The book “Richest Man in Babylon” known for unlocking secrets of wealth through stories to illustrate financial teachings, is set in the once prosperous and ancient city of Babylon. The importance of these lessons to aid the reader’s mind to financial freedom cannot be overlooked, as it has proven beneficial to Managers, executives, students and many more for decades with the financial principles applied. The Five Laws of Gold would be examined briefly with the valuable lessons to be extracted there in;
1st Law – “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” The first Law emphasizes the need for savings, it highlights that savings would proof useful for future economic exploits to actualise one’s dreams. The suggested amount is 10% that is one tenth of the regular earnings one receives. The result of the accumulation of this when channelled to the right ventures, would yield profits for a bright financially stable future. Saving up may prove difficult at first, but the discipline of setting aside such amount would prove useful in the long run and one would realise that the expenses which took all of the earnings even if they persist would be taken care of, if this principle is strictly applied as spending is based on priority and irrelevant materials are shunned.
2nd Law – “Gold laboureth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field” This is the place of investments. The Gold must work for the owner,that is why a profitable venture must be found to multiply the earnings. It would be inappropriate to have the savings dormant and not yielding more profits, therefore there is a need to put the saved income to work for more wealth.
3rd Law – “Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling”
When the owner is ready to invest the funds in a productive venture, he must choose wisely whom he seeks counsel from as that is the safest bet for optimum use of the savings for a right cause. Wise men who are skilled and aware of the field or business intended would give better advice than a novice. Gold multiplies in the hands that exercises caution by seeking expert opinion before taking financial decisions.
4th Law – “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”
This is wisdom that must be reiterated. Having surplus as a result of regular savings may fool one to seek investments that would multiply earnings without knowing enough about that business to be invested in, especially if there is a promise of profit involved. However, to get maximum profit, businesses well understood must be sought as the skill he possesses can be used to obtain profit in the long run. Furthermore, the business must be approved by those in control of that expertise, as non-approval would mean there is no safety against the obstacles that would be confronted in the course of the business. The continued exploration of illegality would leave the owner with no case.
5th Law – “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” The last law explains that tempting money doubling ventures with no assured profit used to entice many should be totally avoided. The lust for wealth is what is psychologically played on to steal the attention of those seeking quick wealth. Such investments prove futile because there is usually an intent to swindle after a short boom to draw people in. Tricksters abound and they make Gold escape the hands of an inexperienced individual. Beware!
These 5 Laws should be digested and applied to day to day life, as that is the first step to financial intelligence.