Seven rules for creating wealth from the book "The Richest Man in Babylon"

From ancient times, man had the desire and desire to acquire wealth and preserve it. It was noted that those who succeeded in making money developed certain sound financial principles with their experience. These principles are universal and immutable. Nevertheless, we have very few rich people. The majority of the population in most countries is poor or middle class. The reason is simple. There are very few people who understand these financial principles, and even fewer of them who actually apply these principles in their real life.

Today we are going to discuss the Seven Rules, which are the right key to a bigger wallet, a bigger bank balance and pleasant financial progress from a modern inspirational classic book. "The richest man in Babylon" George S. Claron.

Babylon was one of the most glorious cities of ancient times. He was famous for his wealth and magnificence. His treasures of gold and jewels were fabulous. In this city there were no forests, no mines, no stone for construction. He was not even located on a natural route. Rainfall was not enough for growing crops.

Babylon is an outstanding example of a person’s ability to achieve big goals using any means he has at his disposal. All the resources supporting this big city have been developed by man. All his wealth was artificial. Babylon possessed two natural resources — fertile soil and water in the river.

So let us understand that they understand the Seven Rules of Financial Wisdom, that people living in this glorious city have followed forever and made them rich and prosperous.

Rule 1: Start a fattening wallet

We all have different ways to make a living. Some of us choose to work for a living, others prefer to charge for their professional services, and many of us are starting to make big or small money to make money. All these are great streams to make money.

But money can be accumulated only when we save enough money earned money. Suppose auto-driver earns Rs. 500 per day. If he starts to keep Rs. 100 per day after spending Rs. 400 according to his daily needs, he would have saved Rs. 3000 / - by the end of the first month.

You will think that is so unique in this rule. Everybody knows it. I agree, but my girlfriend is really always simple. Now tell me how many of us really follow him. If we followed this rule, what is the role of credit cards and loans for buying expensive mobile phones, luxury cars, gadgets and luxury villas in our lives?

Is it not true that as our income increases, consciously unconsciously, our standard of living increases automatically? And then we always have an excuse that we can barely cope with the expenses that are necessary for life, and we have very little to save.

Rule 2: cost control

It is generally accepted that when the money earned is not even sufficient to pay for the necessary expenses, how can you control the expenses.

You will be surprised to learn that, although different people have different incomes, yet they all face the common problem of an empty wallet. If incomes are different, and they all spend only on necessary expenses, then the accumulated savings should be different for everyone. But this is not so, because the definition of necessary expenses varies from person to person.

All people are doomed to more desire than they can satisfy. At that moment, when they have excess money, their desire to lure them to spend money, making it clear to the logic that money is being spent on the needs of life.

We need to check our desires. The first step after making money should be to save a predetermined amount of money as savings. Only money left over after saving should be spent on the necessary expenses and partial fulfillment of our desires and pleasures.

Rule Three: Multiply Gold

Habit of savings will correct the wallet. Gold in a wallet is pleasant for satisfaction and satisfaction of a pitiful soul, but earns nothing. So, the next step is to consider putting treasure to work and making money. The gold we save at the expense of our income is just the beginning. The wages he brings will make our fortune.

We have different classes of assets for investment, thanks to which we can receive income from our accumulated wealth. Some of these investment options are fixed deposits in banks and corporations, mutual funds, tax-free bonds, investments in stock markets, rental income for residential and commercial real estate, etc.

I am sure that many of you will have lakhs of rupees on your savings bank account, which are idle for a few months and you will learn only 4-5 percent. Perhaps we will not check our bank balances, as a result of which it turned out. If we had invested this money in a fixed deposit in the same bank during the year, we could receive interest in the amount of 8-9 percent. This is just one example of our casual approach to our finances for your reference.

Rule Four: guard the treasure from loss

“It is important to prevent emptying the wallet after it has become well filled. Keep a treasure from loss by investing only where the principal is protected, where it can be returned, if it is desired, and where you cannot get a fair rent. Consult with wise men. What are the advice of those who are experienced in profitable handling of gold. May their wisdom protect the treasure from unsafe investments. ”

It reminds me of the losses that my father suffered by losing his retirement income by investing in the company's fixed deposits. In 1998, interest rates were up to 15 percent, and you could earn another 4–5 percent as a return from a sub-broker. High returns mean high risk. Everything went well for a couple of years. Suddenly, the company's redemption of basic and interest checks bounced. We were shocked. The company had news of liquidity crises. But later the checks were cleared. We got relief. But the temptation to earn a higher income made us re-invest in fixed deposits in one company. But this time, when fixed deposits arose, the company did not pay the principal and interest. And my father lost his hard earned money.

Rule Five: Make housing profitable capital

Having a home for life is a big dream. Nevertheless, most of us spend most of our life living in rented apartments. Payment of rent is a significant part of the monthly expenses for many households.

It is advisable to take a mortgage loan, pay an EMI (Equated monthly installment) and buy your own house, rather than pay a monthly rent where possible. Here you need to buy a house in which you can live at a young age.

This will help him create an asset in the form of ownership of a house from his basic monthly expenses. It will also significantly reduce the cost of living, provide more means to get pleasure and satisfy his desires.

Rule 6: Insure Future Income

We must all prepare for a sustainable income in the coming days, when we are no longer young, and prepare for our family if we can no longer reassure and support them.

You need to seek help from financial planners in order to choose viable life insurance policies (emergency plans), family insurance policies, and retirement plans to deal with difficult times intelligently.

It is necessary to invest in assets in which the security of the principal is ensured and which receive income at regular intervals. This will help to meet the monthly expenses in your old age, as well as help family members after your death.

Rule 7: Increase the ability to earn

The last principle for a fat wallet is cultivate their own strength, learn and become wiser, become more skillful to act to respect themselves. "
“Prior achievements must be desire. Desires must be strong and definite. Common desires are only weak desires. A person who wants to be rich has little meaning. For a person who wants to have five pieces of gold, there is a tangible desire that he can succeed in fulfilling. Desires should be simple and specific. They defeat their own goal, if there are too many of them, too confusing or beyond the scope of a person’s training.

A person must continue to increase his skills in his life. Those who are smart and able will always be in demand. Here whosoeever continues to follow this principle and will always have the opportunity to earn wealth.

I hope that these simple rules of accumulating wealth and preserving it safely will help us in a successful, happy and fulfilling life.