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The Five Laws of Gold
Continuing with my series on personal financial education from The Richest Man in Babylon, another story is the tale of the five laws of gold, a five-point philosophy on the handling of wealth and money and what they mean to us in our own daily handling of our own personal wealth and money.
1. 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 and that of his family.
Pay Yourself First. This first rule is very simple to implement regardless of your income. Its not about how much you earn but how much you save. If we habitually “ pay ourselves first ” and we put aside 10% of our earnings or income for our savings and invest for our future estate or retirement funding, or for our children’s education funding as a bare minimum, our wealth will continue to grow in value and amount.
Pay yourself first, before all your bills and expenses, before your toys and before your living expenses. ALWAYS SET ASIDE 10%.
Remember, ITS MORE IMPORTANT WITH WHAT YOU DO WITH WHAT YOU GET THAN IT IS WITH WHAT YOU GET !
2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
Invest to Build More Wealth. Everything you save should earn. If you invest your money well, your money will simply work hard for you and make you more money. This is a very simple and obvious rule, but one that many people never get to because they didn’t follow the first rule and never allow their money to multiply through compounding. Because they don’t have the money in the first place to invest. They did not build their seed capital through savings.
Also, putting your money under the mattress isn’t going to do much good. Money is energy and needs to be circulated and put to good use.
In order for wealth to truly accumulate, you need to put into an interest bearing account. The interest it earns will, in turn be added to the principal, so that you earn more interest, and so on. This is call compounding. YOUR MONEY SHOULD ALWAYS WORK HARD FOR YOU AND EARN INTEREST OR RETURNS.
3. Gold clingeth to the protection of the cautious owner who invests it under the advice of wise men in its handling.
Learn, Study and Seek Qualified Advice. This rule cautions the investor to be cautious in his or her investments , or be informed and know what exactly they are investing. Be knowledgeable and carry due diligence so as to safeguard your investment principal. With the internet, one can search and find plenty of investing ideas and information.
When it comes to money, always seek the advice of wise men who is well versed
and skillful and knowledgeable in the handling of money. If you are sick, would you ask medical advice from a gardener ? I hope not !
4. 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 keeping.
Don’t Be Gullible. This rule goes hand in hand with the third rule. Obviously if you invest in stuff , you don’t understand, you’re most likely to lose your money.
Don’t buy the latest hot stock based on rumours or tips, or investment vehicles that you have not done any research work, always investigate and invest where you want.
Another piece of advice: NEVER LOAN MONEY TO PEOPLE WHO ARE NOT CAPABLE OF PAYING IT BACK.
5. Gold flees the man who would force it to impossible earnings or who followeth the advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
Don’t Be Greedy. There is no such thing as a free lunch. The worst option is when people are looking for fast money and eager to invest in “ Get Rich Schemes” that promises absurdly good returns, or anything that you are heavily pressured into buying.
These investments are scams and those that fall for such scams, will inevitably find that they will lose their hard earned money.
These five rules are all you need to know really.
In essence, save some money at least 10%, Then invest your money for compounded growth. However, invest in stuff that you are knowledgeable. Educate yourself about investments, be it, real estates, properties, shares, mutual funds, forex, and any other forms of investments but only invest when you have done the research and you know exactly how it works and have learn the skills for such investment. Anything else is sure way to fall behind.
I hope you enjoy the sharing
By Michael Tay www.michaeltay.com
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