The Richest Man In Babylon is a fictional story with sound principles that have helped people become wealthy through their application. This first part comes from the part of the book “Seven Curses For A Lean Purse”. Heed the advice in each of these sections, and your “purse” will become fat and overflowing with wealth.
These principles will take time to follow, but the principles are easy to follow. The key here is to be honest with yourself. The first thing you need to understand and accept is that you need to pay yourself first. Without paying yourself first, YOU WILL NOT BE WEALTHY.
First and Foremost Pay Yourself First
The first thing you have to realize is that when we make money, we have our lifestyle accommodate what we earn. If you think about it, that will reduce your chances of not only getting wealthy, but staying wealthy. It’s easy to do something one or two times, but consistency in your actions is crucial for your success. The main take away, and there’s a lot of things you’ll learn from The Richest Man in Babylon, is that you need to pay yourself first. Pay yourself 10% of all that you earn and NEVER touch this money to spend on ANYTHING, not even emergencies. This money will breed more of itself, and will make you rich.
1 – Find Work First
I’ve read plenty of books about money, and their common theme was saving money. Don’t spend more than you earn and make sure you put money into savings. This is good and all, but the problem is what money are you saving? Where are you getting this money to save if you aren’t making any? The answer is simple—work. Find work and do the best you can at keeping that work. It doesn’t necessarily have to be your dream job, but it does have to be a job. This is the start because with this foundation, everything you’re about to read will stem off of it to make you wealthy.
2 – Control What You Spend
The first part of overcoming a problem is acknowledging you have a problem. In today’s society, it’s so easy to spend money which you don’t have. This is a wealth killer and something you’ll have to admit immediately if you want to build wealth for yourself. Even if you think you’re not spending more than you earn, just admit it and move on to the next step.
3 – Make Your Money WORK For You
You’re saving 10% of your income and you need to put this in a vehicle to make it grow. What investments can you put your money into that will ensure that it breeds more of its kind? There’s real estate, startup companies, stocks, the list goes on. You need to study where your money should just as hard as you work for your money. Even if you have $100, you worked hard for it, so don’t throw it at something without taking serious thought on where your money is going.
4 – Investigate Your Investments
You wouldn’t seek financial advice from someone who is constantly taking out loans to feed their family; so you shouldn’t have to trust your money with people who don’t specialize in money-making activities. Stand on the shoulder of giants is my favorite idiom because it instructs us to learn from those who’ve already learned how to do something. Seek advice from investors, financial advisors, real estate investors, successful CEO’s to know where your money should go. Learn from everyone that you possibly can, weigh out the risks, and make a decision. You’re about to invest your “babies” to grow up and make more “babies” for you. Meanwhile, you’re working at your job, saving 10% of all that you earn, and putting that money to work.
Word of caution: Don’t forget to diversify your investments. If one investment goes south, you’ll at least have back up investments to protect yourself from losing all of your money. Losing money is inevitable, so diversification is nonnegotiable—DIVERSIFY
5 – Buy A House
Buying a house is the most overlooked investment option there is. You’d be surprised by how many people don’t know they can qualify for a home that is equal to or less than what they’re paying for rent. When you rent, you don’t get you money back. When you buy, you’re building wealth into your future and your home becomes an asset you can cash out later.
Talk to a lender today to see how much you’re able to qualify for. Also, if you have a job—any job that’s W2—it’ll be so much easier to qualify for a home instead of being self employed.
6 – Insure Your Assets
You need to protect your assets by getting proper insurance on your life, home, business, and investments. Anything can happen and insurance will save you in that time of need. Treat your insurance as you would an investment—because it is—and do all of the research you can. Life insurance is one of the most overlooked insurances there is and yet it’s probably some of the cheapest there is that covers your life and those in your family.
7 – Always Be Learning
Learn as much as you can because you’ll be guaranteed to earn a profit in one of two places—monetary profit or intellectual profit. Both will ultimately lead to more money to make you wealthy. This not only applies to your occupation or career, but it also applies to life and maturity in wisdom. Pay your debts as quick as you can. Interest is the hardest thing to overcome and most people are paying minimum payments on their debts which is mostly paying the interest. This is how you become poor.
Watch over your family and make a will. Your riches have no point if you and your family cannot benefit from them.
And lastly, there’s no better way to learn than to serve those who are less fortunate. You have been given a gift to become wealthy and rich beyond measure, help others along the way your life will have an abundance of joy knowing that your riches are used for good.