Money May Is Here!
Happy New Month! I recently read ‘The Richest Man in Babylon’ and as we are now in Money May, this is the perfect time to share my lessons...
Happy New Month!
I recently read ‘The Richest Man in Babylon’ and as we are now in Money May, this is the perfect time to share my lessons. The Richest Man In Babylon was written in 1926 by George Clason, it is a book of timeless personal finance principles, told in the form of short stories based on the “Babylonian parables”. At its peak, Babylon was the wealthiest city in the world, which Clason attributes mainly due to the relationship its people had with money. The book uses stories of characters from Babylon to illustrate the importance of our relationship with money and the basic principles for acquiring, keeping, and earning money.
The book covers 7 simple rules of money:
1) Start your purse to fatten: save money.
2) Control your expenses: don't spend more than you need.
3) Make your savings multiply: invest wisely.
4) Guard your treasures against getting lost: avoid investments that sound too good to be true.
5) Make your dwelling place a profitable investment: own your home.
6) Ensure a future income: save/invest for the future.
7) Increase your ability to earn: strive to become wiser and more knowledgeable.
My main takeaways :
Pay yourself first - this isn’t as easy as it sounds. With rising cost of living and inflation, it’s easy for you to be left with practically nothing after paying all your bills. The Richest Man in Babylon suggests that before you spend anything, pay yourself 10% first so to ensure you have something to show all of your hard work. It doesn’t have to be 10%, it can be more if you wish.
Men of action are favoured by the goddess of luck - you have to take action in life. A procrastinator and a doer are both faced with countless opportunities. However, only the doer is going to exploit the opportunities given and therefore has more chances to succeed. It’s not really about being lucky, it’s more about taking action and creating more chances of success for yourself.
Wealth is not a matter of income - everyone earns differently, some more than others, but someone who earns less can have more wealth than someone who earns more just due to their financial habits and disciplines. Earning more money doesn’t necessarily mean more income if you’re constantly increasing your costs of living.
Make money work for you - the Richest Man In Babylon touches on the importance of passive income. The money you save and invest become your slaves. They will work for you and multiply as time passes. There are a lot of ways to get your money to work for you but you have to do your due diligence and invest it wisely.
Here are a few quotes to ponder:
“Where determination is, the way can be found.”
“The more wisdom we know, the more we may earn. That man who seeks to learn more of his craft shall be richly rewarded.”
“Good luck can be enticed by accepting opportunity.”
Although the book was written in 1926 and is based on stories from 3000 years ago. Its lessons are still very applicable today. Financial success is a soft skill. How you behave is more important than what you know. It is important to build and practice financial habits. Wishing you all a fruitful Money May!