Rich dad poor dad debt, a term coined by Robert Kiyosaki in his book of the same name, refers to the idea that there are two types of debt: good debt and bad debt. Good debt is debt that is used to acquire assets that appreciate in value, such as real estate or stocks. Bad debt is debt that is used to finance consumption, such as credit card debt or payday loans. Rich dad poor dad debt emphasizes the importance of using good debt to build wealth and financial freedom, while avoiding bad debt that can lead to financial ruin.
Good debt can be a powerful tool for building wealth. When you borrow money to invest in an asset that appreciates in value, you are essentially using the borrowed money to leverage your investment. This can allow you to grow your wealth more quickly than you could if you were only investing with your own money. However, it is important to remember that all debt is ultimately a risk. If the value of the asset you invest in declines, you could lose money. Therefore, it is important to carefully consider the risks and rewards of any investment before borrowing money to finance it.