Friday, July 6, 2012

The 5 Laws of Gold

The Richest Man in Babylon by George S. Clason is one of the best sources of basic sound financial advise ever written. If you haven't had the chance to read this, I highly suggest you take it upon yourself to look it up. You can actually read this online for free since the copyright has long been expired.

This book takes you back to ancient Babylon and walks you through the life of a young Babylonian as he saves and prudently spends his way from rags to riches. One of my favorite sections in this novella is the 5 laws of gold which I listed below:

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.

This section is telling you to save 10% of your earnings each year for retirement.

2,) Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

This section is magnifying the importance of putting your money through work in investments instead of stuffing it in your mattress.

3.) Gold clingeth to the protection of the cautious owner who invests it under the advice of wise men in its handling.

If your not good at investing money, then it makes sense to hire someone who is.

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.

If you don't know how your investment makes money (for example how a company in which you have stock makes its money), then you should not be investing in them. Too many complicated things could happen and you're left standing with nothing. Stick with your own comparative advantage and knowledge base.

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 naive with your money. If an investment seems too good to be true, then it most likely is. 

Needless to say, all these "Proverbs", if you will, still make completely logical sense today, and so I encourage you to read the entire tale.

Wonderful Moment of the Day: - Spending time with my nieces and nephew.

No comments:

Post a Comment