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Have you ever read about the great ancient city of Babylon and its wealth? It seems that the city’s great wealth was in part the result of the successful accumulation of wealth by many ordinary individuals, not just the ruling powers. How did the average person go about creating wealth? What was Babylon’s secret? Perhaps that centuries-old wisdom can still apply today.
Although how they actually did it may remain much of a mystery, curious suggestions thrive to this day. As George S. Clason wrote about in The Richest Man In Babylon, it would be plausible that it included some timeless yet very simple personal finance principles. Perhaps it was common sense then, yet so uncommon today. What’s at the core of this wisdom? Let’s review some pivotal bits from The Richest Man In Babylon.
Keep ten percent of all you earn. That means pay yourself right off the top, before you pay anyone else. And this is not to be spending money, but saving and investing money. So make yourself survive on ninety percent to pay for everything else. Control and reduce your expenses if necessary. You won’t miss the ten percent.
Before investing the savings from your ten percent accumulations, get advice from experts. Don’t fall for advice from family or friends unless they are rich (and not just looking rich). Don’t fall for get-rich-quick schemes – that only works for the schemer selling you out. And don’t let other idiots lose your money (or then you join the crowd).
Invest to make your money work for you – make it your slave. Your investments have to earn children and grandchildren. The power of compounding interest is the key. Keep in mind that “a small return and a safe one is far more desirable than risk” (quote from The Richest Man In Babylon).
Own your home. Plan to pay it off sooner rather than later. Make your refuge a great investment as well. Buy location, location, location. Think it through before plunging into buying a home. Get council from experts (not real estate agents, bankers, loan officers, or family and friends who aren’t rich).
Be quick to take opportunities to earn more. But get council from experts (or you become the expert) in whatever the opportunity/investment field is before plugging in. The more of wisdom we know, the more we earn.
Do not take on others’ burdens (for lack of them trying and working). You won’t win by bailing out friends or family who don’t want to make it on their own. If you want to give them money for an absolute necessity, as in charity, that’s no problem. Just don’t loan them money, be partners in their grand schemes, or otherwise support their lack of motivation. But loaning can be good to some, so be a wise gold lender.
Work hard. If you’re not willing to sacrifice and work your ass off for it, then you don’t deserve it and you probably won’t achieve it anyway. There is no such thing as lady luck or free handouts. “Wealth grows whenever men exert energy” (quote from The Richest Man In Babylon).
All, so true. Thanks master Clason.
I’m convinced that free enterprise with support only given to those who truly can’t support themselves, versus just not wanting to support themselves, is the path to a wealthy society. If everyone is doing what they can to build and create things, there are more things being built and created. Free enterprise rewards those who build and create things that are useful to others in proportion to how much they build and create. Make sandwiches all day and feed 50 hungry people, make $64 per day. Open a chain of sandwich shops that feeds thousands of people a day, make $64,000 per day. Not giving things to those who choose not to work incentivizes them to at least do enough to pay for their own food and necessities. If those who can take care of themselves do so, society has a lot more left over to take care fo those who can’t.