Money Matters: 2 Lessons from the richest man in Babylon

While we were kids, we were subconsciously made to see rich people in a negative light, we tend to believe they are wicked and selfish simply because they are strict with spending. Now, that we are adults I believe our perception of that matter may have changed a little bit. Money has is sets of rules, and if you follow these rules, I believe it will put you in a better place, financially.

Image - Pixabay CC0

I love the classic book “The Richest Man in Babylon” simply because of the financial lessons it offers. Today we will be looking at some of those lessons from the classic, and how we can apply them to our everyday life, with the hope of altering our lives for the better. Money is an essential resource that all should possess. Unfortunately, capitalism doesn’t reward all for doing little to anything, it rewards the few that are able to provide value.

In this post,t we will talk about some crucial financial lessons from the book “The Richest Man in Babylon” and how we can leverage these sets of rules in creating a better life where we are financially free.

Control Thy Expenditures

This is an important item that one must master in order to become financially free, you must compress your expenditure (which means money being spent). If your income is $100 and your expenditure is $100, you are basically broke. If your income is $100, and your expenditure is $60, you’re middle-class, as you have a little disposable cash. But if your income is $100 and your expenditure is $20 it doesn’t mean you are rich, it means you have disposable cash, that if properly invested, can make you rich.

The key point here is to reduce and control your expenditure, by all means, always have disposal cash for lurking opportunities and investments. And to be able to maintain a lean expenditure lifestyle requires a lot of discipline and planning, details is the name of the game, every penny must be accounted for. And at the end of the day, the result will always speak for itself. Which will be more resources available at your command to engage in whatever you want it to engage in. That is what I call financial freedom.

Make Thy Gold Multiply

Anyone that hopes to be financially free must have a diversified portfolio, that ensures the future of certain income regardless of the political or economic situation of one’s location. The disposable resources you realise by controlling your expenditures will be put to good use by multiplying them in search of bringing in more gold. That it is great to have disposal gold that one can employ in a diversified portfolio, that will translate to more gold coming into one's chauffeurs. The money game has rules, and this one of the most important rules of money one can possibly learn, which is to have many streams of income.

This is one of the surest ways to become rich, by investing the excess $80 you realise, after spending $20 from your income on expenses, you invest the remaining $80 on a worthy endeavour. It is not just enough to earn from multiple streams, it is also very important to protect one’s investment from loss. This is also an important piece of advice. Protect your investment from loss by all means.

References

IWTYTBR - Back to Basics: Lessons from the richest man in Babylon

Entreprenuer - 7 Timeless Lessons

Thanks for you reading!