It was other authors who gave us money management strategies to build wealth. George S. Clason, author of “The Richest Man Is Babylon” is one of them. He states in his book that our prosperity as a nation depends on the personal financial prosperity of each of us as individuals. In other words, we cannot pretend that our nation is rich while the individuals are poor. In order for us to prosper, we must strive.
The money management strategies explained in this chapter are intended to provide those who wish to succeed financially with insight that will help them acquire money, keep it, and earn more money from their surpluses.
The money management strategies titled Remedies for Skinny Purses in the book “The Richest Man in Babylon, are presented and explained here in a way that everyone can understand. Our desire is to motivate you to put them into practice to achieve the purpose of the author of the book.
The strategies are stated and explained here
Start your feeder market.
For every ten coins you put in your purse, take out only nine. Your purse will begin to fatten all of a sudden and its growing weight will feel good in your hand and bring satisfaction to your soul.
In modern parlance, the strategy states that you should only spend 90% of your income, as an individual, organization or nation. The 10% should be saved and as you do this regularly, your savings account will make you happy.
Arkad, the richest man in Babylon, began in the book “Now I will tell a strange truth: when I stopped paying more than nine tenths of my earnings, I managed to get by I was no smaller than before: it is surely a law of the gods that for him who keeps and does not spend a certain part of all his earnings, gold will come more easily. He whose purse is empty, gold shuns him,” Akrad continues. quickly disappeared and forgotten? Or is it substantial goods such as gold, land,
Herds, investment-bearing income? The coins you withdraw from your purse pay first. The coins you leave there will bring the last.
This means that the money you save can be invested to obtain gold, land, herd and thus create lasting wealth.
Control your expenses Control your expenses so that all expenses do not exceed 90% of your income. All men are burdened with more desires than they can satisfy, what each of us calls our necessary expenses will always increase to equal our income, unless we protest against it. Plan your necessary expenses. Do not touch the tenth which enlarges your purse.
This means we need to control our spending so that 10% of our income is set aside in a savings account.
Arkad says the gold in a purse is rewarding to possess and satisfies a miserly soul but yields nothing. The gold or silver that we can retain from our earnings is only the beginning. The gain it will bring will build our future. A man’s wealth is not in the coins he carries in his purse; it is the income it builds; income that keeps coming whether you work or travel. The third strategy is therefore to make each coin work so that it can reproduce its kind like the herds of the fields and help to bring in income, a stream of wealth that will constantly flow into your purse.
While strategies 1 and 2 focus on savings, the 3rd encourages investment in profit-making ventures.
Protect your treasure from loss:
The gold in a man’s purse must be guarded or it will be lost. The first sound principle of investing is security of your principal. Is it wise to be intrigued by lager gains when your capital may be lost? Therefore, it is best to consult the wisdom of those who have experience in handing over money for profit.
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