Creating wealth is one skill, but to protect & invest wealth is altogether a different set of skills. It is much more difficult to protect wealth compare to creating it. We have seen so many peoples around us, who had earned so much money in their lifetime, but left with no money at later phase of their life.
The key principle of ‘how to protect and invest wealth’ has been listed in one of my all-time favourite book ‘The Richest Man in Babylon’ by George S. Clason. Before proceeding to these principles / laws, let us understand interesting background of Babylon development.
History of Babylon
In the pages of history there lives no city more glamorous than Babylon. It’s very name conjures visions of wealth and splendour. Its treasures of gold and jewels were fabulous. One naturally pictures such a wealthy city as located in a suitable setting of tropical luxury, surrounded by rich natural resources of forests, and mines. Such was not the case. It was located beside the Euphrates River, in a flat, arid valley. It had no forests, no mines—not even stone for building. Also it was not even located upon a natural trade-route. The rainfall was insufficient to raise crops.
Babylon is an outstanding example of man’s ability to achieve great objectives, using whatever means are at his disposal. All of the resources supporting this large city were man-developed. All of its riches were man-made.
Babylon possessed just two natural resources—a fertile soil and water in the river. With one of the greatest engineering accomplishments of this or any other day, Babylonian engineers diverted the waters from the river by means of dams and immense irrigation canals. Far out across that arid valley went these canals to pour the life giving waters over the fertile soil. This ranks among the first engineering feats known to history. Such abundant crops as were the reward of this irrigation system the world had never seen before.
As a city, Babylon exists no more. When those energizing human forces that built and maintained the city for thousands of years were withdrawn, it soon became a deserted ruin. The site of the city is in Asia about six hundred miles east of the Suez Canal, just north of the Persian Gulf. The latitude is about thirty degrees above the Equator, practically the same as that of Yuma, Arizona. It possessed a climate similar to that of this American city, hot and dry.
Many scientists consider the civilization of Babylon and other cities in this valley to be the oldest of which there is a definite record. Positive dates have been proved reaching back 8000 years.
Preservation of Wisdom
The glory of Babylon has faded but its wisdom has been preserved for us. For this we are indebted to their form of records. In that distant day, the use of paper had not been invented. Instead, they laboriously engraved their writing upon tablets of moist clay. When completed, these were baked and became hard tile. In size, they were about six by eight inches, and an inch in thickness.
These clay tablets, as they are commonly called, were used much as we use modern forms of writing. Upon them were engraved legends, poetry, history, transcriptions of royal decrees, the laws of the land, titles to property, promissory notes and even letters which were dispatched by messengers to distant cities. From these clay tablets we are permitted an insight into the intimate, personal affairs of the people. For example, one tablet, evidently from the records of a country storekeeper, relates that upon the given date a certain named customer brought in a cow and exchanged it for seven sacks of wheat, three being delivered at the time and the other four to await the customer’s pleasure.
Five Laws of Gold
The Richest Man in Babylon hand out financial advice through a collection of parables set 4,000 years ago in ancient Babylon. This book remains in print almost a century after the parables were originally published, and is regarded as a classic of personal financial advice.
The parables are told by a fictional Babylonian character called Arkad, a poor scribe who became the “richest man in Babylon”. Arkad shared his advice on ‘how to generate money and wealth’ & ‘how to protect and invest wealth’ to people of Babylon. All these advice are eternal advice and hold true at any given point of time.
‘How to protect and Invest wealth’ advice are compiled in the form of ‘Five Laws of Gold’. Meaning of Gold here in current scenario is Money, Wealth.
The First Law of Gold
Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.
“Any man who will put by one-tenth of his earnings consistently and invest it wisely will surely create a valuable estate that will provide an income for him in the future and further guarantee safety for his family in case the gods call him to the world of darkness. This law always say that gold come gladly to such a man. I can truly certify this in my own life. The more gold I accumulate, the more readily it comes to me and in increased quantities. The gold which I save earns more, even as yours will, and its earnings earn more, and this is the working out of the first law.”
The Second Law of Gold
Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
“Gold, indeed, is a willing worker. It is ever eager to multiply when opportunity presents itself. To every man who has a store of gold set by, opportunity comes for its most profitable use. As the years pass, it multiplies itself in surprising fashion.”
The Third Law of Gold
Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
“Gold, indeed, adhere to the cautious owner, even as it flees the careless owner. The man who seeks the advice of men wise in handling gold soon learn not to jeopardize his treasure, but to preserve in safety and to enjoy in contentment its consistent increase.”
The Fourth Law of Gold
Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
“To the man who has gold, yet is not skilled in its handling, many uses for it appear most profitable. Too often these are fraught with danger of loss, and if properly analysed by wise men, show small possibility of profit. Therefore, the inexperienced owner of gold who trusts to his own judgment and invests it in business or purposes with which he is not familiar, too often finds his judgment imperfect, and pays with his treasure for his inexperience. Wise, indeed is he who invest his treasures under the advice of men skilled in the ways of gold.”
The Fifth Law of Gold
Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
“Curious propositions that thrill like adventure tales always come to the new owner of gold. These appear to grant his treasure with magic powers that will enable it to make impossible earnings. Yet attentiveness the wise men for verily they know the risks that lurk behind every plan to make great wealth suddenly.”
They are not secrets but truths which every man must first learn and then follow who wishes to step out to improve his or her financial life.
“You must gain control over your money or the lack of it will forever control you.” – Dave Ramsey