"Ahead of you stretches your future like a road leading into the distance; along that road are ambitions that you wish to accomplish and desires that you wish to gratify. To bring your ambitions and desires to fulfillment, you must be successful with money." George Samuel Clayson.
Imagine you are a poor person living in the wealthiest city in the world; this is what the richest man in Babylon is about.
The story follows a poor scribe named Arkad as he amassed riches in what is one of the world's wealthiest cities. The financial advice given by Arkad is told in an entertaining and fun story, and we are going to cover the two maiden sections: Arkad's seven cures for a lien purse and the five laws of gold.
The first cure is to pay yourself first.
Let me ask you a question: when you get your paycheck, do you pay rent, bills, and groceries, then save whatever is left?
If this is the case, then you need to change your way of thinking and pay yourself first. If you put 10 percent of your income into savings and investments before paying bills, how much further ahead will you be in one year? Even if you only make a thousand dollars a month, saving 100 a month turns into 1200 in a year, and that is if you make any sort of interest at all. If you learn nothing else from this book, remember that the wealthy pay themselves first while the poor don't.
The second cure is to control your expenses.
Keeping up with the Joneses is a stupid concept; this way of thinking promotes overspending, racking up credit card debt, and living large rather than financial stability.
Comedian George Carlin nailed this concept when he said we buy sh*t we don't need, with money we don't have, to impress people we don't like.
Back to the first example, if you make a thousand dollars and are following the first cure, then you have nine hundred dollars a month to spend. You can't afford a fancy car or a luxury downtown loft. Cut out unnecessary spending and control your expenses.
Cure number three is to make your money work for you.
The first two cures are about saving and spending wisely; the third is all about investing the 10 percent that you save into stocks, bonds, or real estate. Before you invest in something, you need to learn about it. You worked hard to save that money and overcame plenty of temptations not to spend it foolishly; Now don't lose it by investing in some product or industry that is just said to be the next big thing without a deep knowledge about it.
The fourth cure is to protect your wealth.
One of the keys to becoming wealthy is to minimize the risk that you will lose your money. To do this, surround yourself with those who have built wealth and kept it for long periods of time; spread your wealth into multiple investments rather than one small area; and finally, be careful when helping friends with finances.
Owning your own home is the fifth cure.
There are a lot of financial experts today who would say that this is out of date, but it is important to understand why this is one of the cures. If you are paying a thousand dollars in rent every month, you don't have much to show for it. If you are paying a thousand dollars on a mortgage, then every month the balance on your home decreases. If you do choose to purchase a home, it is wise to make sure that you put twenty percent down on a fixed mortgage. Also, by sticking with cure number two, make sure this payment isn't more than twenty percent of your monthly income. Living below your means includes your home.
Now, ensuring a future income is cure number six in this day and age.
This means that you need a retirement account. Compounding interest is the eighth wonder of the world for a good reason. Warren Buffett was quoted as saying, My wealth has come from a combination of living in America, some lucky genes, and compounding interest. If you have five thousand dollars in a savings account with five percent interest compounding monthly for ten years, you will earn over thirty-two hundred dollars just in interest. Now imagine that you continue to invest even a hundred dollars a month into that account over the next ten or twenty years. This is how retirement accounts are built and how you can always ensure that you have a future income.
The final cure is to Invest in yourself.
We live in an age of information. You can literally Google anything and have the answer in minutes. Courses on any topic imaginable are available online. By increasing your knowledge and skills, you will be able to earn more, make smarter investment decisions, and gain a competitive advantage in both life and business.
So in summary, the seven cures for a lean purse are: #1: Pay yourself first. #2: Live below your means. #3: Make money work for you. #4: Ensure against loss. #5: Our home is our biggest expense. #6: Have a retirement plan, and #7: Invest in yourself.
Now let's move on to the five laws of gold.
The first law of gold is similar to the first cure. Save 10% of your income.
Ten percent of your income needs to go into savings or smart investments. The fact that this is both the first cure and the first law of gold stresses how important it actually is.
Next, put your money to work.
Gold laboreth diligently and contently for the wise owner who finds it profitable. Employment multiplies even as flocks of the field. Saving 10% of your income is good, but putting that ten percent into interest-yielding investments is how real wealth is created.
Number three: building wealth is a long-term game.
You aren't going to start saving or investing today and buy a Ferrari tomorrow. Work hard to earn your money, be smart about how you spend it, and realize that slow and steady wins the race.
The fourth law Invest in what you know.
Gold slips away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keeping. As you start earning more money, you will have more to invest. You will find that everyone has advice on what to invest in. Many of them will have found investments that are right for them, but most of them will be wrong for you. Investing in real estate is great if you know the ins and outs of what makes a profitable piece of land, but if you and your team know nothing about it, you can easily lose large sums of money.
And the final law of gold is to avoid get-rich-quick schemes.
If something seems too good to be true, it normally is. This goes for most things in life, but money, most of all, can come and go quickly if you don't understand the laws of gold. Real wealth grows slowly over time and is never earned in a get-rich-quick scheme. Remember, ahead of you stretches your future like a road leading into the distance. Along that road are ambitions that you wish to accomplish and desires that you wish to gratify. To bring your ambitions and desires to fulfillment, you must be successful with money.
The richest man in Babylon teaches us to treat each dollar that we make as a worker that can help us make more money. It stresses the importance of earning, investing, and most of all, saving 10% of your income.
First and foremost, did you enjoy our summary of the richest man in Babylon? Would you like to recommend a book for us to read and summarize? Leave your ideas in the comments below, and we may pick yours to be our next book.
Lastly, before you go, hit the share button for your friends, whom you would also like to grab this book summary.
Don't worry, it only takes a second, and you can make it via WhatsApp.
You can also subscribe to our email list to be notified whenever we release a new book summary.
_1.gif)
