I’m reading 52 business books in 52 weeks, and this week’s book was The Richest Man in Babylon by George Samuel Clason (thanks George!). Here are my biggest takeaways — 150 pages packed down into a 90 second read.
The 7 Rules of Money
- Start Thy Purse to Fattening: Make some money, or save some money. I prefer the first option, but if you immediately can’t do the first then do the second. The point is to watch the money build up – watch the coins stack – ASAP. This is great for your psyche, and will provide opportunity to invest wisely later on.
- Control Thy Expenditures: Don’t spend more than you make on non-money making activities. Simple. You can create a formula for budgeting that works for you, but get the simple version down before you get complex.
- Make Thy Gold Multiply: Invest! Invest in yourself, your business, or real estate. Why this order? Any investment in yourself is almost guaranteed to give a positive return. Buy that book, go to that seminar, take that course, hire that coach. Max this out every year. Then you’ll naturally start to make more money. Once you can’t spend any more on your own growth and learning, invest in your business / invest in your profession and occupation. If you own a business already, hire that new contractor or salesmen. If you’re still working a 9-5, work less hours and put more time into your business. Finally, invest in real estate or similar funds. My business is real estate, so I threw first second and third together into a killer combination.
- Guard Thy Treasures from Loss: Be wise, and don’t invest in what you don’t know. Don’t jump at the first deal you see. A parachute isn’t too open nor is it too closed. Be open to new opportunity, but don’t stray from your area of expertise unless you’re willing to become an expert in that field before investing.
- Make of Thy Dwelling a Profitable Investment: E.g. live buy a multifamily unit and live one apartment, rent the other apartment(s) for an amount greater than the mortgage. Make sure you have enough saved up to cover vacancies, repair, and property taxes.
- Ensure a Future Income: The average millionaire has 7 steams of income, so never put all your eggs in one basket. This point also means filling your pipeline as much as possible (and having as many pipes as possible!). Always have a new project in the works, a new investment to consider, and a new lead to sell.
- Improve Thy Ability to Earn: If you’re not constantly updating your skillsets and understanding of the world around you, you’re falling behind. Keep inertia on your side and maintain constant momentum to learn, try, and understand. Make learning a habit and watch your income and quality of life overall grow rapidly.
Fulfillment in Life is Very, Very Tough if You’re Struggling Financially
- It’s very challenging to live a fulfilling life without money
- The laws of money are like the laws of physics: surefire & unchanging.
- Money is plentiful for those who understand its laws.
- Always have money coming in that assures a full purse. AKA – always have a cash flow!
- “It costs nothing to ask wise advice from a good friend.” Alright, this one is huge. The world is full of wealthy, wise, successful people who are more than happy to give away their greatest “secrets to success” to anyone who’s willing to ask and lend an ear. When I was just getting started in real estate, I went to the top performers in my area and asked them how they did it. I literally copied what they told me to do, word for word. A decade later I flipped over 3,000 houses. Now I’m doing $20MM a year and not looking back. Thanks for the advice!
- This one relates back to Think and Grow Rich. The reason why most people never become wealthy is because they never truly commit to accumulating wealth.
- Pay yourself first. Everyone and everything will want your money — from Uncle Sam who wants another nuke to Uncle Sal who lost his job. If you don’t pay yourself first you’ll never understand where you money goes.
- You should save at least 10% of what you earn. More if you can afford to do so.
- Do not take financial from a mason (how about advice on taking over the world?). Instead, ask the experts for opinions on their field expertise.
- Build the fortune of a king before living like one. Don’t spend your money as soon as you earn it.
- Surround yourself with people who’ve mastered the laws of money and make lots of it. You are the average of the people you spend time with!
- Do not put your money in investments which do not pay a dividend. Again, it’s all about cash flow baby! Fill that pipeline!
- Don’t confuse necessary expenses with desires.
- “A man’s wealth is not in the coins in his purse. It is in his income.”
- Ensure a future income. Everyone gets old. Make sure your income will continue to work for you when you no longer can.
- Increase your ability to earn. Improve your skillsets, fill your mind with knowledge and train your hands with practice.
- The more we know, the more we may earn.
- You cannot arrive at the fullest measure of success until you crush the spirit of procrastination within you.
The 5 Laws of Gold
- Gold comes easily and in increasing quantity to the person who saves at least 1/10th of their earnings.
- Gold labors diligently and multiplies for the person who finds it profitable employment.
- Gold clings to the protection of the person who invests their gold with wise people.
- Gold slips away from the person who invests gold into purposes through which they are not familiar.
- Gold flees the person who tries to force it into impossible earnings.
- If you desire to help you friend do not do so in a way that brings their burdens onto you. There are many ways to help people. You don’t have to choose the ways that restrict your time, money, energy, or ability to care for yourself.
- The wise lender always has a guarantee of repayment should the investment go poorly.
- Above all you should desire safety for your money. Better a little caution than a great regret.
- Protect yourself with insurance. You cannot afford to be unprotected.
- Do not live beyond your means.
- No man respects himself if he does not repay his debts.
- The soul of a free man looks at the world as a series of problems to be solved. Meanwhile, the soul of a slave whines, “What can I do?”
- If you are in debt, live on 70% of what you make. Save 10% for yourself. Use the remaining 20% to repay your debts.
- Stick with the plan. Money accrues surprisingly quickly and debts are gone fast with discipline and consistency.
- Work attracts friends who admire your industriousness, along with money and opportunity. “Hard work is the best friend I’ve ever had.”
(post shared by jamescharlespaine)