The book by George Samuel Clason entitled “The Richest Man in Babylon” truly is a great handbook for those who wants to achieve financial freedom.
It may sound like an ordinary story book telling the stories of some ancient Babylonians, but the lessons are so true and so powerful that practicing them will truly make one achieve the wealth they dream of. The rich man in the story was Arkad. He was so rich and wise that one day his friends came to him to seek advice on how to be wealthy. They ask how come he has become wealthier when back in the days they were all the same.
Arkad started his quest for wealth or rather we could term it financially free life when he desired to be one. His desire drove him to seek advice from back then the rich money-lender named Algamish. And the rest changes his life.
3 Lessons to Learn
The three lessons Arkad learned when he was still in a way mentored by Algamish were:
- Live below your means
- Seek financial advice from those who are themselves achieved financial freedom
- Know how to make your money work for you.
These three are true even today. Lots of people complain that life is hard or life is unfair, but in reality whatever situation you are in is the result of your past actions. Like Arkad, you and I must desire and seek a solution to achieve our dreams. It all starts with the resolved to do something about the current situation. Armed with the desire and the resolved to achieve financial freedom, the three lessons will lead you in enjoying life to the fullest.
Live below your means
This lesson is the very first lesson that every human must learn. Once learned, you will easily accept the lessons that are actually connected to his like paying yourself first, saving, you cannot give what you don’t have, and others.
The problem today is that people do not actually know how to take advantage of the debt facility available in this era. Before obtaining a loan is hard, but today’s credit card companies, SSS & Pag-ibig, banks, and people handing out flyers can easily get you a loan. If you are employed or have a credit card you have a higher possibility of securing a loan.
Having extra money is good, but most of the borrowers forget that the money they get is not the money you earned. You enjoy the proceed of the loan and after it you face deduction or a bill that eats up your succeeding pay. Some would say it is a 12 easy installment, but that is actually a year of agony seeing your money gone in a blink of an eye to pay for that borrowed money.
Living below one’s means will force you to think of ways to save. Also, it will make you think of the principle of paying yourself first that is setting aside money for your future first before spending and paying others that you owe. Right now the concept of saving is equal to earnings less expenses is the current setup in one’s head, but if one learns how to live below their means the equation earnings less savings is equal to expenses becomes a lot more realistic.
Living below your means will teach you how to save.
Seek financial advice from those who are themselves achieved financial freedom
This lesson is easily explained by saying that ” a blind man cannot lead another blind man or else they both fall into the pit”.
You don’t look up for advice from those who themselves are not financially free. Just like in the story, you don’t get advice about jewelry from brickmakers but rather get it from the expert themselves. But also these era have the fake gurus. Some people claim that they know what they are doing but in reality their goal is to deceive you and make a profit out of you.
We have scams here and there. Promising big returns in a short period of time. And yes, they can prove that and they can do their thing even if they close their eyes, but it is all part of their scheme. Be careful from these false gurus.
If you can’t find one seek it in books and written literature. Out there we have tons of authors, research, blogs, and others who truly tell the truth about the right way to achieve wealth.
Also, our generation is blessed with groups and forums that have a mission to truly educate each member about finances. Participate and learn from these groups and forum and apply the wise shared ideas and tips to control your finances and eventually achieve your financial goals.
Know how to make your money work for you
Again, make your money work for you. We call this passive income.
In the story, Algamish teaches Arkad to make the grandchild of his earnings work for him that way there will be endless flow of earnings. Recently we learned about the “Kurot Principle” which says that we only spend a pinch for the things we want. To translate that if you want a new phone worth 25,000 make sure that this amount is actually a pinch of your earnings.
To make a point, let say a pinch or kurot is about 0.05% of your income. With this idea, you should only buy that phone when your earnings is 50,000,000. The lesson here is in order for you to enjoy the finer things in life make sure that you have enough earnings tot he point that such luxury are just “barya”. At the same time make sure that in the near future your money itself earns enough passive income that you don’t have to work anymore and just live a comfortable life from the earnings of the earnings of your savings years earlier.