Advice from the Richest Man in Babylon

Some of you may have read this book and some of you might have heard it but never read it. Some might never even heard about it. Nevertheless, this has to be one of the book that you MUST read at least once in your entire life. 

I am not here to make a review or blabber about the plot and story line. I am here to share with you the 7 rule to be rich. 

There has to a small part in ourselves that wished we were rich enough to buy something, or help others. Therefore, heed to these 7 rules, follow them and you shall gain your wealth. 

"A part of all you earn is yours to keep"  - Arkad, the Richest Man in Babylon. 

What he meant by here is don't save too much. Save at least one part or 10% of your earning, minimum. From what I have stated here, you need to at least save 20% minimum. You cannot spend everything of what you earn and save nothing. Be content with the portion you wanted to keep. 

The First Cure

"For every ten coins thou placest within thy purse take out for use but nine" 

If for example you earn RM1000 per month, spend only RM900 and save the other RM100. In this modern era, it is 10% of your total earnings that you need to save. 

Experts says that you need to at least 3-6 months of your salary in your savings in order to survive any financial crisis or market crash. 

The Second Cure 

"Budget thy exoenses that thou mayest have coinc to pay for thy necessities.." 

What we called as our 'necessary expenses' will always grow equal to our incomes unless we protest to the contrary. That is why it is important for us to make a budget on what to spend and what is not necessary to spend. 

The Third Cure 

"To put each coin to laboring that it may reproduce its kind..." 

The easiest way to translate this is - Investment. In order for the money to grow, you need to invest it in order to get a cash flow. 

You can also invest in property or gold or any valuable item that can generate more money. A men's wealth does not come from the money he had in his bank account, or his savings. But it comes from the income that he built.

The continuous money that keep on flowing to generate income whether he is working or not. 

The Fourth Cure

"Guard thy treasure from loss by investing only where thy principle is safe..."

Consult someone familiar with the topic. If you plan to invest in stock market, find a stock market expert. If you want your company to have excellent balance sheet, find a renown financial accountant. 

Don't ever take an advice from someone who is not familiar with the subject. As quoted by Warren Buffet "Never invest on something you don't understand" 

The Fifth Cure

"Own thy home"

The Sixth Cure

"Provides in advance for the needs of thy growing age and the protection of thy family" 

No one in this world had ever asked for any misfortune to happen in their life, yet accident always come. Therefore, it is better for us to prepare our self in case luck is not on our side. 

Some will be lucky enough to live our their old days however, sooner or later everyone will meet the end. How we spend our old days 

Pension. Insurance.

The Seventh Cure

"Cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself"