In 1926, George Samuel Clason published the book The Richest Man in Babylon and has become a classic in financial literature. I first encountered this little book about 3 years after i got out of Secondary school in Ajegunle and was blown away by the simplicity of the story and by the tried-and-true lessons it presented for accumulating wealth.
The story sprang from the characters Bansir who was a chariot builder and Kobbi who was a musician. The two had become the best at their craft but yet had no money and were poor. They went out to seek the advice of their childhood friend Arkad who in contrast had grown very rich and amassed fortunes.
Below are lessons in this book that has helped me and many others become financially stable and wealthy and I believe these lessons will help all of us on The Billionaire Realtors Group platform to build firm financial foundation on our way to becoming the richest person we can become.
1. Pay Ourselves First ( “Start thy purse to fattening.”)
The book recommends that we pay ourselves 10% of all that we earn. For every money that we earn, 10% should go to pay the person you see in the mirror every morning. The difference between rich financially stable people versus poor broke people is knowing this first rule.
2. Live below our means
(“Control thy expenditures”)
The best advice to becoming wealthy is to keep expenditures down even when our earning power increases.
3. Make our money work for us. (“Make thy gold multiply”)
”…put each coin to work so that it may reproduce its kind even as the flocks of the field and help bring to you more income, a stream of wealth that will flow constantly into your purse.”
There are many ways we can invest our money such as stock markets, *Real Estate*, businesses, and so on. We must do our diligent effort to find great investments so we ensure our money will multiply and work for us.
There are many investment vehicles we can tackle but the best thing we should all be aware of is that we should never invest in anything we do not completely understand.
4. Insurance protects our wealth. (“Guard they treasures from loss.”)
We should all consider buying insurance now in case we need it if something happens. This is a proactive approach and one we should take and not forget. The idea is that we will never have to use the insurance but in case something does happen we are protected financially from the loss it would have caused.
5. Our home is our biggest expense. (“Make of they dwelling a profitable investment”)
I know that many think their homes are an investment but the truth is it really is not. It is an expense and a very high expense at that and one we must manage carefully. I believe the lesson we can learn from that is that we need to ‘live below our means’ and buy or rent a home we can comfortably afford.
6. Have a retirement plan. (“Insure a future income.”)
The younger we can start putting money away for our retirement the better. When we start putting money away for retirement early we take advantage of a magical thing called ‘compounding interest‘.
7. Invest in ourselves. (“Increase thy ability to earn.”)
The best way we can increase our earning is by investing in ourselves. We can do that by continually learning and striving to develop ourselves. We are now in a very exciting time: the Information Age where knowledge is literally within our fingertips thanks to the Internet.
8. Track Our Wealth. (Know where you are and where you are going.)
There is a big difference between wealthy people and those who are not, wealthy people know their net worth while the poor do not pay particular attention nor care at all about tracking their assets and liabilities.