Every day we wake up and put ourselves to labor because we want to make our lives better by accumulating more money and consequently more wealth. The fact is that the rules that governed money and wealth accumulation in the ancient days are still applicable in today’s world. In this book, The Richest Man of Babylon, George Clason states the basic rules in developing your own empire.
Below are seven key lessons that I picked from the book.
Pay yourself first.
The money that you receive after hard working is not yours. It goes to house rent, transport etc. At the end of the day, you may end up with nothing. In the same way you allocate money to cater for your bills, you should also set aside money to pay yourself. Take at least 10% of your total earnings and pay yourself. This money is what you channel to your savings account. It doesn’t matter how little you earn. Your expenditure has to fit within the remaining 90%. With time you will have a considerable amount.
Control your expenditures
I know some of you will say that I earn so little therefore I am unable to save anything for now. The truth is, if you are not able to save with the little that you have, neither will you able to do it when you earn more. Why? Because what we call ‘necessary expenses’ will always grow to equal your income. Men are all burdened with more desires than they can gratify. Therefore you need to write down everything that you need to spend on. Select the ones that are necessary and the ones that are possible though the expenditure of the remaining nine-tenths of your income. Cross out the rest. Like a bright light in a dark cave your budget shows up the leaks from your purse and enables you to stop them.
Invest Your Money
A man’s wealth is not in the coins he carries in his purse. It is the income he builds, it’s the golden stream that continually flows. Now that you have been saving a tenth of your earnings, you must put each coin to laboring so that it can multiply and bring in a stream of wealth.
Only Take Advice From an experienced person in a particular field
Advice is one thing that is freely given away, but watch that you take only what is worth having. You cannot trust the knowledge of a brick maker about jewels, neither can you go to the bread maker to inquire about the stars. If you need advice about jewels, go to the jewel merchant. If you would know the truth about sheep, go to the herdsman.
Guard your treasure from loss
Guard your treasure from loss by investing when the principal is safe and where it can be reclaimed if need be. Consult with the experienced people in that field and let their wisdom protect your treasure from unsafe investments. Some opportunities might be tempting but do not be misled by your own romantic desires to make wealth rapidly. Before you entrust your treasure in an investment in any field, acquaint thyself with the dangers. Do not be too confident of your own wisdom in entrusting your treasures to the possible pitfalls of investments.
Insure you future
Provide in advance for the needs of your growing age and the protection of your family. Make preparation for a suitable income in the days to come, when you are no longer young. You should also make preparations for your family should you be unavailable to comfort and support them.
Increase your ability to earn
Cultivate your own powers to study and become wiser, to become more skillful and to respect yourself. This will give you confidence in yourself. Good luck waits to come to the man who accepts opportunity. Don’t sit back and dream that things will automatically change without making an effort.
Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver – Ayn Rand.