The Richest Man In Babylon

– Practical Applications – Do and Act.

” Whatever you do may seem insignificant to you, but it is most important that you do it.”

Mahatma Gandhi

The Richest Man in Babylon - 7 cures for a lean purse

In my earlier posts, I have shared in summary and in details,  the 7 main laws of accumulating wealth based on the principles from The Richest Man in Babylon. If you missed them, please refer to them again as it is important that you fully understand the concept and principles therein.

Now, you realize that to fully benefit and gain from acquiring this new knowledge, you need to apply it, don’t you?  Knowledge without applying and taking action is of no value. The secret to succeeding, is taking ACTION! You must Do and Act on your new knowledge and understanding.

If you are not getting the results and success that you are desiring, you will have to change what you are presently doing and believing. Because, if you keep doing the same things that you are doing now, you will continue getting the same results as in the past. If you don’t like your current results, then you must start thinking and acting and doing things differently so that you will get  different  results – the results that you desire. Success and Financial Wealth.

The  amount of your wealth and success you have now is strongly tied to your beliefs system and knowledge you are having and applying now in your life. Keep reading and you will see what you have been missing and if you are able to apply yourself differently, then you are on the road to financial success.

The Richest Man In Babylon – Practical Applications – Do and Act.

Here is the summary and practical applications of the main laws from The Richest Man in Babylon of accumulating wealth:

1.   A part of all you earn is yours to keep. What you earn, a part of it is yours to keep. If you give away ( spend, buy stuff or toys, pay taxes, and others ) everything that you earn and are left with nothing, obviously you will have no savings and will not accumulate anything. So, no matter what happens, you must ensure for yourself, that a part of all that you earn is yours to keep. And this part of it will be your savings of at least 10% of all you earn, not to be spend on bills, purchases, taxes or anything else that doesn’t earn you more money. Ensure you Pay Yourself first.

There is a saying. “ Rich people save first and spend the rest, whilst poor people, spend first and save what’s left.”  The difference is not in the amount, but in the philosophy of what they do with their money.

2.    After setting aside 10% for savings, which leads us to the next point. Control your expenses so that you are able to keep at least 10% or more,  of all that you earn and you are able to live without running out of money, which is the financial blood of any financial system. Here, we are talking about your own personal financial system. The only way, you can do this, is that you must know what your money is doing, where it comes from, and where it goes and that you are able to account for the cashflows.

Is your money buying assets or spending liabilities?  Buying assets will grow your wealth, whilst spending  on liabilities and thinking it’s an asset  will take cash away from you. You must start keeping records, specifically a budget, an income and expense statement, a cash flow statement and your Net Worth statement. You need to know where you are now financially. If you don’t know your net worth today, then how are you to plan where you want to be financially one year , 5 years or even 10 years from now.

3.    Once you have started and form the habit of saving at least 10% of all that you earn, you must make it multiply, you must make your money work hard for you. Make your money to bear children, grow and work for you to make more money. This is where you begin to multiply your money through compounding growth, understanding the rule of 72 and wise investments. You let your money bear more of its own kind – more money and more money. Isn’t this exciting?

In other words, invest it well and accumulate assets and it will make you more money than you can possibly do yourself. When your investments and assets bear fruit, don’t consume all the fruits! Re-invest most of your investment gains back again to build more assets – this way, your assets and wealth will grow in leaps and bounds until you amass a massive capital that becomes your financial golden goose that will provide continuous monthly cash flow incomes to support your desired lifestyle.

The Richest Man In Babylon – Practical Applications – Do and Act.

4.    Guard your assets from loss. You must preserve your capital. You cannot grow anything if you are losing your capital. Understand that it is the nature of money, that you will win some and you will lose some in any investments. No one can guarantee 100% success all the time in any investment. You have to accept the fact that investments carry risks. Accept this fact and relax.
However, you can learn to minimize your risks by putting in place strategies to ensure that your capital losses are mathematically managed so that the gains are more than the losses. This is the area of money management and asset protection. Don’t invest in something that you are not familiar with. Don’t get into anything before you have studied it to know and understand why and how a particular investments work. “ Investing “ your money based on hot tips or get rich scheme …… that will get  you into trouble.  If you are sick , don’t ask your gardener for medical advice. Seek the advice of a medical doctor. Likewise, in the area of personal finance, seek the advice of a well qualified advisor with a proven, verifiable success track record in that particular area to tell you what to do and what not to do.

5.    Like most people do, if you have a home on mortgage, try to convert it into a profitable investment. As it is, most people hold homes that are actually liabilities to themselves and assets to the bank. Liabilities take money out of your pockets whereas assets put cash into your pocket.

6.   Insure a future income. Try to structure your financial affairs so that are properly insured with adequate life, accident and medical insurance cover and that you progressively systemize the making of money and wealth. This will free you from having to be present or having to hold a job. You will have created a system whereby your money works hard for you and brings you both cash-flow to use now and when you retire, should you choose to retire, and ever-increasing wealth and financial success.

7.   Increase  your ability to earn more. The best investment is always investment in yourself, in your own personal and self-development growth. Because you will always earn on the value you offer to your employers or customers based on what you know, and what you are aware of. If you are not aware of your own capability or certain opportunity, you will not even recognize it.

So always increase your ability to earn by making it a habit to continuously upgrade your knowledge and make it a life-long learning for yourself. Read the books, listen to audio CDs, DVDs, attend seminars and associate with successful people and find mentors  to transform yourself. You must consistently upgrade your knowledge and apply them – we live in a universe where the only constant is change itself. We have to move with the cheese. Gain the financial intelligence and financial responsibility. The choice is yours and the best part of it, we all have the power within us to achieve the success and wealth we truly deserved, if only we believe and act on it.

I hope you enjoy the sharing 
By Michael Tay   www.michaeltay.com

Feel free to reprint this article in its entirety in your ezine or newsletter, or on your blog or website, as long as you leave all
links in place, do not modify the content and include our resource box as listed above.

Be Sociable, Share!

• 
•