Lessons learnt from the Book, the Richest Man in Babylon
The Richest Man in Babylon is a 1926 book by George S. Clason that dispenses financial advice through a collection of parables set 4,097 years ago in ancient Babylon. The book remains in print almost a century after the parables were originally published, and is regarded as a classic of personal financial advice
The story is around a fictional character called Arkad who was a poor scribe that became the richest man in Babylon.
The book chronicles how practical money management and wealth-building lessons were used by Arkad, who had a humble background as a son of a merchant but grew to become the richest man in the ancient city of Babylon. Arkad achieved this feat by riding on the wisdom he gathered from the rich money lender called Algamish
The book has been revealed to be the financial revelation to many readers across the globe and here are a few of the lessons that were shared in the book.
Pay yourself first
This world is a place where many want to spend on their desires and ambitions first which isn’t bad, but we forget the most important aspect, paying ourselves first.
The book advises that we set aside at least 10% of our earnings and save it for either investment, emergency or a project.
It may differ for many other people depending on their financial discipline, structure, project and goals as well.
Live Below your means
Be mindful of how you spend, most people spend to please others, some spend on things that aren’t necessarily needed, one can have a scale of preference and prioritize things that are urgent, important more than other wants that don’t necessarily need to be taken care at that moment.
Make your money grow and work for you
The money that has been saved shouldn’t just be kept unattended to, because inflation happens and there is the time value of money, a penny this year won’t be able to buy the same worth of goods next year, money not attended to depreciates.
The best way to make your money grow is by investing into real estate, mutual bonds, stocks etc
Protect your wealth from potential risks
Invest in an asset that provides financial risks, insure your assets so that you don’t get to pay fully for them when they get missing or demolished, another way to reduce cost and risks is by sharing the financial burden with someone else, in business it’s called limited liability. In insurance it’s called underwriting, try not to take much of the risk in a high risk investment.
Ask knowledge
Seek knowledge and advice from experts, invest in yourself so that you can increase your earning capacity, go for seminars, get books, videos, buy courses on wealth generation, understand how the financial market works. Don’t make reckless decisions when it comes to buying or investing, diversify your portfolio as well.
Here are the lessons learnt from the Book, which one stood out for you and how would you apply them?
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