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The Seven Laws of Money - Advice From “The Richest Man…”
By JLP | January 3, 2008
The Seven Laws of Money as found in The Richest Man in Babylon for Today
Law #1 To start on the path to wealth, first put aside 10% of your income every month. - It might be difficult at first, but once you get used to it, you won’t miss that 10%.
Law #2 Control your expenses with a budget.
Law #3 Put your money to work for you.
Law #4 Seek safety in your investments, and the advice of the successful. - Don’t misunderstand this to mean that you shouldn’t put your money at risk. You’re going to have to accept some risk if you want your money to grow. Also, don’t assume that because someone is “successful” that they will have your best interest at heart.
Law #5 Own your own home. - Just be sure you get it at the right price. Do your homework first!
Law #6 Provide or you old age, your health and the protection of your family.
Law #7 Cultivate your own powers. Increasing your knowledge and skills increases your options and earning power. - I agree 100% with this law. The really cool part is that this is one of the easiest laws to practice. Read, read, read!
Topics: Books |
January 3rd, 2008 at 12:41 pm
Law #7 is definitely an important one, and one that is often overlooked. Your assets will increase by both being diligent AND by increasing your income. Getting additional training or an advanced degree will help move you forward. It’s all part of “managing your career”, rather than sitting back and hoping good things come to you.
January 3rd, 2008 at 12:43 pm
I read and loved the Wealthy Barber which also states you should set aside 10% of your income and invest it as your “wealthy fund.” I was wondering how many people actually do this.
Right now in my house we are aggressively eliminating our auto and student loan debts. Once that’s done, we’ll pay off the mortgage. And after that we’ll be investing a lot of money each month because of no payments.
We are using a hybrid Dave Ramsey plan where we still contribute heavily to our 401(k) accounts.
I was just curious because I love the idea of paying yourself 10% first but I’m not sure I’ve ever read that someone is doing that.
January 3rd, 2008 at 1:07 pm
you misspelled “budget”
#7 is very important
January 3rd, 2008 at 2:19 pm
Is this realistic? How many hamburger flippers own their own home?
January 3rd, 2008 at 2:27 pm
Minimum Wage said:
“How many hamburger flippers own their own home?”
Probably not many. But,… I bet there are people who started out as burger flippers and by applying Law #7, moved up into management and now own homes.
January 3rd, 2008 at 5:08 pm
What if you have no desire to manage hamburger flippers? Aren’t there nay better options?
January 3rd, 2008 at 5:29 pm
Minimum Wage,
What is your point?
January 3rd, 2008 at 6:42 pm
It’s a good list and one that has held its value for a long period of time.
I agree that #7 is hugely important. For most of us the easiest way to improve our financial position is to improve our income which usually requires us to invest in developing our skills and knowledge.
January 3rd, 2008 at 6:51 pm
The vast majority of hamburger flippers have no desire to become managers, so how do they move up and buy homes?
January 3rd, 2008 at 6:56 pm
Minimum Wage said:
“The vast majority of hamburger flippers have no desire to become managers, so how do they move up and buy homes?”
They don’t. If they have no desire to better themselves, I guess they have to stay where they are. It’s about choices.
January 3rd, 2008 at 8:43 pm
So a hamburger flipper’s options are limited to becoming a manager or continuing to flip hamburgers and not getting ahead?
I find that profoundly depressing.
January 3rd, 2008 at 8:49 pm
Minimum Wage said:
“So a hamburger flipper’s options are limited to becoming a manager or continuing to flip hamburgers and not getting ahead?”
That’s not what I said. Did miss the part about bettering themselves? If a burger flipper has no desire to ever be anything but a burger flipper, that’s their business.
January 3rd, 2008 at 9:52 pm
Okay, how would I better myself? And, at my age (50-ish), would it make any difference financially? (e.g. I don’t think employers are hiring 50-yo entry level accountants)
January 4th, 2008 at 9:20 am
[...] Every investor should read the book The Richest Man in Babylon. JLP at AllFinancialMatters provided a summary of the key tips from another book that talks about the seven laws in today’s context. [...]
January 4th, 2008 at 3:08 pm
Minimum Wage,
Are you saying a 50-year old can’t succeed?
With all due respect, I think you are looking for excuses to justify your situation. If you aren’t happy flipping burgers but don’t want to move up the fast food chain, then do something else.
I think you are happy where you are because if you weren’t happy, you would change.
January 4th, 2008 at 10:48 pm
I’m saying that it’s hard for the average 50-year old toget a job, and it’s a lot harder than that for a 50-year old with a minimum wage job history to get a decent job.
My resume, with my dead-enjd job history, doesn’t get me interviews, so how would I succeed without even getting an interview?