Recently, the writer of “Rich Dad, Poor Dad” Robert Kiyosaki posted on X that “only chumps” would believe bonds are a safe investment. Kiyosaki went on to say that bonds come with counter-party risk and that the only truly safe investments are gold, silver and Bitcoin. Kiyosaki called everything else “toilet paper.”
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Is this true? GOBankingRates reached out to other financial experts to find out their takes on Kiyosaki’s statements. Read on to see what the consensus is on whether bonds are a safe investment or not.
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Not All Bonds Are the Same
Kiyosaki’s statement about bonds doesn’t take into account the different types of bonds. “Not all bonds are created equal,” explained Drew Stevens, president of Wisdom to Wealth. “Treasuries, municipal and corporate bonds serve different purposes and react differently to market stressors.”
Treasury bonds are issued by the U.S. government, so their value is guaranteed so long as their government is standing, but the interest they deliver may waver if interest rates rise (which they have been doing). These are the types of bonds Kiyosaki is likely referring to in his argument.
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Municipal bonds are issued by state and local governments. They also offer appealing rates to investors. However, if the government were to go bankrupt, then the bond’s value is not guaranteed.
Corporate bonds are issued by businesses. The value of these, as you might have guessed, really depends on the strength of the corporation that issued them. However, because of this inherent risk, the ultimate yield can sometimes be extremely high in comparison with the other bonds.
Some Bonds’ Value Depends on the ‘One Big Beautiful Bill Act’ Outcome
If passed in its current state, President Donald Trump’s “One Big Beautiful Bill” would add $2.4 trillion to the deficit. Financial expert and strategist David Lester said that amount of debt might cost bond investors — specifically treasury bonds. “As U.S. debt increases, lenders — including foreign governments and institutional investors — may begin demanding higher yields to compensate for the perceived risk,” Lester said. “Should that happen, older treasury bonds offering lower yields could lose appeal, as new issuances offer more competitive rates. So Robert is most likely correct about staying away from bonds if the bill passes.”
Opt for Treasury Inflation-Protected Bonds To Be Safe
If investors want to look into bonds, one option that would be protected against the mounting national debt is an inflation-protected bond. “These instruments adjust both the principal and the interest with the consumer price index, so the real value of the payment stream stays intact,” explained Sami Andreani, finance expert and chief financial officer at Oppizi. “The trade-off is a smaller starting yield, yet many households decide the shield against inflation is worth the lower current income.”
Diversification Is Key
The majority of experts agreed that bonds should just be one piece of your financial portfolio. “Labeling all bonds as ‘unsafe’ is a sweeping generalization,” Stevens said. “Bonds, like any asset class, require context and strategy. When used properly, they can still play a critical role in portfolio diversification and capital preservation, especially for conservative investors or those nearing retirement.”
Noam Korbl is a personal finance expert in addition to co-founder and chief operating officer at PropFirms. Korbl stressed that bonds are not meant to be a some get-rich-quick scheme, but rather a tool to weather volatility in shaky markets. “In the last decade, even through inflation and central bank shifts, treasury bonds have delivered average annual returns around 3% to 4%, depending on duration. That might not impress crypto enthusiasts, but for pension funds and people nearing retirement, that consistency matters,” Korbl explained.
Korbl added that bonds come with many tax advantages as well. “In certain states like Florida or Texas where state income tax is zero, interest from federal bonds comes in clean. Municipal bonds go even further with triple-tax-free status in the state they’re issued,” Korbl said.
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This article originally appeared on GOBankingRates.com: Robert Kiyosaki Warns That Bonds Aren’t ‘Safe’ — Do Experts Agree?
