‘A person who uses his/her wealth to invest in trade and industry for profit in accordance with the principles of capitalism.’
This week I stumbled on an article that reminded me of one of the first books I read on wealth, The Richest Man in Babylon.
I decided to do a #throwback read and again, I was struck with how the lessons captured in the book remain timeless.
Today’s post is a summary of some of these really important lessons
‘Income, that is the thing’
The first story in “The Richest Man in Babylon” is about a conversation between two friends, Bansir and Kobbi. They ponder on how it is possible to have worked for over fifty (50) years and yet not achieve a wealthy status.
This led them to admitting one of the keys to wealth; put your money to work so you can earn passive income and not have to keep trading time for money all your life.
“Every piece of gold you SAVE is to WORK for you, and every copper it earns is a child that must also work for you . If you will be wealthy, what you save must earn and its children must earn… ”
What this statement simply means is, when you earn income, it is not ‘profit’.
Think of your income as revenue available for you to invest and earn returns. What you earn as returns on investment can also be re-invested until you earn multiple returns.
This is what Warren Buffet calls the 8th wonder of the world, Compound interest.
Do the study
After a long depressing conversation on the state of their affairs, Bansir and Kobbi decide there is no point waiting on hope and take action to carry out an active study on how the richest man in Babylon became wealthy.
That’s another key to wealth; If you want to achieve anything in life, you have to do the study.
The internet is an amazing gift for our time, because we can literally study anything we want to at the click of a button. Anytime. Anywhere
You can learn how to build a business from scratch from the most successful entrepreneurs, you can learn how to cook mouth watering dishes right in the comfort of your own home, how to create an inspiring piece of art, how to date when you’re absolutely clueless. Literally anything!
Bansir and Kobbi didn’t have the internet. They had to take a trip to Arkad’s house (The Richest Man in Babylon at the time) to gain immediate access to the information they needed; how to get wealthy.
While you may not have direct access to some of the richest men on earth, you can watch their habits from a distance and decide if you want to model those habits to achieve success, thanks to the social media.
If you have any knowledge gap, make it a study.
“A man’s wealth is not in the purse he carries. A fat purse quickly empties if there be no golden stream to refill it.” ~ Kobbi, Friend of the Seeker
Reading further, at some point, Bansir suggested there must be a secret to wealth that they needed to learn. Kobbi, his precious friend, mentions seeing Arkad, the richest man in Babylon, in the streets that day riding in his golden chariot.
To this, Bansir jokes about robbing him if he should ever catch him alone on a dark night.
It was at this point that Kobbi shares probably the most useful insight into wealth. In his own words, “A man’s wealth is not in the purse he carries. A fat purse quickly empties if there be no golden stream to refill it
Now that statement is an often overlooked truth!
You’ll find classic examples of this truth with whose who win the lottery. They get lucky, win the lottery and within a few years, are back to broke zone.
Why does this happen?
It’s simple. Wealth easily gained is, most of the time, is easily spent and lost because there is no system or plan in place to keep building it up.
I meet people who believe all they need to build wealth is a higher paying job or a salary raise at work.
That’s not true.
If you’re spending more that you earn now, you will most likely continue to do that when you earn higher income. A higher paying job or salary raise will only give you more income to spend.
Unless you take action by putting your money to work.
When you put your money to work in markets, trade or industry, you are being a capitalist.
Capitalism is an economic system in which the means of production and distribution, in a society, are privately or corporately owned and the operations are funded by profits. It rewards hard work (Your hard work and your money’s hard work) and punishes laziness.
If all you do is work hard and spend money, your money is extremely lazy.
There is no secret to wealth. Wisdom is on the streets so get wisdom and in all thy getting, get understanding.
If you haven’t read the book or if you have and need a refresh, download a copy of the PDF version of the book, The Richest Man in Babylon, online. (It is available for free on the internet)
Do a quick read before the year ends to get yourself updated on timeless truth.
Have you read the book before? Share your thoughts below on what your key lessons were.
P.S If you need to stay accountable to your wealth goals and need an accountability circle, sign up to get on the wait list for the green club. We will take on new members again in a few weeks.