In these harsh economic times, there are many people who believe that it’s almost impossible for them to get ahead financially.In fact, most people fail to recognise that it’s not really their lack of money that’s keeping them broke, it’s their lack of financial literacy that’s holding them back.
So where can you obtain an education on financial literacy?
One perennial favourite in the financial literacy library is George S. Clason’s masterpiece The Richest Man In Babylon. This book has been hailed as the “greatest of all inspirational works on the subject of thrift, financial planning and personal wealth.”
Let’s look at what Clason has to say about wealth creation in the chapter The Five Laws of Gold:
Law #1: Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.
Here we see the concepts of ‘pay yourself first’ and ‘save one-tenth of what you earn’ reinforced. This law explains that you don’t need a shortcut to wealth, because steady and consistent savings will earn enough interest over time to create a sizeable estate.
Law #2: Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
The law could be simply stated as “cash is king”. Your money will work hard for you when you take advantage of prudent opportunities to put it to good use. Clason emphasises that the owner must be wise in seeking avenues to invest this money.
Law #3: Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
Clason takes his investing lesson a step further by advising you to seek proper financial advice. The old adage “a fool and his money are soon parted” comes to mind as he declares that the careless owner of gold will lose it.
Law #4: Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
Stick to the areas in which you have some experience or talent, and don’t try to make your fortune where you lack knowledge. As Clason says, “The inexperienced owner of gold who invests it in businesses with which he is not familiar, too often finds his judgment imperfect, and pays with his treasure for his inexperience.”
Law #5: Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
It seems that the lure of get-rich-quick schemes will always be with us, and the end result will unfortunately always be the same.
Clason points out that these laws of gold are not hidden secrets, but “truths which every man must first learn and then follow.” Will you take heed and abide by his advice?
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