Debt is not always negative📉. Robert Kiyosaki teaches that it can be a tool to build wealth or a trap that ruins lives. It all depends on how it is used.
Bad debt is the one that finances consumption: credit cards for clothes, loans for vacations, or luxury cars that quickly lose value. This type of debt does not generate income, only expenses, and that's why it impoverishes. Every month the debtor must work harder to cover interest that leaves them with nothing in return.
On the other hand, good debt is used to acquire assets that produce cash flow. A mortgage to buy a rental apartment, a loan to start a business, or productive financing are examples. Here, the asset generates enough income to pay off the debt and also leaves profits.
The key difference lies in the mindset. Most people use debt to appear wealthy: bigger houses, new cars, gadgets. They believe they are advancing, but in reality, they are mortgaging their future. The rich, on the other hand, see debt as leverage: they know their capital is limited, but with borrowed money, they can multiply opportunities. They use debt to buy more assets, and the income covers the obligations.
Kiyosaki emphasizes that financial education is essential. If you cannot differentiate between an asset and a liability, debt will be an enemy. The traditional educational system does not teach these distinctions, which is why most fall into financial traps. In conclusion, debt is neither good nor bad: it depends on whether it puts money in your pocket or takes it away from you.
🚀 “Do not fear debt. Learn to control it and make it work for you, not against you.”
