Money Skills: George S. Clason teaches you timeless principles for managing your money

 

When following any rules or principles, you want to be sure that they work, especially when it comes to money. Luckily there are simple rules that people have been applying for thousands of years, and achieving the rich life. These rules were written in stone and now you can read them from a book called The Richest Man in Babylon by George S. Clason. After reading this book:

  • You will know how to crush your debts.
  • You will know how to attract more money.
  • You will know what to avoid when using your money.

Money is something you can’t live without, most of your well-being depends on it: the food you eat; the place you live at;  the work you do; or the interests you can pursue. Knowing the basics of managing it, makes life a lot easier.

Something specific I really liked: seven cures for a lean purse

Even if you think that your situation is beyond hopeless, keep that in mind: people who got rich using these principles…were slaves. If they managed to escape slavery, everything is possible.

The First Cure. Start thy purse to fattening: “For each ten coins you put in, to spend but nine.”

The Second Cure. Control thy expenditures: “Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify thy worthwhile desires without spending more than nine-tenths of thy earnings.”

The Third Cure. Make thy gold multiply: “To put each coin to laboring that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse.”

The Fourth Cure. Guard thy treasures from loss: “Guard thy treasure from loss by investing only where thy principal is safe, where it may be reclaimed if desirable and where thou will not fail to collect a fair rental. Consult with wise men. Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments.”

The Fifth Cure. Make of thy dwelling a profitable investment: “Thus come many blessings to the man who owneth his own house. And greatly will it reduce his cost of living, making available more of his earnings for pleasures and the gratification of his desires.”

The Sixth Cure. Insure a future income: “Provide in advance for the needs of thy growing age and the protection of thy family.”

The Seventh Cure. Increase thy ability to earn: “Cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself.”

These were the seven cures for a lean purse. Also, the book offers solutions to other problems, like knowing when to help someone (not ending up doing everything yourself), like loaning money (not ending up with empty pockets), working for ungrateful bosses (not ending up lowering your standards), etc.

Do these principles work in today’s world?

Babylon existed thousands of years ago, do these principles fit our modern day standards? What results can you expect? The book offers a powerful example to illustrate the effectiveness of these ancient principles:

My dear Professor:

If, in your further digging into those ruins of Babylon, you encounter the ghost of a former resident, an old camel trader named Dabasir, do me a favour. Tell him that his scribbling upon those clay tablets, so long ago, has earned for him the lifelong gratitude of a couple of college folks back here in England.

You will possibly remember my writing a year ago that Mrs. Shrewsbury and myself intended to try his plan for getting out of debt and at the same time having gold to jingle. You may have guessed, even though we tried to keep it from our friends, our desperate straits.

We were frightfully humiliated for years by a lot of old debts ‘and worried sick for fear some of the trades people might start a scandal that would force me out of the college. We paid and paid—every shilling we could squeeze out of income—but it was hardly enough to hold things even. Besides we were forced to do all our buying where we could get further credit regardless of higher costs.

It developed into one of those vicious circles that grow worse instead of better. Our struggles were getting hopeless. We could not move to less costly rooms because we owed the landlord.There did not appear to be anything we could do to improve our situation.

Then, here comes your acquaintance, the old camel trader from Babylon, with a plan to do just what we wished to accomplish. He jolly well stirred us up to follow his system. We made a list of all our debts and I took it around and showed it to everyone we owed.

I explained how it was simply impossible for me to ever pay them the way things were going along. They could readily see this themselves from the figures. Then I explained that the only way I saw to pay in full was to set aside twenty percent of my income each month to be divided pro rata, which would pay them in full in a little over two years. That, in the meantime, we would go on a cash basis and give them the further benefit of our cash purchases.

They were really quite decent. Our greengrocer, a wise old chap, put it in a way that helped to bring around the rest. “If you pay for all you buy and then pay some An what you owe, that is better than you have done, for ye ain’t paid down the account none in three years.”

Finally I secured all their names to an agreement binding them not to molest us as long as the twenty percent of income was paid regularly. Then we began scheming on how to live upon seventy percent. We were determined to keep that extra ten percent to jingle. The thought of silver and possibly gold was most alluring.

It was like having an adventure to make the change. We enjoyed figuring this way and that,to live comfortably upon that remaining seventy percent. We started with rent and managed to secure a fair reduction. Next we put our favourite brands of tea and such under suspicion and were agreeably surprised how often we could purchase superior qualities at less cost.

It is too long a story for a letter but anyhow it did not prove difficult. We managed and right cheerfully at that. What a relief it proved to have our affairs in such a shape we were no longer persecuted by past due accounts.

I must not neglect, however, to tell you about that extra ten percent we were supposed to jingle. Well, we did jingle it for some time. Now don’t laugh too soon. You see, that is the sporty part. It is the real fun, to start accumulating money that you do not want to spend. There is more pleasure in running up such a surplus than there could be in spending it.

After we had jingled to our hearts’ content, we found a more profitable use for it. We took up an investment upon which we could pay that ten percent each month. This is proving to be the most satisfying part of our regeneration. It is the first thing we pay out of my check.

There is a most gratifying sense of security to know our investment is growing steadily. By the time my teaching days are over it should be a snug sum, large enough so the income will take care of us from then on.

All this out of my same old check. Difficult to believe, yet absolutely true. All our debts being gradually paid and at the same time our investment increasing. Besides we get along, financially, even better than before. Who would believe there could be such a difference in results between following a financial plan and just drifting along.

At the end of the next year, when all our old bills shall have been paid, we will have more to pay upon our investment besides some extra for travel. We are determined never again to permit our living expenses to exceed seventy percent of our income.

Now you can understand why we would like to extend our personal thanks to that old chap whose plan saved us from our “Hell on Earth.”

He knew. He had been through it all. He wanted others to benefit from his own bitter experiences. That is why he spent tedious hours carving his message upon the clay.

He had a real message for fellow sufferers, a message so important that after five thousand years it has risen out of the ruins of Babylon, just as true and just as vital as the day it was buried.

Yours sincerely,

Alfred H. Shrewsbury,

Department of Archaeology.