In The Richest Man in Babylon, George Samuel Clason outlines the teachings of a man who became wealthy and successful. The book contains stories and advice that can help you achieve financial security and abundance. In this summary, we will discuss his seven cures for a lean purse. If you want to learn how to build wealth, read on!
Seven Lessons from the Richest Man in Babylon
1. Start saving money
The first cure for a lean purse is to start saving money. The man in the story, The Richest Man In Babylon, saved ten percent of his income and slowly increased his savings over time. He also invested his money wisely and avoided debt.
Here are some strategies you can use to start saving money:
a. Automate your finances
One of the best ways to save money is to make it automatic. Automating your finances means that you set up a system where a fixed amount of money is transferred from your checking account to your savings account each month. This can help you to avoid the temptation to spend your money frivolously and will help you to save money without even having to think about it.
Are you finding it hard to stay consistent with your savings plan? Do you seek ways to automate your savings, particularly in dollars, making it easier to reach your financial goals? Rise has you covered. Our auto-invest option simplifies this process for you, so you don’t have to manually do it yourself. All you need to do is turn on the Auto-invest option, set a funding amount, frequency and preferred payment method, and we Rise will automatically save for you on schedule.
b. Find a good savings account
When it comes to saving money, it’s important to find a good savings account that is safe and offers relatively high interest rates. This will allow you to grow your savings more quickly and will help you to achieve your financial goals sooner.
On Rise, you are guaranteed 8% percent returns on your wallet savings. Now, what is Rise? It is a dollar investment company that helps you build wealth and achieve your financial goals by investing your money in high quality assets like stocks and real estate. It is regulated by the SEC through a trusteeship agreement with ARM Trustees, who oversees investments on your behalf. All assets are held in regulated third parties in the relevant jurisdictions. So there, you have it! A safe savings account that offers relatively good returns, and in addition, allows you to invest in foreign assets.
c. Make a budget and stick to it
Budgeting is another essential step in saving money. When you have a budget, you are able to track your spending and make adjustments as needed so that you can stay within your budget constraints. This will help you to avoid overspending and will ensure that you have enough money saved each month.
In this article, we’ve written everything you need to know about budgeting. And you can find some great budgeting apps here.
d. Cut back on unnecessary expenses
There are likely many expenses in your life that are not necessary, such as cable TV, eating out frequently, or buying new clothes all the time. By cutting back on these types of expenses, you can free up more money to put into savings.
2. Live below your means
The second cure according to George Samuel Clason’s The Richest Man in Babylon is to live below your means. The man in the story was content with what he had and did not try to keep up with the Joneses. He only bought what he could afford and lived a simple lifestyle.
Here are some strategies on how you can start living below your means:
a. Evaluate your spending.
The first step to living below your means is to evaluate your spending. Take a close look at your bank statements and credit card bills to see where you are spending the most money. This can help you figure out where you can cut back on your expenses.
b. Create a budget.
Creating a budget is a great way to start living below your means. A budget will help you track your expenses and make sure you are only spending what you can afford.
c. Make a list of expenses you can live without.
There are likely some expenses that you can live without altogether. Make a list of these expenses and try to cut them out of your budget altogether.
d. Find cheaper alternatives to your regular expenses.
There are likely cheaper alternatives to some of your regular expenses. For example, instead of dining out, cook at home more often. Or, instead of buying brand-name clothes, shop at discount stores instead.
e. Stick to your budget!
The best way to start living below your means is to stick to your budget. If you find that you are having a hard time sticking to your budget, try setting some stricter limits or finding an accountability partner who can help keep you on track
3.Like The Richest Man in Babylon, always Make your money work for you
The third cure for a lean purse is to make your money work for you. The man in the story of the Richest Man in Babylon invested his money in businesses and real estate. He made sure that his money was working hard so that he could live a comfortable life without having to worry about financial insecurity.
Here some ways you can use to start making your money work for you:
a. Invest your money: One of the best ways to make your money work for you is to invest it. Investing your money can help you grow your wealth over time. There are a number of different investment options available in Nigeria, and we’ve written everything you need to know about them in this article, so it is important to research the ones that best fit your needs and risk tolerance and begin investing right away. Rise has various investment asset classes that can fit your risk appetite.
b. Use credit wisely: Credit can be a powerful tool when used correctly. Make sure you only borrow what you can afford to pay back and always try to get the best interest rate possible. This will help you to save money in the long run.
c. Use a financial planner: A financial planner can help you make the most of your money by developing a personalized plan tailored to your specific goals and needs. They can provide guidance on how to save for retirement, pay off debt, and more.
d. Start a side hustle: A side hustle can be a great way to make extra money and grow your savings. There are a number of different ways to earn extra cash, so find one that best suits your skills and interests. Here are some ways you can make income on the side in Nigeria.
e. Stay disciplined with your spending: One of the most important things you can do to make your money work for you is to be disciplined with your spending. Resist the urge to buy unnecessary items and stick to a budget plan.
4. Guard your money from loss
The fourth cure is to guard your money from loss. The richest Man in Babylon diversified his investments and insured himself against risks. He did not put all of his eggs in one basket and was prepared for setbacks.
Here are some actionable steps you can use to prevent money loss:
a. Invest your money in a variety of places: Diversification is an important financial strategy that protects your investments against loss. When you spread your money out, you reduce the risk of losing it all if one investment goes south. In this article, we talk about why you should and how you can diversify your investments.
b. Keep your money in foreign currency: This may not be the most exciting option, but it’s one of the safest. You don’t have to worry about your money losing value if you keep it in a foreign currency like the USD. It also helps to hedge your investment or savings against rising inflation and currency devaluation.
c. Use a savings account: A savings account is a great way to protect your money while still allowing it to grow. The interest rates on savings accounts are typically higher than on checking accounts, so your money will work harder for you.
e. Get an insurance policy: If something happens to your money, an insurance policy can help you recover some or all of your losses.
f. Diversify your investments: As mentioned before, spreading your money out is a good way to minimize risk. By investing in a variety of things, you’ll reduce the chance that all of your eggs will be in one basket.
5. Stay out of debt
The fifth cure for a lean purse is to stay out of debt. The man in the story only borrowed money when he could afford to pay it back. He knew that debt could lead to financial ruin and avoided it at all costs.
Here are 5 ways you can properly use debt:
a. Get organized
One of the best ways to stay out of debt is to get organized. Make a budget and track your expenses so you have a better understanding of where your money is going each month. This will help you identify areas where you can cut back and put more money towards your debt.
b. Create a debt payoff plan
Another key to staying out of debt is developing a debt payoff plan. Figure out how much money you can realistically put towards your debt each month and create a timeline for becoming debt-free.
c. Stick to your budget
It’s important to stick to your budget once you’ve created it. If you allow yourself to overspend, you’ll quickly fall back into debt. Be disciplined with your spending and make a commitment to living within your means.
d. Make extra payments
If you can afford it, make extra payments on your debts each month. This will help you pay them off faster and save on interest costs.
e. Seek help if needed
If you’re struggling to get out of debt on your own, don’t be afraid to seek help from a financial advisor or credit counseling service. They can provide guidance and support as you work to become debt-free.
6. Own your own home
The sixth cure is to own your own home. The man in the story bought a house outright and did not have to worry about making mortgage payments. He was able to live rent-free and use his extra money to save for retirement or invest in other ventures.
Here are 5 steps you can take to own your home:
a. Determine what you can afford.
When it comes to buying a home, it’s important to be realistic about what you can afford. Mortgage lenders will look at your income, debts and credit score to determine how much money they’re willing to lend you. So before you start house hunting, sit down and figure out how much you can comfortably afford each month.
b. Save up for a down payment.
Most lenders require borrowers to put down at least 20% of a home’s purchase price as a down payment. So if you’re looking to buy a $200,000 home, you’ll need to save up at least $40,000. However, there are some programs available that allow borrowers to put down as little as 3%.
Start saving for your down payment using Rise’s Own A Home Plan.
c. Get pre-approved for a mortgage.
Getting pre-approved for a mortgage is one of the smartest things you can do when buying a home. It shows sellers that you’re serious about purchasing a property and that you have the financial backing to do so. Plus, it’ll give you an idea of how much money you can actually borrow.
d. Research neighborhoods and schools.
Before buying a home, it’s important to do your research and make sure the neighborhood and schools are right for you and your family. You’ll want to consider things like commute time, crime rates and the quality of local schools.
e. Hire a real estate agent.
Hiring a real estate agent is probably one of the best decisions you can make when buying a home. They can help you find the right property, negotiate on your behalf and guide you through the entire buying process.
7. Have multiple streams of income
The seventh and final cure for a lean purse is to have multiple streams of income. The man in the story had several businesses and investments that generated income. This allowed him to live a comfortable life without having to rely on one source of income.
Here are 5 actionable steps to building multiple streams of income:
a. Diversify your income sources: Don’t put all your eggs in one basket. When you have multiple streams of income, it’s less risky if one of those income sources dries up.
b. Invest in yourself: Educate yourself on different ways to make money. There are many online courses and programs that can teach you how to start a side hustle or create an online business.
c. Create a plan: Figure out what types of income you want to generate and how you can realistically achieve them. It’s important to be realistic and set achievable goals.
d. Start small: Don’t try to do too much too soon. Pick one stream of income and focus on building that up before adding another stream.
e. Stay disciplined. It’s easy to get sidetracked when you’re trying to manage multiple streams of income. Make sure you set aside time each week to work on your business goals and stay on track.
If you want to learn how to build wealth, The Richest Man in Babylon is a great place to start. The book contains stories and advice that can help you achieve financial security. In this summary, we have discussed seven cures for a lean purse. Implement these ideas into your life and you will be on your way to becoming wealthy!