Personal Finance Lessons From The Richest Man In Babylon

Personal finance lessons are all around us in our everyday lives. Every day we handle money without thinking about the consequences of making poor decisions. However, we may not grasp our own financial mistakes.

10 Personal Finance Lessons From The Richest Man in Babylon For Today:

1. Pay Yourself First By Saving 10% of Your Annual Earnings “Pay yourself first” may have been coined by Clason. It means you should put away 10% of every paycheck into savings.  Allocate your savings to an emergency fund amounting to at least six months of coverage for basic essential expenses.  Unforeseen events are unpredictable and undesirable so plan ahead.

2. Spend Within Your Means “Control thy expenditures.” To set aside money for saving and investing, you may need to cut some costs. To control your expenses, assess your budget for your basic living needs.

3. Make Your Investments Work For You Long Term To Accumulate Wealth “Make thy gold multiply.” Saving and investing your money as early as possible enables you to benefit from compound interest through the years. Compounding is a magical way of earning interest on the principal invested and the cumulative effect of earning interest on that interest.

4. Pitfalls of Investment Is Overconfidence “Guard thy treasures from loss.” Investments are often fraught with dangers, especially for beginners. Not every investment bears fruit. Learn about the risks of investing, whether in the stock market or investing in a new business.

5. Owning Your Primary Home Is A Good Investment “Make of thy dwelling a profitable investment.“ There are many benefits to owning your home rather than paying rent in particular parts of the country. Don’t think of renting as throwing away money. It is more of a personal choice for many people.

6. Retirement Savings And Insurance “..it behooves a man to make preparation for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them.“

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