Debt can make you poor or rich depending Meaning Factcheck Usage

Debt can make you poor or rich… it all comes down to what you’re borrowing for. Good debt buys assets that put money in your pocket, while bad debt just drains it. This is the fundamental difference in how the wealthy build and how the average person struggles.

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Meaning

The quote means that debt is a neutral tool; its outcome—wealth or poverty—is determined entirely by the purpose and strategy behind its use.

Explanation

Look, I’ve seen this play out so many times. The average person uses debt to buy liabilities—a bigger car, a nicer TV, vacations they put on a credit card. This is what Kiyosaki calls bad debt. It sucks money *out* of your pocket every single month with no return.

But the rich? They use debt as leverage. They’ll borrow money to acquire an income-producing asset—like a rental property, a business, or stocks. That asset then generates cash flow that pays for the debt itself and puts extra money in their pocket. The debt literally works for them while they sleep. It’s the difference between being a slave to the lender and making the lender your slave.

Quote Summary

Context	Attributes
Original Language	English (3668)
Category	Wealth (107)
Topics	leverage (2), money (27), risk (54)
Literary Style	informative (41), pithy (25)
Emotion / Mood	empowering (174), realistic (354)
Overall Quote Score	73 (94)

Origin & Factcheck

This concept is central to Robert Kiyosaki’s 2017 book, “Why the Rich Are Getting Richer,” which builds on the principles from his earlier mega-hit, “Rich Dad Poor Dad.” While the core idea is his, people often mistakenly attribute similar sayings about “good debt vs. bad debt” to other financial gurus like Dave Ramsey, whose philosophy is actually to avoid almost all debt entirely.

Attribution Summary

Context	Attributes
Author	Robert T Kiyosaki (98)
Source Type	Book (4032)
Source/Book Name	Why the Rich Are Getting Richer (52)
Origin Timeperiod	21st Century (1892)
Original Language	English (3668)
Authenticity	Verified (4032)

Where is this quotation located?

Quotation	Debt can make you poor or rich depending on how you use it
Book Details	Publication Year/Date: 2017, ISBN/Unique Identifier: 9781612680811, Last edition: 1st Edition, Number of pages: 256
Where is it?	Chapter 5, Good Debt and Bad Debt, page 72

Context

In the book, Kiyosaki frames this within the idea of financial education. He argues that the old advice—”go to school, get a job, save money, and get out of debt”—is obsolete and even dangerous in today’s economy. The rich get richer because they are taught to use financial tools, especially debt, strategically to build their asset columns, while the middle class is taught to fear it or, worse, misuse it.

Usage Examples

So, who is this for? Honestly, anyone with a pulse and a bank account.

• For a young professional: Instead of taking on a huge car loan for a new BMW (a rapidly depreciating liability), use a smaller amount of debt to buy a duplex, live in one unit, and have your tenant’s rent pay the mortgage. You’re now living for free while building equity.
• For a small business owner: Instead of draining personal savings, a strategically sized business loan to buy a key piece of equipment that allows you to take on more, higher-paying clients can be a brilliant use of leverage.
• For someone in credit card debt: This quote is a wake-up call. It highlights that the debt they’re carrying is the “poor-making” kind. The focus should shift from “how do I manage this debt” to “how do I eliminate this and then learn to use debt correctly.”

To whom it appeals?

Context	Attributes
Theme	Principle (838)
Audiences	business students (4), entrepreneurs (1006), financial advisors (11), investors (176), young professionals (1)
Usage Context/Scenario	business blogs (4), economic podcasts (2), financial literacy workshops (3), investment coaching (2), motivational classes (11), training programs (31)

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FAQ

Question: Is all debt bad then?

Answer: Absolutely not. That’s the whole point. Debt used to acquire an income-generating asset is potentially good debt. Debt used to acquire a liability that loses value is bad debt.

Question: But isn’t using debt risky?

Answer: Of course it is. But so is inaction. The key isn’t to avoid risk, but to understand and manage it. Financial education is what turns a risky move into a calculated one.

Question: What about my mortgage? Is that good debt?

Answer: This is a classic one. Kiyosaki would argue your primary residence is a liability, not an asset, because it takes money out of your pocket (mortgage, taxes, repairs) without putting cash flow in. It’s only an asset when you sell it for a profit. An investment property, however, that generates positive cash flow monthly, is an asset.