We are $2 Billion in Debt, Here’s What Banks Don't Want You Know about Money

SUMMARY

Ken McElroy and Robert Kiyosaki debunk debt myths on their private jet, revealing how leveraging other people's money through good debt builds wealth via appreciating assets like real estate, not living debt-free.

STATEMENTS

The US dollar and all fiat currency represent debt, making living completely debt-free impossible as money itself is debt-based.
Banks view customer deposits as liabilities because they owe interest on them, so they lend out this money as other people's money (OPM) to generate profit.
Becoming rich requires practical skills like using debt as money, rather than relying solely on a college education.
Sales drive income, and entrepreneurs use debt to acquire assets that compel others to contribute money through their pockets.
With assets like a $10 million jet, 100% bonus depreciation allows writing off the full value, including 80% financed through debt, providing significant tax breaks using OPM.
In real estate, good debt enables tenants to pay off the property over time, turning it into cash-flowing equity without personal outlay.
Bad debt involves purchases that depreciate over time, such as consumer goods on credit cards, while good debt targets assets that appreciate and generate income.
Most people's financial net worth is concentrated in their personal residence because they pay it off over time, but they fail to apply this to rental properties for true freedom.
Banks lend against collateral, so successful debt strategies start with identifying assets that lenders can reclaim if needed, avoiding risky personal guarantees.
Surrounding oneself with wealthy individuals who discuss microeconomics, books, and continuous learning sharpens financial acumen, unlike conversations about sports among the poor.

IDEAS

Fiat money's debt nature means everyone is inherently in debt; the key is controlling whose debt funds your assets.
Deposits burden banks as liabilities, turning savers into unwitting funders of borrowers' wealth-building through interest obligations.
Sales skill trumps formal education for riches, as it converts persuasion into income streams via asset-backed debt.
A private jet can yield a $10 million tax write-off mostly from borrowed funds, flipping perceived luxury into a tax shield.
Real estate mimics jet financing but with tenants as passive payers, transforming debt into self-sustaining wealth machines.
Poor mindsets fixate on "I can't afford it," trapping them in poverty, while rich ones ask "How can I afford it?" to unlock opportunities.
Personal residences build equity unintentionally, yet replicating this with rentals could achieve financial independence for most.
Lenders prioritize collateral over credit scores; default risks are mitigated by asset recovery, not personal ruin.
Risky debts like personal guarantees on hard money loans lead to trouble, whereas non-recourse asset-based debt protects borrowers.
Conversations with rich friends focus on books, articles, and studies, fostering growth, unlike trivial talks that keep others stagnant.
Buying appreciating assets like jets post-purchase can increase value, countering depreciation myths in high-end investments.
Banks solve deposit dilemmas by lending to entrepreneurs, who in turn create jobs and economic circulation.

INSIGHTS

Debt's dual nature—fiat currency as inescapable debt—shifts focus from avoidance to strategic leverage for asset control and wealth transfer.
Banks' liability from deposits creates opportunities for borrowers to use OPM, inverting saver-lender dynamics into entrepreneurial advantage.
Mindset pivots from limitation to possibility ("How can I?") cultivate skills in sales and debt, essential for converting ideas into income-generating assets.
Good debt's power lies in third-party repayment, like tenants or charters, automating equity buildup while minimizing personal financial exposure.
Collateral-centric lending favors asset-rich strategies over credit reliance, ensuring debt serves as a tool for appreciation rather than entrapment.
Continuous immersion in rich networks and learning materials refines financial intuition, turning abstract knowledge into practical wealth acceleration.

QUOTES

"excuse me excuse me is that my money in your pocket"
"if you want to be a rich it took skills not a college education but skills and the number one skill not number one but one of the top skills is how is he use debt as money"
"good debt makes you rich bad debt makes you poor"
"I can't afford it rather than how can I afford it"
"our job as entrepreneurs and as Capal is how do we use debt and create assets that other people reach into their pocket and give it to our"

HABITS

Constantly study financial topics, attending events like George Gammon's to deepen understanding of markets and debt.
Read books and articles regularly, pulling them out during conversations to exchange insights on personal growth.
Surround yourself with wealthy friends who discuss microeconomics, investments, and improvements instead of entertainment or sports.
Ask "How can I afford it?" when facing expenses, opening the mind to creative debt and asset strategies.
Review financial statements of advisors or teachers before following their debt advice, ensuring theory aligns with proven results.

FACTS

Ken McElroy's company, MC Companies, employs over 300 people and owns more than 10,000 apartments.
They have transacted over $3 billion in real estate and plan to buy over $1 billion more in the next 12 months.
Combined, McElroy and Kiyosaki carry over $2 billion in debt, primarily good debt for wealth-building assets.
A $10 million jet can be financed with $8 million debt, allowing a full $10 million tax write-off via 100% bonus depreciation.
Most people's net worth is tied up in their personal residence, often their only significant asset due to mortgage payoff.

REFERENCES

Books: "The ABC’s of Real Estate Investing," "The Advanced Guide to Real Estate Investing," "The ABC’s of Property Management," upcoming "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years."
Podcast: Ken McElroy's Real Estate Strategies podcast on Apple Podcasts and Spotify.
Webinar: Free webinar on June 25th detailing MC Companies' real estate acquisition strategies.
Event: George Gammon's event for financial education.
Company: MC Companies (mccompanies.com) for real estate operations.
Bookstore: Ken's Bookstore (kenmcelroy.com/books).

HOW TO APPLY

Identify good debt opportunities by selecting appreciating assets like real estate or equipment that generate income, ensuring tenants or users cover payments over time.
Secure financing by presenting strong collateral to banks, such as property or jets, to avoid personal guarantees and minimize default risks.
Leverage tax benefits like bonus depreciation: For a financed asset, write off the full value including borrowed portions to reduce taxable income immediately.
Shift your mindset daily by replacing "I can't afford it" with "How can I afford it?" and brainstorm OPM uses, such as loans against future cash flows.
Build a learning routine: Read financial books weekly, join rich networks for discussions on microeconomics, and attend webinars to replicate successful strategies like acquiring rental properties.

ONE-SENTENCE TAKEAWAY

Embrace good debt as OPM to acquire income-generating assets, transforming perceived financial burdens into pathways for lasting wealth.

RECOMMENDATIONS

Challenge debt-free gurus by studying asset-based leverage, as 92% misuse debt on depreciating items instead of wealth builders.
Start small with rental properties, replicating your home mortgage success to let tenants build your equity and cash flow.
Network exclusively with learners discussing books and markets, avoiding sports talks that distract from financial sharpening.
Prioritize non-recourse loans backed by assets to shield personal finances from business downturns.
Attend targeted education like webinars on real estate deals to plan billion-dollar scale acquisitions without starting capital.

MEMO

Aboard a sleek private jet slicing through the skies, real estate mogul Ken McElroy and financial educator Robert Kiyosaki confront one of America's most pervasive financial myths: that debt is the enemy. With over $2 billion in combined debt—far from a liability in their eyes—they argue that money itself is debt. The U.S. dollar, like all fiat currency, originates as borrowed value, making a truly debt-free life an illusion. Instead, they advocate mastering "other people's money" (OPM) to fuel wealth creation, a strategy rooted in entrepreneurial savvy rather than academic credentials.

McElroy, whose company manages 10,000 apartments and eyes another billion dollars in acquisitions, illustrates with vivid examples. Consider a $10 million jet: Finance 80% through a loan, claim 100% bonus depreciation for a massive tax break, and watch the asset appreciate by at least a million dollars. Real estate operates similarly but smarter—tenants foot the bill, paying down debt while generating cash flow. "Good debt makes you rich; bad debt makes you poor," Kiyosaki quips, decrying consumer traps like credit card splurges on depreciating cars. Yet most Americans park their net worth in a single home, blind to scaling this model with rentals for true freedom.

The duo skewers the "live debt-free" mantra popularized by figures like Dave Ramsey, not as malice but as mismatched advice for the unskilled. Banks, they explain, treat deposits as headaches—liabilities demanding interest—compelling them to lend aggressively. Savvy borrowers solve this by offering collateral: properties or planes lenders can seize and resell. No need for perfect credit; it's about assets that appreciate. "Excuse me, is that my money in your pocket?" Kiyosaki mimics the entrepreneur's ethos, urging a mindset flip from "I can't afford it" to "How can I?"

Their jet conversation underscores a deeper truth: Wealth compounds through continuous learning, not idle chatter. Pulling out books and articles mid-flight, they probe each other's studies—microeconomics, not March Madness—to hone edges. McElroy's upcoming webinar promises blueprints for replicating their path, from bridge loans to tax strategies. In a world where 92% wield debt poorly, this approach demands discipline: Study relentlessly, befriend the ambitious, and treat banks as partners in problem-solving.

Ultimately, Kiyosaki and McElroy paint debt as capitalism's engine, democratizing jets and empires for those who reframe it. For the aspiring rich, the lesson is clear—don't fear the red ink; direct it toward assets that pull prosperity from others' pockets, forging financial independence one leveraged deal at a time.