Richest Man in Babylon: Chapter 2 – The Richest Man in Babylon

Now, I will attest that it took me a minute to learn these laws,

and much longer to even consider observing them.

Truly speaking, if I had never bought the Richest Man in Babylon,

I probably never would have learned them.

I owe my life to this book . Wealth increases the potency of life.

Wealth amplifies joy, health, relationships, travel opportunities, glorious food, gifts to your loved ones, charitable giving.

Wealth is power. With wealth, many things are possible.

With wealth, when you speak , people listen. 

If you want to achieve, enjoy and experience these things,

you will have to invest time, money and effort into making it happen.

If you're honest with yourself, there's probably a couple

of things you don't know about acquiring money and keeping it,

and making it grow. You have to take stock of what you know,

how you're using it, and benefiting from it.

And you also have to find out what you don't know. 

Find out where you can obtain this knowledge

so you can get better results than what you're doing now.

And once you find this knowledge,

make a covenant with yourself that you will do all you can

to make your dreams come true.

Sometimes you have to start at the bottom.

There's no shame in it. The only shame is in knowing what to do,

and still not doing what you know. That's an unforgivable sin. 

Some of you, like me, have to start at negative figures.

And you have to get back to zero before you start moving forward.

And I'm going to tell you right now, it's possible. I've done it.

From 180k plus in debt, back to zero,

and now building up to the millies and the billies..

The first step to progress lies in deciding that a portion

of all you earn is yours to keep. You have to separate

and automate this portion so that it doesn't even  come

into your transactional account.

You must not give yourself a chance to be tempted into using

this money. Keep this portion aside and don't touch it.

Get yourself an experienced mentor.

Someone who's done the business you wish to do.

Someone with the right connections.

Someone who knows where the potholes are located,

and knows how to navigate around them.

All of which were relevant thousands of years ago,

and will still be relevant a thousand years from now.

This book will teach you these basics and also hold you accountable. Your financial advisor will teach you the advanced principles

this series of articles doesn't cover.

The first principle is to pay yourself first.

And it it's always helpful to have a specific goal

you're working towards. This financial goal is mostly

referred to as your Financial Freedom Number.

Your Financial Freedom Number is the amount of money

you need to save so that you can live off your investments

without having to work. To figure it out, first add up how much money you spend in a year. Then, multiply that number by 25.

For example, if you spend R500,000 a year,

you would need R12,500,000 saved up.

This is based on the idea that you can safely withdraw 4%

of your savings each year without running out of money.

Invest it in places where it will grow through interest,

profits or dividends. Take advantage of the compounding effect.

Your money must earn more money. And that earned money

must earn even more money. The sooner you start, the sooner

you can profit, and the more your money will grow.

Be consistent with your savings and investments.

Save a fixed portion of your income every month.

From this, assign a portion to buying a number of shares a month,

or put it towards your real estate portfolio,

or put it towards your capital for your own business venture.

We're not talking about trading and speculating.

We're talking about consistent and growing contributions.

Warren Buffett said,

"Never invest in a business you cannot understand."

Verify the credentials of your financial planner, your accountant,

and your tax planner. Have them demonstrate to you that they know what they're doing. Exercise some restraint.

Don't be too quick to chow down the profits

from your savings and investments.

As Algamish said to Arkad,

"You do eat the children of your savings.

Then how do you expect them to work for you?

And how can they have children that will also work for you?

First get thee an army of golden slaves

and then many a rich banquet may you enjoy without regret."

Don't think only of spending without considering

also earning, saving and investing first.

You cannot find what you're not looking for, so you must have

a definite purpose.  Opportunity will pass you by if you are not prepared. Once you've made your decision to be rich,

make sure you see it through. Don't let yourself off the hook

with excuses. How else will you have confidence in yourself

to do the important things if you fail to complete even the simplest things successfully. Be impeccable with your word.

Do not set impossible or impractical goals,

because then you're just setting yourself up for failure.

Budget wisely so that you don't burden yourself.

"Counsel with wise men.

Seek the advice of men whose daily work is handling money.

A small return and a safe one is far more desirable than risk"