|Today, I want to share with you valuable content from the book “the richest man in Babylon”. I first read this book two years ago and it made such a big impression on me especially because of the very simple way the book is written. I was so amazed by this book that I wanted to share it with my loved once and gave the book to my sister to read as she was struggling with her personal finances.
I hope the content will be also helpful for you.
The book is about Arkad, who was famous for his wealth and generosity. In fact, Arkad was the richest man in Babylon. His friends, who went to the same school as Arkad and had a similar upbringing on the other hand were struggling financially. So, one day his friends and some more people from Babylon gathered together to learn from Arkad.
Below are three lessons Arkad taught them:
1) First lesson: Pay yourself first (“Start thy purse to fattening”)
Arkard told his friends that they should set aside every month 10% of their earnings as soon as they get the pay. He explains that they can live very easily with 90% of their income instead of 100%. Immediately, his friends started to complain that they can’t save 10% as they have nothing left at the end of the month. So Arkard asked each single person who was listening to him how much is remaining at the end of the month. Each of them replied zero, at the end of the month we have nothing left from our pay. So, said Arkard you all are saying that you have zero left? They answered yes that is true. Arkard continued, isn’t it true that each of you has a different salary but surprisingly each of you has the same amount left at the end of the month. Indeed, answered his friends.
What this only means is that friend 1 has a salary of less than friend 2 but both are spending everything they earn. In other words, the more someone earns the more will his expenses increase and at the end nothing is left to save. In other words, it does not depend on how much someone earns but how much you keep! So keeping track of our expenses and not increasing our expenses each time we get a better pay is crucial in building wealth.
2) Second lesson: Make the money work for you (“Make thy gold multiply”)
The Second lesson, Arkard taught to his friends was that they need to put each coin that they save to work so that in can reproduce more coins. This will help to bring more income and a stream of wealth will constantly flow in.
This is nothing else as the passive income stream that we so often hear nowadays.
However, Arkard also told his friends about first investment experience. Arkard, did not due do enough due diligence when a business man came to him and asked him to invest his savings in him as he had a great business idea which would make Arkard wealthy. Arkard invested his money and lost everything. So, for this advice it is very important to do enough research and only invest as much as you can afford to lose and after having done enough due diligence to avoid the risk of losing your investment.
3) Third lesson: Invest in yourself (“Increase thy ability to earn”)
The next lesson, Arcard taught his friend was that there will be times when some great opportunities will knock at their door to attract fortune. He says that the “goddess of Fortune” is eager to help those who please her. People who actually “DO” please her rather than merely talk or are involved in wishful thinking. It is ACTION that will lead you to the path of success that you desire.
However, in order to make use of the opportunity when it occurs you need to be prepared. Investing in yourself through reading, seminars and so on is one of the best investment and preparing yourself to grab opportunities when they occur.
I hope you liked the three lessons shared from the book “the richest man in Babylon” . Actually, there are 7 lessons in the book and if you are interested I encourage you to read the whole book. It is a very small book so even suitable for non-big readers.