Retirement Planning | The Five Laws Of Gold You Need To Know
"The Richest Man in Babylon" was published by the notable writer George S. Clason in 1926.
Set in ancient Babylon, a city renowned for its wealth, wisdom, and prosperity, it was famous for its achievements in architecture, law, science, and trade.
Despite lacking signs of forests, its most notable structure, the legendary Hanging Gardens, is said to be an engineering marvel, featuring terraced greenery in the desert.
Its center of governance, the Code of Hammurabi, was history's earliest and most comprehensive legal system. Its city's massive, thick walls, constructed from sturdy mud bricks, were designed to protect it from invading armies.
Although the city achieved much, it eventually lost its glory due to corrupt leaders, leading to Babylon's decline.
What remains for us now is its wisdom.
The wisdom enabled them to become one of the most prosperous ancient cities.
The wisdom that we can apply to our daily lives.
The same laws that governed money in ancient Babylon still apply today.
"Gold is reserved for those who know its laws and abide by them"- George S. Clason
THE FIVE LAWS OF GOLD
To harness your potential and live up to your dreams, you must understand the "Five Laws of Gold," or in other words, the five principles of making money.
Remember, success is measured by wealth.
Those who don't understand these rules often struggle to attain wealth and tend to lose it quickly.
And for those who follow these principles, enhance their knowledge, and improve their skills, will find wealth flowing to them like a sustained stream of fortune.
The more we know, the more wealth will come back.
Law #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.
In plain English, save at least 10% of your income.
Wealth accumulates in large quantities only when you save and protect your income.
When you are employed, you typically receive either a monthly or a weekly paycheck. If bills, groceries, nights out, and random expenses take priority, you may be left with nothing but an empty pocket.
This backward approach doesn’t lead to saving, and an empty pocket won’t build wealth by itself.
Just as you pay others for goods and services, make sure to pay yourself a portion of your earnings.
Aim to save at least 1/10th of what you earn for yourself and your family's future, or even more if possible.
Once you start saving, you will realize that you can manage just fine while spending 90% of your income on needs and wants.
Although it may be tempting to dip into your savings at times, remember that spending provides only temporary gratification, while saving builds long-term wealth and security.
In “The Richest Man in Babylon,” archaeologists uncovered ancient clay tablets filled with stories that date back thousands of years.
One in particular described the tale of a man who was buried deep in debt and managed to climb his way out in just four years.
How?
Well, he followed the five principles.
What he did was list every debt and expense carefully so he knew exactly what he owed.
He created a simple but strict budget plan: live on 70% of what you make, save 10% for yourself, and use the remaining 20% to repay your debts.
He stayed disciplined and consistent.
His plan allowed him to escape his debt and his previous way of living, enabling him to restart his life as a wealthy person.
Remember, if you want to get rich, living from paycheck to paycheck will make it impossible.
Save your money so it earns compound interest (also known as the eighth wonder of the world).
Compound interest is when your money makes money for you. You worked for your paycheck. Now, it’s time to make your paycheck work for you.
Law #2: “Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.”
In Plain English: Invest it wisely to multiply it.
Now that you understand how to save all your wealth, remember that this is just the starting point.
Building wealth involves more steps.
And the next step is to seek out profitable ventures to invest in, so your money isn't just sitting around and losing value due to inflation.
Take advantage of any opportunities that come your way and use them for your own profit to multiply your money.
Be patient with your investments.
Investing is a long-term process, and it may take time for your investments to grow.
Don’t fall for the “get rich fast” schemes.
If you decide to lend money to help a friend or family member, make sure they can keep their promise to repay you, and determine if they are qualified for the loan.
There are many ways to help people, but do not do it in a way that harms you or restricts your money, energy, or ability to care for yourself.
Law #3: “Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.”
In Plain English: Money is best protected by those who seek expert advice before investing.
It’s important not to take financial advice from someone who lacks experience or is not a trustworthy financial professional, especially before making major investments.
If you want expert guidance, consult with individuals who are knowledgeable in their particular fields.
It’s easy for amateurs to offer advice who are driven by their inexperience and selfish aspirations in investment.
Surround yourself with people who understand money, those who deal with it daily and are successful, such as financial advisors, accountants, or other financial experts.
However, don’t be fooled just by titles.
Just because someone is a financial planner doesn’t mean they can provide wise advice.
To determine whether someone is the right financial advisor for you, consider asking yourself these two questions:
Does the person have the happiness, peace, and joy you desire?
Do they have the wealth that I aspire to achieve?
Don’t risk the money you spent hours earning. Time doesn’t come back. Focus on safely growing your savings and only invest with expert advice.
Law #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 keep.”
In plain English: Avoid investments in things you don’t understand.
As Clason stated, “Gold flees the person who tries to force it into impossible earnings.”
Invest your money in businesses that you are familiar with and that have been vetted by experienced professionals.
Trust wise individuals and stay away from risky ventures, as these often result in poor returns and financial losses.
Don’t be the person who is too lazy to understand the potential risks and outcomes of the investments you consider.
Educate yourself about unknown ventures regarding the risks, rewards, and management teams involved.
When Arkad, the richest man in Babylon, invested his money, he loaned it to Aggar, whom he knew to be reliable and had a good track record of paying his debts. Once Aggar sold all the shields he made with the bronze, he paid Arkad the loan back plus the interest.
So do invest, just in trustworthy businesses that will make your money work for you.
Law #5: “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.”
In Plain English: Avoid "Too Good to be True" Schemes
If something sounds too good to be true, it probably is.
Do not make impulsive decisions.
Set realistic expectations to avoid falling for scams that promise unrealistic returns.
The key to successful investing is thorough research.
Investing should be approached with caution and careful research.
For the investments you are considering, such as stocks, bonds, real estate, or small businesses, you need to understand the risks and potential returns involved.
Remember, those who invest their wealth based on the advice of experts are more likely to see greater wealth in the future.
What Comes Next?
Now that you’ve understood the five laws of gold, it’s time to take action.
Start saving today and begin planning for your retirement.
For more information, feel free to check out our latest blog on retirement planning.
Remember, the sooner you start, the stronger your future will be.
For any questions or concerns, feel free to reach out and fill out the form given below.
We’re here to help!
