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The Richest Man in Babylon is a 1926 book by George S. Clason that dispenses financial advice through a collection of parables set 4,000 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.
- “Start thy purse to fattening” – Pay yourself first
Learn to see the value of your work, and place a priority on paying yourself first. By creating a simple system to allocate where your money gets spent, you stand a good chance of buzzing your wallet. Here’s a simple system you can practice.
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- 10% = Pay yourself first.
- 10% = Pay debts (start with most small, expensive, high interest debts first).
- 10% = Future savings.
- 10% = Generosity (charity, church tithe, non-profit organisations etc.)
- 60% = Living expenses, including mortgage.
- “Control thy expenditures” – Live within your means
Don’t spend more than you make. Either spend less, or earn more. Be clear on the difference between a desire and an expense. Resist the habit of spending more as we earn more. Just because our income might increase, doesn’t mean our spending should.
- “Make thy gold multiply” – Make money work for you
Understand compound interest, and how you can benefit from it. There are many investment vehicles, choose the one you understand the most. You may also consider opening an online high interest account, that you can’t access with a ATM card. Set aside part of your income for short and long term Investments.
- “Guard thy treasures from loss” – Safeguard your wealth
Have a variety of insurance policies, income protections etc. Creating financial reserves or emergency funds is a good way to stay financially disciplined within your budget. Seek advice from people who are experts in their particular field, people who have actually experienced what you’re attempting to invest in.
5. “Increase thy ability to earn” – Invest in your personal development
We live in a very exciting time: the Information and Innovation Age. Knowledge is literally at your fingertips, thanks to the Internet. Strive to become wiser and more knowledgeable. We must practice to often set aside part of our income for our personal development.
