The Richest Man in Babylon is a book by George S. Clason first published in 1926. This book contains the story of a man in ancient babylon, who became the wealthiest person in babylon at that time. The principles discussed in this book will help you save money and become a wealthy person.
In this article, we are going to look at 5 Key Lessons from the Richest Man in Babylon.
You work hard to earn money for a living. Some people get a salary at the end of the month and some people make money through business. However. Many people start to pay others as soon as they get money.
You pay for food, bills, cars, homes, . Most of you end up paying all the money to other people even though it’s used to buy things for you.
So you can’t get rich as you pay everything to others regardless of how much you earn. You will have to work for the rest of your life to keep earning.
Assume that you pay yourself every month. But you can’t become rich by keeping the savings in a bank account. The value depreciates over time
In order to become rich, your saving should earn for you and the earnings of those savings should also earn for you. So, you should invest the money in something that will earn you money through interest or profit.
Let’s assume you bought a car, hired a driver and use it for Uber. Then, the car you bought from your earnings will earn more money for you without any effort from your end. The money you earn from the car should be also invested in something that earns more money.
But most of you will save money, buy a luxury car and use it for your personal work, adding more expenses to your income.
Assume you paid yourself and ready to use the savings to earn more. You will need advice in case you are not aware of potential sources that will provide a good return for your investment
When you have money there will be lot of people around you suggesting how to use that money to earn more. Some people will advise based on what they think or what others told them. Some people will advise in a way that benefits them
No matter how good the opportunity is, you should first check if the person giving advice has experience and got results in the field that he is advising on.
Assume you have saved lots of money and used it to make more money by investing it on a person, product or a service. After some time your bank account will be healthy and you will feel that you are a wealthy person.
But money in your bank account is temporary. Assume you that you are diagnosed with cancer and needs lot of money for your treatments or everything you own is destroyed from a natural disaster. You can lose everything you have in just minutes.
Being wealthy is having automatic income streams that continuously brings cash into your bank account.
Assume that your bank balance becomes zero today. Do you have income streams or things that you can do to earn enough money for next month? Then, you are a wealthy person.
Assume that you saved money and found where you want to invest the money. The next thing you want to check is whether your investment is safe and you can get it back when you need it.
Consider the scenario of purchasing a car and using it on UBER. If you can sell the car quickly and make the same amount of money that you used to purchase it, its a good invesment. However, if the value of car depreciates quickly or there is a slim chances of it selling quickly, it might not be a good invesment.
Similarly, if you give a loan to someone at an interest, you have to consider whether this person has the capability to pay the principle whenever you need.
