The Richest Man in Babylon is a book by an American author George Samuel Clason. This financial self-help book is a collection of moral stories set in ancient Babylon. The book was published in 1926. I found the lessons in the book inspiring and relevant for myself and anyone who is seeking answers to financial management.
Summarizing the main lessons from the book below:
Saving
For every ten coins thou placest within thy purse take out far use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul.
Save at least 1/10th of what you earn.Budgeting
Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify `thy worthwhile desires without spending more than nine-tenths of thy earnings. That what each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.
Do not spend more than 9/10th of your earning. In case you have taken debt/loan, this amount will further reduce to 7/10th as mentioned below under Paying off debt.
Investing
Put each coin to labouring that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse.
Invest your savings in instruments which provide you regular passive income.
Managing risks
Guard thy treasure from loss by investing only where thy principal is safe, where it may be reclaimed if desirable, and where thou will not fail to collect a fair rental. Consult with wise men. Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments.
Do not invest in instruments which promise unrealistic returns(chit funds, fake lottery etc.). Also, its better to take the advice of experienced financial advisers instead of getting lured into traps and losing your hard-earned money.
Insuring
Provide in advance for the needs of thy growing age and the protection of thy family. It behooves a man to make preparation for a suitable income in the days to come, when he is no longer young.
Medical and term-insurance are a must have to ensure the financial stability of your family in case of an emergency.
Increasing capacity to earn
To cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself. The more of wisdom we know, the more we may earn.
Invest in yourself to increase knowledge, skills, and wisdom. Your earnings(salary, profits etc.) will increase in accordance.
Paying off debt
Out of my earnings my ‘debts shall be paid. Therefore each time the moon is full, two-tenths of all I have earned shall be divided honourably and fairly among those who have trusted me and to whom I am indebted. Thus in due time will all my indebtedness be surely paid.
An amount not less than 2/10th of your earning should be kept aside for paying off your debts/loans.
The five laws of Gold(money)
1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that or his family.
2. Gold laboureth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
4. Gold slippeth 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 keep.
5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
What are the lessons that you find most interesting and relatable? Please share in the comments section.
No comments:
Post a Comment