‘The Fastest Way Out of Debt Is More Debt’: Robert Kiyosaki Says His Yacht and Private Jet Are Paid for by the People Who Rent Them

Robert Kiyosaki knows the objection to his debt advice, and in a Rich Dad Radio Show episode posted earlier this month, he raised it himself. "They say, 'Sure, Robert, that's easy for you. You're already rich.' Fine," he said. "Kim and I own a 58-foot sailboat, and we own a jet. Most people would call that proof. Rich guys' toys. The two worst financial decisions you can make. And for them, they'd be right." Then came the turn: "That sailboat and that jet, who pays for them? Because it isn't Kim, and it isn't me."

His answer is that the toys are businesses. "Our boat is in a charter business. Tourists rent it, and the tourists pay for the debt, the insurance, the upkeep, the slip. We make money every month, and Kim and I use the boat when we please," he said. “Same with a jet. When I'm not flying it, I rent it out. Charter. Other people pay to fly, and their money pays for the jet. Same toys, different direction.”

That last phrase is the whole episode in four words. The question he wants a listener to ask about any purchase is this: Which way does the cash flow?

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The boat and the jet are there to defend a line he opened the episode with. "Everything you were told about debt says pay it off, cut back, work harder, pay it down. And millions of people have been doing exactly that for 20 years, still in debt," he said. “Here's what the rich know. The fastest way out of debt is more debt. That sounds insane, I know.” Previously, Kiyosaki said he was $1.2 billion in debt, and that if it all went bust, his creditors could talk to his attorney. 

"Good debt is tax-free money. Say you earn $20,000. The government takes its cut first, say 25%. You have $15,000 left. Now, say you borrow $20,000. Nobody taxes a loan. All $20,000 goes to work," he said. "Your paycheck is taxed before you touch it. Borrowed money isn't." That is true as far as it goes: Loan proceeds are not income. What it leaves out is that the loan has to be repaid with interest, and for a boat or an aircraft used personally, that interest is paid out of after-tax dollars and is generally not deductible. The deductions he points to exist only when the asset is a bona fide business, and the IRS tests charter operations under its hobby-loss rules precisely because so many owners try to write off a yacht. None of this is a how-to, and it should not be read as one.

Charter economics are also less automatic than "tourists pay for the debt" suggests. Yacht-management programs that place owners' boats in charter fleets typically advertise owner income as a modest percentage of the boat's purchase price each year, before the owner's own loan payments, and they do not guarantee occupancy outside a contract term. A charter boat still carries vacancy, wear, insurance claims, and liability, and the loan behind it still has the owner's name on it. Leverage that pays the slip fee in a good season comes due in a bad one. That is the plain risk sentence any reader thinking about copying the structure needs, and Kiyosaki, who makes his living selling books and courses built on this thesis, did not supply it.

Kiyosaki also has a long public record of predictions, some of which have not aged well, and that record is a separate story. What is new here is the mechanism, not the sermon. He has turned two purchases most planners would list first among things not to borrow for into an argument that the borrowing itself is the point, provided somebody else makes the payment.

Set this next to the man who argued the opposite. Charlie Munger asked “Who in the hell needs a real Rolex?” and told young people to skip the pretentious spending altogether. Kiyosaki's answer is that the toy is fine if it is a business that happens to float. Both men agree on one thing: The direction of the cash matters more than the object, and a reader doesn't need a sailboat to apply that. A car loan on a vehicle that sits in a driveway flows one way. The episode really asks whether anything a household owns flows the other way.