Lessons From the Book "The Richest Man in Babylon"

The book,"The Richest Man in Babylon"written by George Clason was written with ancient Babylon as it's setting. It tells of a man named Arkad, who was regarded as the richest man in Babylon.

I found  this book so outstanding in simplifying issues related to the most sought-after, but often misunderstood subject-money.

Like any man seeking perfection amidst his imperfections, Arkad learned how to grow wealth through many life lessons, sometimes painful ones that later on made him a wise warden of the treasures of that ancient kingdom .

Arkad offers "seven cures  for a lean purse (or wallet, in the modern sense.)  The following were Arkad's seven cures:

The First Cure - Start Thy Purse to Fattening

A fat purse is simply, a full purse. Arkad simply emphasized that we must save a portion of what we earn so our purse, or wallet, can fatten.  He illustrated that one must save one tenths of what we earn, or simply put one egg out of ten eggs must be set aside. Looks,or sounds difficult? Yet this is the only way. His students debated that it's very difficult to save when one's income is not even enough for the whole month to spend. "A tenth of your income is yours to keep"said Arkad.

The Second Cure - Control Thy Expenditures.

Sounds familiar? Even in ancient times the issue on uncontrolled expenses is as relevant as it is today.Some of his students asked: " How can a man keep one-tenth of all

he earns in his purse when all the coins he earns are not enough for his necessary expenses?" Arkad emphasizes that our so-called "necessary expenses"will always grow to equal our incomes...."

It boils down to prioritizing what is "want"and what is "need". Arkad emphasized that even he in his riches, does not satisfy all his desires. In short, the common advice of not spending more than what you earn.

The Third Cure - Make Thy Gold Multiply

Aside from setting aside a part of one's income, and controlling one's expenses, one must also strive to add from what he is currently earning so he could build up wealth as years go by so that when one loses the ability to earn, he will have something to go by in his old age. Arkad talks about his gold bearing children and letting their children's children earn money for him in the long run. This is done by investing part of what you saved. In modern times one can do this by investing in a new business or investing in stocks. Some call this passive investment, or investment in the long haul.

The Fourth Cure - Guard Thy Treasures from Loss   

These statements are as relevant today than when it was said thousands of years ago:

"Misfortune loves a shining mark. Gold in a man's purse must be guarded with firmness, else it

be lost. Thus it is wise that we must first secure small amounts and learn to protect them before the 

Gods entrust us with larger." So spoke Arkad upon the fourth day to his class.

"Every owner of gold is tempted by opportunities whereby it would seem that he could make

large sums by its investment in most plausible projects. Often friends and relatives are eagerly entering 

such investment and urge him to follow.

Many people who already made it big suddenly eat dust because their wealth, which was built up for several years were suddenly wiped out due to wrong business decisions. Wrong investments, wrong people to handle, or simply a strike of bad luck.

The Fifth Cure - Make of Thy Dwelling a Profitable Investment

Then as now, it has been regarded that it is best to own one's house (or dwelling as Arkad pointed out) where one can do things he cannot do in a rented place. Arkad puts it clearly:

"To a man's heart it brings gladness to eat the figs from his own trees and the grapes of his own

vines. To own his own domicile and to have it a place he is proud to care for, putteth confidence in his 

heart and greater effort behind all his endeavors. Therefore, do I recommend that every man own the 

roof that sheltereth him and his".

The Sixth Cure - Insurre a Future Income

In the olden days, one can just leave money to a money lender and come back to collect earnings from it. Not now where even big time scams are masquerading as decent business. Simply put, Arkad empahsized the need to prepare for sunset days, when one can no longer have the strength to carry out a business. He put this more clearly as he says: 

"This, then, is the sixth cure for a lean purse. Provide in advance for the needs of thy growing age and

the protection of thy family."

The Seventh Cure - Increase Thy Ability to Earn

One;s ability to earn  must not be static. He must level up, to catch up with the times. If one is a speaker, update his skill by attending seminars or reading literature about public speaking. In short one must always attune with the times so that, as Arkad says, one must not be "left out".

Whoa! Í'm done. I hope I have shared my knowledge on personal finance improvement. My advice: Don't rely on my advice. Seek the advice of those who made it big in the business. Go get a mentor. Locally, one can get the wisdom of Bro. Bo Sanchez, DEan Pax Lapid, Fitz Villafuerte, Laurent Dionesio and many other financial educators. If you prefer Bo Sanchez and his unorthodox way of preaching Christian values by chaning our paradigms about money, you can check it here : http://goo.gl/XClwh5. You can check his free e-book "My Maid Invests in the Stock Market....."

Have a good day!