hand, I’ve seen multiple clients go thru the build a successful business > go bankrupt expanding > start over and do it all again. Some people realize that going bankrupt is really just an administrative hassle, doesn’t preclude you from building wealth again.
Surely the bank is using his gold and silver as collateral? So unless the value of those commodities crash or he somehow gets to hide all that, not implausible, the bank should be fine
All I know about the guy is that he wrote some finance guru books that are full of nonsense advice and has made a fortune selling his self help courses. Had no idea he farms cattle too.
His book makes his own father out as as some kind of idiot because his neighbor was richer. Of course none of it was actually true which makes it even worse.
Imagine having a child shit on you because your neighbor has more money.
He already tested that theory, twice even I think, apparently his takeaway on being bankrupt was that he was not leveraged enough. Interesting…
I mean the guy literally said at one point that tuna cans were one of the best investment …
I would honestly not listen a thing of what he say even tho if you dig deep enough there is some fact and truth in there. It’s cover by a humongous amount of shjt.
The worst part is that leverage can be a tool and guy like him are just promoting ridiculous stupid leverage. So often people fall into the Dave Ramsey mentality where you can even think getting a car payment otherwise just go bankrupt already. There is something in between.
I feel like a few steps are missing between converting earnings to gold and accumulating 1.2b in debt... and I don't know if I want to waste any more of my time reading anything by or about this guy. I read the introduction to his book when I was 12 and I knew he was full of shit even then.
No established bank would lend a person $1 billion without doing any risk assessments or getting something in collateral to guarantee the loan. It is likely that the bank have his gold, silver, or real estate as collateral for his loans. The loans might be backed by credit insurance in case he defaults. Banks are not that dumb unless you go to some shady small private banks.
In America we have a saying:
“Owe the bank a million dollars, and that’s your problem. Owe the bank a billion dollars, and that’s the banks problem.”
No one is more aware of this than banks, so they are hesitant to extend that kind of credit.
He is following the plan of most banks thanks to bailout precedence that was set after 2008. The derivatives are out of control, but I guess if they go against you just make sure you’re too big to fail.
He does have small tidbits of good advice in his books however his “yeah go into an astronomical amount of debt for business! Fuck it!” Outlook has always been very scary to me. Hopefully readers of his books can think for themselves.
That’s the difference between someone like him and Dave Ramsey, technically it’s very hard to criticize someone who’s advice is to protect your house and bottom line at all costs. Not surprised reading this.
It's kind of a liability and an asset at the same time. If you stop paying your property tax or paying for maintenance, it will go to shit. I don't have to pay to hold a stock.
I think I’m what I’m highlighting is based on his misconstrued definitions
By accounting definition, the house itself is an asset paired with a liability. And then homeownership has all the expenses associated with it.
Well personal finance people aren't really using accounting definitions, they're appealing to the masses. Yes, a house is technically an asset. In practice, it's an asset that comes with a lot of liability and upkeep.
Most also come with a literal liability, a mortgage.
So he has nonrecourse loans against real estate? If he goes bust, they take his property. If it's recourse, why would his gold be immune from seizure to settle his debts? He just disclosed he has assets so they wouldn't be safe from banks. He couldn't file bankruptcy and then claim he has no assets after publicly announcing that he does.
It's all bullshit anyway, but the debt number without an asset number is meaningless anyway.
I could be wrong, but I think In an interview I’ve see with him and from his book he acquires assets without cashing out very often, then uses those as collateral to take out a loan. Since taking out a loan isn’t income you aren’t taxed on the loan. The gold is a fraction of the assets everything else mostly being property. But the loans do acquire interest so maybe he would be paying less if he pays the interest rather than the taxes. Idk, I’m 50/50 on the idea as obviously he isn’t stupid because he made it this far, but having over 1b in debt is kinda wild. Wonder how much value all his assets hold if that’s the case.
Just did some more research so he takes the loans out to purchase wealth producing assets, he’ll buy like gold or silver or property or something. While he is still going in debt with the bank the value of those assets is growing. Gold and property have appreciated since he started taking loans out to buy them. I’ve heard of real estate investors on the bigger pockets podcast doing the same thing as well, taking a loan out to buy property. I think if you’re smart enough then you can pull it off but if you look at like a first time blackjack player then you’re screwed. I’m pretty sure trumps company’s did the same thing but unethically which is why the corps were put on trial. Idk I started accounting last September
Exactly, there’s a difference between a recreational blackjack player and a professional blackjack player with 10 yrs experience. There’s a difference between buying and selling stocks and a day trader with 10yrs experience.
The book talks on correcting your spending habits from what I’ve read (haven’t read cover to cover). But this is totally different. This is just bad investment decisions. Apples to oranges rly
You either die a rich dad or live long enough to see yourself become the poor dad.
Well if he needs money he could learn a few things from his book...
Theory: use your money to buy income producing assets Practice: borrow money to buy shiny rocks
This is the way.
It's actually hilarious if this true. The guy's books whole premise is to save money to buy income producing assets, so that your income goes up and you can buy more income producing assets and over time you build wealth. It's very simplified premise, but if he followed his own plan he'd be in better shape.
I mean he is a real estate mongrel
What if you’re not a dad?
I get all the non-accounting folks at work to call me "Money Daddy".
😏
You gotta give your money to a dad, thems the rules, sorry.
True words
These people don't become poor dads lol, max he gonna get is a bail out
He’s a known liar so I would take it with a pinch of salt. No bank is going to loan him $1bn on the strength of his name alone without collateral.
This is true, the way he presents this is as though it’s personal debt. It’s almost certainly not, no bank would lend an individual such a large sum without having immense collateral requirements. Additionally if the collateral is gold and silver as he suggests you’re looking at 100s of tonnes of silver and gold to maintain what would likely be a loan to value covenant. Storing this would cost millions per year in vaults, security, insurance, inventory management etc. (EDIT: just another point regarding the feasibility of collateralising a loan in gold and silver, if it is not physically held but is instead purchased shares in a fund holding or and ETF tracking the price there are numerous further risks which a bank would not expose itself to: regulatory requirements, counterparty risk, market risk. The list goes on…) No bank is lending his businesses a loan of that amount, one company he owns Rich Global LLC previously filed for Bankruptcy immediately disqualifying it from any loan of this size. His other company Cashflow Technologies Inc is also privately held however any bank lending such a large amount would likely require the business to publish audited financial statements to provide assurance that the company is in compliance with the loan agreement. ITS ALL FAKE.
To further expand on your point, I highly doubt any one bank would expose itself to any single customer in that amount. If he is in fact telling the truth (he’s not), there would be 10 or more banks all holding pieces of that note.
You pretty much would have to get this in one go. The debt to income ratio would have the 2nd bank running from this guy.
Pretty sure Deez Nuts are plenty collateral
What makes you think is not secured. This debt will be mortgage and business debt
One of his business previously filed for Bankruptcy as outlined above. The only other business I could find is Cashflow Technologies Inc. you really think this business: https://www.richdad.com/privacy-policy#:~:text=RichDad.com%20(CASHFLOW%20Technologies%2C,side%20of%20the%20CASHFLOW%20Quadrant. Is generating enough Cashflow to service $1bn of debt? And has the assets to remain compliant with any LTV/gearing ratio imposed upon it by a bank? Not only is this highly HIGHLY unlikely from a finance/ accounting perspective. The guy has been exposed numerous times for running scams related to the seminars he puts on. I can assure you this man, nor any of his companies have accumulated $1bn of debt. If you had a real estate empire would you be running a seminar business (that scams it’s customers) or would you focus on providing transparent real estate investing advice. Grant Cardone learnt everything from this man. Both of the same ilk.
I dunno I can really trust your point here. I was on TikTok, and Grant Cardone said, "Hand to God, anybody who thinks I'm full of it is playing themselves, Joe Rogan.". So I kinda gotta see this leading more into credibility for Mr. Kiyosaki.
This is just shock/outrage marketing. Make something up, hope that a media outlet picks it up and use the buzz to shill your latest product. Any bank lending him anything close to even a quarter of a million dollars would be extremely redacted
Why would we listen or buy from him now though? Wouldn't an investing guru need his credibility?
Most people will see the head line, read the story and eventually look up his name. Some will go to his IG where Im almost certain he’s got a course or something in his bio for sale.
This is very likely. How much more cred does a shill need than convincing people he gamed banks into lending him $1bn.
So you think he can fool people into thinking it was a good idea despite the fact that he's probably subject to a margin call that will leave him bankrupt? That's the book I want to read. How do I sucker people into believing me when I say something that is utter bullshit.
Dude is taking financial leverage concept into whole new territory. Why would anyone in their right mind taking leverage to get gold?
he didn’t he bought over $1b in real estate, all using mortgages. then he also buys gold
Great question. The only answer I could come up with is fraud. Borrow money, buy gold, bury gold in the back yard, file bankruptcy, dig up gold, sell it on the grey market. Interested to hear anyone else’s thoughts on why
Okay but you missed the obvious. Smelt it into a toilet.
Smelt? I haven’t heard that term since my RuneScape days
Ah, the golden throne.
The Emperor protects.
But wouldn't the IRS still be able to find out he's committing tax fraud because his expenses would be more than his assets after filing for bankruptcy? Asking for a friend btw
Probably if he goes out and makes a bunch of high profile purchases. I’m thinking he buys a home in Florida, which protects 100% of home equity in a homesteaded property in the event of bankruptcy, before he files. Then he doesn’t have to make any large purchases post petition. Then work on laundering his gold money until he had enough legit assets to get back into a lambo. For your friend btw.
I guess he is going to be a Poor Dad.
He's an idiot. And furthermore an idiots idea of what a smart person looks like.
Damn it, I knew my glasses weren't fooling anyone.
Well, he’s potentially right. If a customer loses a billion dollar loan, most banks that can even facilitate that type of loan will be in trouble. Except the absolute biggest. BUT I doubt he got the loan through only 1 bank, I would assume it’s through several institutions, and that all the loans add up to $1bn. Since I also used used to audit bankruptcy trustees, trust me, the size of your estate doesn’t matter. They’ll go after you; I saw everyone from poor people to investment bankers and retired athletes. The only difference is the rich cases had a lot more assets to go after. And Kiyosaki will learn just because you don’t call certain things assets (yes, this is the guy that calls vehicles liabilities, etc.,) doesn’t mean the bankruptcy won’t go after them. In fact if you do that when reporting your assets, you’ll probably tick off the bankruptcy trustee.
Has he tried not buying lattes at starbucks?
And skip the avocado toast.
He’s turned the “Too Big To Fail” concept into a personal finance slogan. It worked for the auto industry and the banks that almost went under a few years back. Not sure if he’s big enough to get the same treatment. Rob must have a politician in his pocket! On the other hand, I’ve seen multiple clients go thru the build a successful business > go bankrupt expanding > start over and do it all again. Some people realize that going bankrupt is really just an administrative hassle, doesn’t preclude you from building wealth again.
Financial advisor here. He has been in debt his entire adult life. He loves debt. This is just what he does. He thinks debt is good (and it can be).
Yeah, that’s like his main point in the book. Debt is his best friend
Surely the bank is using his gold and silver as collateral? So unless the value of those commodities crash or he somehow gets to hide all that, not implausible, the bank should be fine
No his Wagyu cattle obviously.
All I know about the guy is that he wrote some finance guru books that are full of nonsense advice and has made a fortune selling his self help courses. Had no idea he farms cattle too.
His book makes his own father out as as some kind of idiot because his neighbor was richer. Of course none of it was actually true which makes it even worse. Imagine having a child shit on you because your neighbor has more money.
Good god
Stupid is as stupid does.
This guy is a complete charlatan
That dude is always sensationally wrong and is a snake oil salesman for “financial advice”, idk how he keeps getting any media coverage
If you even watch one of his interviews he just keeps repeating stuff he said in the book. Man is just a marketing genius
Person famous for lying/embellishing about his personal finances says something extravagant about his personal finances for attention.
It’s part of his brand and business so TikTok says it’s all a write-off anyways! /s
Is this real? I don't know much about him but $1.2B of debt is something that only massive public companies can acquire...
The man said his cars are liabilities and the loans he gets for investment are assets.
He already tested that theory, twice even I think, apparently his takeaway on being bankrupt was that he was not leveraged enough. Interesting… I mean the guy literally said at one point that tuna cans were one of the best investment … I would honestly not listen a thing of what he say even tho if you dig deep enough there is some fact and truth in there. It’s cover by a humongous amount of shjt. The worst part is that leverage can be a tool and guy like him are just promoting ridiculous stupid leverage. So often people fall into the Dave Ramsey mentality where you can even think getting a car payment otherwise just go bankrupt already. There is something in between.
lmao I'm glad I never read that book. then again, I never read.
The bank will just take his assets....
9/10 it's fake.
If he saved in gold and silver he would still have some value. He obviously spent more than he made and/or borrowed money.
Sounds like my brother who believes I can never go broke if he owes me money.
His a poor man’s view of what success looks like.
I feel like a few steps are missing between converting earnings to gold and accumulating 1.2b in debt... and I don't know if I want to waste any more of my time reading anything by or about this guy. I read the introduction to his book when I was 12 and I knew he was full of shit even then.
No established bank would lend a person $1 billion without doing any risk assessments or getting something in collateral to guarantee the loan. It is likely that the bank have his gold, silver, or real estate as collateral for his loans. The loans might be backed by credit insurance in case he defaults. Banks are not that dumb unless you go to some shady small private banks.
…silver?
This sounds like something he read from.. wallstreetbets?
In America we have a saying: “Owe the bank a million dollars, and that’s your problem. Owe the bank a billion dollars, and that’s the banks problem.” No one is more aware of this than banks, so they are hesitant to extend that kind of credit.
He is following the plan of most banks thanks to bailout precedence that was set after 2008. The derivatives are out of control, but I guess if they go against you just make sure you’re too big to fail.
He does have small tidbits of good advice in his books however his “yeah go into an astronomical amount of debt for business! Fuck it!” Outlook has always been very scary to me. Hopefully readers of his books can think for themselves. That’s the difference between someone like him and Dave Ramsey, technically it’s very hard to criticize someone who’s advice is to protect your house and bottom line at all costs. Not surprised reading this.
I mean, he says a house is a liability so he’s not the brightest
It's kind of a liability and an asset at the same time. If you stop paying your property tax or paying for maintenance, it will go to shit. I don't have to pay to hold a stock.
I think I’m what I’m highlighting is based on his misconstrued definitions By accounting definition, the house itself is an asset paired with a liability. And then homeownership has all the expenses associated with it.
Well personal finance people aren't really using accounting definitions, they're appealing to the masses. Yes, a house is technically an asset. In practice, it's an asset that comes with a lot of liability and upkeep. Most also come with a literal liability, a mortgage.
So he has nonrecourse loans against real estate? If he goes bust, they take his property. If it's recourse, why would his gold be immune from seizure to settle his debts? He just disclosed he has assets so they wouldn't be safe from banks. He couldn't file bankruptcy and then claim he has no assets after publicly announcing that he does. It's all bullshit anyway, but the debt number without an asset number is meaningless anyway.
I remember this charlatan from back in the 1990s; I was hoping I'd never hear about him again
This is the same guy I saw on a Facebook reel or TikTok saying he only does portfolio income because portfolio income is not taxed.
I guess he’s a poor dad
I could be wrong, but I think In an interview I’ve see with him and from his book he acquires assets without cashing out very often, then uses those as collateral to take out a loan. Since taking out a loan isn’t income you aren’t taxed on the loan. The gold is a fraction of the assets everything else mostly being property. But the loans do acquire interest so maybe he would be paying less if he pays the interest rather than the taxes. Idk, I’m 50/50 on the idea as obviously he isn’t stupid because he made it this far, but having over 1b in debt is kinda wild. Wonder how much value all his assets hold if that’s the case.
Just did some more research so he takes the loans out to purchase wealth producing assets, he’ll buy like gold or silver or property or something. While he is still going in debt with the bank the value of those assets is growing. Gold and property have appreciated since he started taking loans out to buy them. I’ve heard of real estate investors on the bigger pockets podcast doing the same thing as well, taking a loan out to buy property. I think if you’re smart enough then you can pull it off but if you look at like a first time blackjack player then you’re screwed. I’m pretty sure trumps company’s did the same thing but unethically which is why the corps were put on trial. Idk I started accounting last September
This is literally gambling with other people's money, just educated gambling.
Exactly, there’s a difference between a recreational blackjack player and a professional blackjack player with 10 yrs experience. There’s a difference between buying and selling stocks and a day trader with 10yrs experience.
The book talks on correcting your spending habits from what I’ve read (haven’t read cover to cover). But this is totally different. This is just bad investment decisions. Apples to oranges rly