Most people want to be rich and wealthy (at least I do).
But only a few know how.
And actually, there are no secrets in becoming wealthy.
Make more money, save more money, invest more money, and many other common stuff people talk about.
But why most people live paycheck to paycheck? You’ll find the answer below.
Anyway, The Richest Man in Babylon by George Samuel Clason is a must have for people who want to be rich and live a financially independent life.
I absolutely love this book since it teaches us about finance in a way that most people love—through a story.
I’ll use the term ‘gold’ and ‘coin’ in this post to simplify the ideas (and to honor the way the book was written).
1.Everybody earns different amount of income, but yet most of them managed to spend it all each month.
What does that means? Does this means that every body can’t keep their money?
Well, yes, but there’s more than that.
It means that some people spends more than the others.
It also means people’s expenditures are not based on their needs, but rather their own desires.
2. Save a minimum of 10% of your income to make sure you have an emergency fund.
When we got paid (or earn money), quickly save 10% and keep it secure.
In time, our pockets will be filled with money we save.
Most people spend money first to pay their bills and satisfy their needs, only to find out that they have no money left to be saved.
Save first, then spend the rest to live a joyful life.
3. If you have debt, take another 20% of your income to pay for it each month.
In case you have debt, consider to set aside 20% of your income every time you earn money to pay your debt.
This way, you can make sure that your debt is going to decrease every single month consistently.
In this modern world where our debt are based on the time we pay them, paying debt has never been far more important.
4. Budget your life so you can live with only 70% of your income (or 90% if you don’t have debt).
Remember the #1, we all earn different amount of money, yet most of us successfully spends our income completely.
Let’s say you earn 10 gold coins each month.
If you like most people, you would spend all 10 gold coins each month.
You will say that your income is not high enough for you to set aside some to keep.
You’ll say that you need 11 gold coins each month so you can keep 1 gold coin each month.
But when you get a raise, that 1 gold coin you promised to keep is also gone.
You see, when a man earn gold coins each month, no matter how many they are, they will spend all of them if he don’t have a solid plan.
Now let’s say there is another man who earn 7 gold coins each month.
He also spend all of his gold each month.
That means he spend only 7 gold coins each month.
Why don’t you—a man who get 11 gold coins each month—learn from him, how to live with only 7 gold coins a month?
That way you can save 4 gold coins each month, right?
Budget your life, live below your means, and save your money first every time you get paid.
5. Make your gold multiply by investing a certain amount of your income in a profitable business.
After you paid all of your debt (or if you have an extra money to spend on), it is time to make your gold multiply.
Let’s say you earn 10 gold coins each month and you don’t have any debt.
Set aside 1 gold coin to be saved, 6 gold coins for monthly expenditures, and the rest (3 coins) to invest in a profitable business.
Or if you have debt, the plan will be like this.
Set aside 1 gold coin to be saved, 2 gold coins to pay debt, 4 gold coins for monthly expenditures, and 3 coins to invest in a profitable business.
In a few years, with good guidance from experts, your gold will multiply and make you happy.
6. Never ever get into a business you know nothing about even if you know someone who does well.
This is one of the problems faced by many beginner investors.
You get so many offers to invest in so many different businesses.
They all claim to be profitable and secure.
Even some of your friends or families are already into it and enjoyed the profits.
However, don’t ever spend your money investing a business you know nothing about.
It’s risky, and although turn out to be profitable, in the long run it’s bad for your decision making habit.
Sure, you might get a profitable investment, but consider yourself lucky, for men who know nothing are usually the subject of scams, frauds, and tricks.
Learn more about the business first.
Take your time, analyze carefully, don’t rush.
7. Protect your gold from losses.
Put your gold coins where you know it will be nothing but safe.
Don’t put all your eggs in one basket, said someone very rich (I forgot who he is).
Make sure you’re investing in a known and reputable business.
Don’t gamble, and keep your gold safely in banks or in a form of secure investment.
8. If it’s too good to be true, then it usually is.
I was scammed years ago, thinking I could get rich fast by investing in a business that promised to let me have 20% monthly profit of my investment.
Yes, you read that right, 20% each month for every gold I lend him.
The first few months he send me (and other people) the profits.
Quickly I add more money so I can get more profit faster.
Alas, not long after I inject more money, he was gone.
Turns out I just found that I (and other people) were scammed using the Ponzi scheme.
To think about it, a guaranteed 20% per month is really suspicious, right?
If he can let me have 20% each month, logically he must be making so much money that he would not need any more additional money from people for many months.
He would just need maybe a few months to get all the capital he needs to expand his business.
But I was young and emotional when it comes to gold making.
9. Learn more to earn more.
This is the reason why people go to college, so they can get paid more.
If you’re not satisfied with your current income, learn more so you can provide more value to your employer or your customer.
That way you can charge more money and make more money.
Learn how your superiors do it, learn how the successful merchants do it, learn how the best craftsmen do it.
10. Be patient.
This is also where most people fail.
We do something and we expect the results to quickly appears before us.
Good things takes time to build, including our wealth.
Sure, there are a few people who manages to make a fortune quickly and haven’t lose their fortune until today.
But they are outliers, and if you’re like most people, you need a solid plan and strategy to build your gold empire.
Most people become a millionaire in years, not months.
Those who won lotteries usually ended up losing their gold really fast for they don’t know how to keep their gold and multiply it.
Should You Buy This Book?
Do you want to be rich and wealthy?
If yes, buy this book. It’s a must.
Do you want to be ‘just financially independent’?
If yes, also buy this book. You’ll be free of debt and be able to retire early.