Rich Dad Poor Dad by Robert T. Kiyosaki - Book Summary

RICH DAD POOR DAD is a all time number one personal finance book, more than 50 million copies have been sold. In this book, Robert Kiyosaki illustrates the mindsets and beliefs that make rich, rich and poor, poor by comparing the advice of his real dad with the father of the author's best friend.

Robert's biological father was very brilliant and highly educated. Finished his four year undergraduate degree in less that two years, then obtained Masters and PhD at two prestigious universities and reached number one position in the state of Hawaii's educational system. But at the end, he left debts to be paid upon his death, while Robert's mentor - who never ever finished eighth grade - become the richest man in state, leaving 10's of millions to his family and charity.

Robert's both father strongly believed in education but their mindsets are different. This book all about mindset. Poor dad was poor, and rich dad was rich, because of their thoughts about money and the actions to which those thoughts led.

Robert's compares both father's advice and finally accept his rich dad's advice and achieve financial freedom at the age of the 47.

Robert's rich dad teach him 7 key lessons -

5 Simple steps to manage personal finance

To fulfill all our desires, we not only have to save a part of our income, but also invest it.

We safe our future financially by increasing our saving money by invest it, and this is how the role of "personal finance" begins.

Personal finance means managing our finance according to our future goals.

Step 1.: Write your financial goal

Going for a vacation, retirement, buy a new car, saving for your child education all these are the financial goal.

Achievement of these financial goals, depends how well you plan your investments. The financial goal can be long term or short term.

For example, saving for retirement is a long-term financial goal, while buying a house or going on vacation is a short-term financial goal.

You need to make a separate list of all long-term and short-term financial goals and then plan your investment to manage your personal finance.

Secret Habits of Self-Made Millionaires

Billionaires often have great advice when it comes to creating wealth. Sometimes, not earning much but you have efficient management is effective in making money.

Even if you do not have a net worth in billions, you will sometimes have to take a page of a billionaire's book to better manage you wealth. In fact, even if youo are not earing millions every years, you can increase you wealth just by copying the financial habits and strategies of the super-rich.

Here are 4 habits you need to learn from billionaires to manage your money like the super-rich:

The 50/30/20 rule - Powerful way to managing personal finances

The budget is not simply a recording of income and expenditure. It is a tool that helps you manage your income and financial life. The 50/30/20 rule budget only requires you to track and divide your expenses into three main categories: needs, wants, and savings or debt. This reduces the amount of time you have to spend detailing your finances and allows you to focus more on the big picture instead.

According to this thumb rule:

• 50 percent of the earnings after tax should be used towards necessities.
• 30 percent of the money should be spent on luxuries or wants / desires.
• 20 percent money should be saved and invested towards your financial goals.
• Emergency Fund - your minimum 6 months expenses or minimum 3 months salary.

What Rich Teach Their Kids About Money

Rich educate their kids the ways of earnings, savings, investment and building assets like business, real estate, stock, bonds, etc. They do not teach them to work for money. They teach how money work for them.

Type of Earnings:
There are 4 ways to earn money:

1. Doing Job
2. Doing something your own, simple way by being a self-employed.
3. Creating a Business.
4. Doing Investment.