The secrets to wealth building are over 6,000 years old. It can be found in the 7 simple lessons contained in the pages of the book, The Richest Man in Babylon, by George S. Clason.
The Richest Man in Babylon, based on “Babylonian parables”, has been hailed as the greatest of all inspirational works on the subject of thrift, financial planning, and personal wealth. In simple language, these fascinating and informative stories set you on a sure path to prosperity and its accompanying joys. A celebrated bestseller, it offers an understanding and a solution to your personal financial problem. Revealed inside are the secrets to acquiring money, keeping money, and making money earn more money.
This book is a classic (originally published in 1926! and a must read for anyone who is committed to attaining financial security. My copy of this book looks very tired. I have personally read it 10 times (at least!) and it has survived my lending it to countless friends and co-workers. The very-easy-to-follow “Seven Cures for a Lean Purse” are as relevant today as they were 6,000 years ago when Babylon was the financial center of the world. There, numerous “common men” arose to financial greatness by learning and practicing these laws.
Read these “cures” and see how they relate to you and your finances. Learn what you can do to provide future financial security for yourself and your family.
1. Start Thy Purse to Fattening
This rule says you must pay yourself first, which means you must arrange your budget to where your expenses don’t exceed 90% of your income. The remaining 10% is yours to keep. This extra is to be used for investments only, not to be dipped into for any reason. If you are deeply in debt, take half of the 10% and pay down debt and use the other half towards investments.
2. Control Thy Expenditures
How is it that someone who makes $200,000 per year is often no better off financially than when they earned $45,000 per year? It’s because they spend $199,512 of it throughout the year, leaving little or nothing towards their future. You must sit down and devise a budget. List all of your living expenses, study them thoroughly, keep what is necessary and cut out all non-necessary expenses which rob you of the extra 10% you’ll need as seed money to provide for your magnificent future.
3. Make Thy Gold Multiply
This piece of the puzzle is absolutely necessary in order to gain future financial security. You must make every dollar you save a soldier that works to compound itself over and over. This will provide a future income from your investments that you can live off of should you choose not to work.
4. Guard Thy Treasures From Loss
Your investments must be such that you don’t risk your valuable principal (stock market from the years 2000-2002, ouch!). Therefore you must start small, seek knowledge of investing from wise people, and invest in what you know best before moving on to bigger investments.
5. Make of Thy Dwelling a Profitable Investment
There is a great sense of pride in owning your own home, eating fruit of your own tree, and working in your garden. Make sure it’s a good investment and not so lavish that you can’t live within the 90% necessary to make this plan work.
6. Insure a Future Income
There is one certainty we can all (hopefully) count on, and that is we are all aging. Therefore, it behooves us to set up this plan early in life and stick to it while we are in our peak earning years. That way we can provide for our future needs with the income we make today. Even if you are not young, it is never too late to start on this plan.
7. Increase Thy Ability to Earn
The ability to earn is the rocket fuel for this plan. You must show more interest in your work, improve concentration on your tasks, and have greater persistence in your efforts. Thus the seventh, and final, cure for a lean purse is to cultivate your own powers, to study and become wiser, and to constantly be working on your skills. In doing these acts you’ll acquire confidence in yourself and your ability to achieve, which will naturally lead to more income, helping to fund your magnificent future.
So there you have it. 7 Cures for a lean purse. These brief descriptions are just the tip of the iceberg. To fully understand the power of these principles, get (and read!) your own copy of The Richest Man in Babylon. Happy “purse fattening” my friends!
Dream it… Plan it… LIVE it!
~ Tim Rhode