THE RICHEST MAN IN BABYLON
The Richest Man in Babylon is one among many great books written on personal finance. George Samuel Clason had a beautiful way of sending his message across that is very captivating and keeps the reader going. His book has so many life lessons, that when put to use as he sets them will get an individual to a path of wealth accumulation. He used the historical city of Babylon and the fictional individuals to drill down his message about how to make money, how to keep your money and how to make your money multiply.
He explains that the financial prosperity of a nation depends on the financial prosperity of its citizens. For an individual to grow his bank account, he has to understand the basic financial principles that governs the acquisition of money, how to appreciate the value of money, keeping money and through sound investment, make more money. He firmly believes that for one to achieve their ambitions and gratify wished desires, one must learn to be successful with money. The following are his advice on acquiring money; he calls them the Seven Cure for a Lean Purse.
- Start thy purse to fattening: To accomplish this goal of fattening or growing your bank account you have to pay yourself first, you have to think about this principle “A Part of What I Earn is mine to keep”. He recommends saving 1/10, or 10% of earnings. This goes to say that an individual needs to build a good saving habit and learning to pay oneself via your account or your saving plans first before using your money for any other thing. Remaining consistent with a saving plan is the first step to wealth accumulation.
- Control thy expenditures: In simple terms, set a budget. Take time out to review your day to day living expense, and from them remove items that are not necessities. By studying thoughtfully your accustomed living habits, you will come to realize there are expenditures that you can do without. This does not imply depriving yourself of good living. It only means that you will need to put them into your budget and make them fit such that you still have enough to save 1/10 of your earnings.
- Make thy gold multiply: Invest, Invest and Invest! After building up your savings by setting aside 1/10 of your earnings and through proper budgeting you succeeded in cutting out unnecessary expenditures, it is now time to put your savings to work. It could be by putting them into interest earning accounts, investing in stocks and utilizing the power of compounding interest.
- Guard thy treasure from loss: No one wants their hard earned money to be lost in unwise investments. Invest your money only in business ventures you understand. If you have no knowledge of how to go about an investment, find a mentor that will help direct you towards achieving your financial goals. Be careful however not to seek the advice of people who know nothing of an investment least you lose your money. Seek advice from successful people in that particular venture not just any Tom, Dick and Harry.
- Make of thy dwelling a profitable investment: