Blissful Reads · Finance / Money Matters

#MoneyBliss Timeless Lessons from The Richest Man in Babylon (Part 1)

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The Richest Man in Babylon is a book originally published in 1926 authored by George Samuel Clason. It discusses financial advice (or cures, per the book) through a collection of short stories set in ancient Babylon, narrated by the richest man in Babylon himself to men who wanted to be as rich as he was. Babylon was a major and wealthy ancient city which believed to have existed in 1894 BC. It was further believed that Babylon is one of those who first cradled civilization and finance.

I have only read the first part of the book. And while I am yet to finish it, it’s hard not to notice that the 7 financial cures the book tackled seem to be the foundation of any modern financial advice of today. Allow me to give you a summary of the 7 Cures for a Lean Purse (Bank Accounts, in today’s terms):

1. Start Thy Purse to Fattening. The first lesson one could learn from the book is that a part of all you earn is yours to keep. This is exactly what financial advisors mean when they say that we should always pay ourselves first, well, aside from tithe. These payments we regularly give ourselves become our savings. Saving money won’t be so hard anymore when we consider it like any other obligatory payments, like monthly bills. I opt to automate or deposit ASAP my savings to my designated bank accounts to prevent me from spending or borrowing it. There is no other way in which you can fatten your purse or bank books. It is only through saving. No matter how much you earn, if you just spend every peso and do not save anything, you can never have a fat purse or bank accounts.

2. Control Thy Expenditures. The only way to control expenses is through budgeting. Make a budget! That’s what all money doctors would tell you. Now, there are but unlimited ways to make a sound budget. You have to choose what kind of budgeting strategy suits you, your style and your family’s lifestyle the best. You can have a zero-based budget, allotting, say, 70% of your earnings for your expenses. In applying the zero-based budget, you should very well know your priority bills such as utility, food and other comparable expenses and pay them immediately once due (or before due, that’s better). All the rest you can allocate to a fun fund. I like this type of budgeting. It gives me more options and freedom. You can also do the traditional budget wherein your expected expenditures are already plotted and should be carefully followed for the next period or month. I find this too tight and too boxed, no flexibility offered, so, needless to say, I am not a big fan. The important thing is for you to have some concept of budget and the willpower to stick to it.
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3. Make Thy Gold Multiply. There is a slight difference in this stage from what today’s money experts would tell you. This particular step refers to investing your money so it could multiply. Saving won’t make you rich. No matter how much you save, it will never be enough, not even sufficient to cover inflation. Investing is the real key. But, before you invest, today’s’ money doctors would advise you first to safely tuck away an emergency fund and a couple of insurances. After those two, you are now deemed ready to invest. Investing is exciting, at least to me. The only problem I have is that I’m short of capital. Hehe. Investing is easier than saving money to be used for investing.
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4. Guard Thy Treasures From Lost. The book is not (yet) talking about insurances but it has predicted such industry and products. In the book, this means gaining enough knowledge before making investment decisions. It also gives importance to capital preservation. In today’s financial sphere, to guard our treasures would mean being insured.
 
5. Make of Thy Dwelling a Profitable Investment. In the book, it merely means exert all efforts to buy your own home. I believe in this. After our wedding, my husband and I decided to rent an apartment all to ourselves. After a year, we left the place with a heavy heart. From then on, I swore I would never ever rent a home again. Because I easily get attach to places where my loved ones and I made memories. That’s why I cried real hard when the owner and we did not agree on the purchase terms when the lease contract expired. Because I hate packing and unpacking. It is tiring and it damages my priced belongings. Because I hate waking up every day with a debt, in that case, rental obligations. I know that some would rather lease a residence to avoid costs of taxes and repairs. But, I’d gladly pay those fees in exchange for some sense of ownership and permanence, without fear of untimely or forced eviction. Besides, rental fees nowadays are expensive and it will only get more expensive with time.
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6. Insure a future income. In the book, it was predicted that life insurances would be invented in the future to help earners protect their earnings for their families in cases of untimely deaths and accidents. The book refers to this stage also as to gearing up for retirement age. A continuous income in the future when we are already retired is the ideal way to live a life of old age, right? We need not be dependent on our children or charity. We need to ensure a future income which would sustain our living.
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7. Increase Thy Ability To Earn. To increase our earning does not only mean finding a better paying job. It is more about harnessing our skills and broadening our knowledge so we would be experts in our own industries and professions. Never stop learning. Never stop reading. As we journey through the indefinite horizon, there are so many ways in which we can enlarge our territories (as per Prayer of Jabez). We should continuously seek a better version of ourselves. Better earning will follow the better us.
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That’s the summary of the first part of The Richest Man in Babylon. You know what I realized, this ancient knowledge which has been available for time immemorial has been capitalized over and over again by money experts, injecting modernity every time. Well, they are not to be blamed! This book still speaks the truth today and for the times ahead, I assume. If these golden knowledge have been around since Babylon or 1926 when the book was first published, at least, why are there still poor people in the world? Not only that, the poverty level is getting higher and higher, day by day.
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I realized too that it does not matter whether you subscribe or follow Bo Sanchez, Fitz Villafuerte, Warren Buffet, Francis Kong, Francisco Colayco or Robert Kiyosaki. If you do not have the strong personal will to live an abundant life, you will never have the riches the whole universe is willing to give you to experience such a good life, life God has promised to His children.
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So, I suggest, before you even jumpstart saving money. Put a strong personal will in place, one that is not easily shaken. It will be tested and re-tested a hundred times over as you go along this financial journey. In my case, my strong personal will for abundance stems from my children and my desire to be an instrument of God to extend His arms in helping people in great need.
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