The “secret” to getting rich is not much of a secret at all.
“It is practical. That which one man knows can be taught to others,” George S. Clason writes in his 1926 personal finance classic “The Richest Man in Babylon.“
Clason’s collection of parables, based in the ancient city of Babylon, starts with the story of Arkad — the son of a humble merchant, of a large family with no hope of inheritance — who grows to become the richest man in Babylon, thanks to wisdom he sought out from a rich money lender named Algamish.
In hopes of turning his city into the wealthiest in the world, the King of Babylon asks Arkad if he can share the “secret to wealth” with the rest of the city. Arkad complies, and over the course of seven days, teaches a class of 100 men what he calls the “seven cures for a lean purse.”
3. 'Make thy gold multiply.'
Once you've made a habit out of controlling your expenses and setting aside at least 10% of your income, put that money to work.
'The gold we may retain from our earnings is but the start,' says Arkad. 'The earnings it will make shall build our fortunes ... Learn to make your treasure work for you. Make it your slave. Make its children and its children's children work for you.'
Making your money your 'slave' is the modern-day equivalent to smart investing through your employer's 401(k) plan or other retirement accounts, such as a Roth IRA or traditional IRA. Thanks to compound interest, your savings can grow tremendously over time -- the trick is to set aside money regularly and to start as early as possible.
'Behold, from my humble earnings I had begotten a hoard of golden slaves, each laboring and earning more gold,' explains Arkad. 'As they labored for me, so their children also labored and their children's children until great was the income from their combined efforts.'
4. 'Guard thy treasures from loss.'
There is always going to be a level of risk involved in investing, which is why it's crucial to be smart about where you invest your money.
'The first sound principle of investment is security for thy principal,' says Arkad. 'Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly.'
Investing is a long term game and the 'get rich quick' mindset will only set you back. As legendary investor Warren Buffett likes to say, 'It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick.'
If can be tricky to figure out the best way to invest your money, but you don't have to go at it alone. There are financial planners, wealth advisers, and robo-advisers to guide you. There is also an abundance of accessible information out there if you want to be a more hands-on investor. Check out some of our favourite books and podcasts that cover investing basics, strategies, and tips.
'Consult with wise men,' advises Arkad. 'Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments.'
7. 'Increase thy ability to earn.'
'The more of wisdom we know, the more we may earn,' preaches Arkad. 'That man who seeks to learn more of his craft shall be richly rewarded.'
Rich people choose to constantly learn and grow -- they would rather be educated than entertained, even after they have attained incredible success. Take Warren Buffett, for example, who estimates that 80% of his working day is dedicated to reading.
'Cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself,' says Arkad. 'Thereby shalt thou acquire confidence in thyself to achieve thy carefully considered desires.'