How did the richest man in Babylon create his wealth? Will his wealth building methods work today? Let me explain how you too can use his methods to create wealth.
The richest man in Babylon had very simple wealth creation methods. These methods were secret only because most people didn’t believe that they would work. Can you use them to build your own wealth? Yes you too can use his wealth creation, wealth building methods!
Create Your One Wealth
Pay yourself first is his cardinal rule to building wealth. Everyone can follow this rule, regardless of their income, as long as they have a regular income to work with. Most people spend more than they earn. Fact! It doesn’t matter how much or how many raises, they spend it all and then some.
You can always live like someone who earns less, because they do! Pay yourself first, at least 10% of your earnings, and live off the rest. Resist the temptation to buy that new shiny toy, just live on the 90%.
When you pay yourself first, you will accumulate savings. Invest these savings wisely, and your pot of gold will grow.
Necessity vs. Desire Builds Wealth
Most people confuse desires with necessities. Your first task on the road to accumulating wealth is to determine your true necessities. Pay for them first. Make a list of your desires. If there is anything left from the 90% of your income, you can pay for things from your list of desires. Or, you can bank it, and build even more wealth, your choice.
The best way to assure that you follow your plan to build wealth is to make a budget. Put the necessities for you and your family at the top of the list. Prioritize your desires below the necessities. Allocate your earnings (the 90%) starting at the top of the budget, and stop when you run out of money. Do this every month without fail.
Make Your Money Create Wealth for You
Money in a savings account earns but a little. The temptation to make high return investments is a mistake to be avoided. High return investments are risky investments. The greater the potential earnings, the higher the risk!
Invest your gold wisely in areas where you have good knowledge, or can obtain good advice. Eventually, your income from investments will be so large, that your opportunities for investment will also grow immensely. By the end of each year you will have accumulated enough money to invest and earn more. Don’t make the mistake of spending these new earnings.
Keep saving and investing wisely, and one day you, like the richest man in Babylon, will be able to retire and live off the wealth you have built.
Please will note that in this article, I have not given any specific investments to consider as that is a discussion for another article.