Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business Why Paying Cash Is Keeping You Poor (What the Rich Know About Debt)
Mar 7, 2026
A contrarian take on debt and why wealthy people use it more. Clear definitions of good debt versus bad debt with vivid examples. Stories about using income-producing assets to pay for luxuries. Warnings about emotional spending and the need for financial education. Practical rules for respecting and harnessing debt to grow wealth.
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Good Debt Versus Bad Debt
- Debt isn't inherently bad; the wealthy use 'good debt' to generate income while the poor carry 'bad debt' that drains cash flow.
- Good debt example: a rental mortgage paid by tenants; bad debt examples: car payments, house payments, credit card purchases.
Treat Debt Like A Loaded Gun
- Treat all debt like a loaded gun: respect it, learn it, and control it rather than fear or ignore it.
- Use that respect to learn how to harness debt safely so it becomes a tool, not a liability.
Proud Of No Debt But Stuck With A Depressing Car
- A friend proudly showed a $3,500 used car he bought with cash and celebrated having no debt.
- Robert Kiyosaki contrasts that pride with the car's poor condition and the friend's reduced happiness despite being debt-free.