Robert Kiyosaki defines good debt as money flowing in, bad debt as money flowing out. A mortgage is typically bad debt, but you can convert it by using home equity to fund investments that generate cash flow. The speaker carries large debt because his portfolio's cash flow and assets far exceed what he owes, letting each dollar work harder.
There is some different types of wealth of debt though. There's your good debt and there's your bad debt. Now, good old Robert Kiyosaki, he had a simple definition: good debt puts money in your back pocket, take money; bad debt takes money out of your back pocket. That's really what it is. It's investment debt or it's personal debt is what we're kind of talking about right now. The debt on your home is considered a bad debt because it's not putting cash flow in your back pocket, right? However, if you begin to utilize the equity out of it, you can flip that debt. From being bad debt to good debt and use it to put money in your back pocket. Okay, I love being millions of dollars in debt. I'm super happy about being millions of dollars in debt. My asset value and my cash flow that I earn from my portfolio far overruns the amount of debt that I have, but it allows me to make every single dollar I have go a lot farther. Because if it's only just based on how much money you can save in life Then your ability to be able to get ahead is going to be incredibly limited, especially this day and age with the cost of living crisis and also the serviceability crunch that we're in.
