If you’re among that 20% of individuals who’d rather read through the summary of a book than reading the book, this is for you. Today we’d review the big ideas of ‘The Richest Man In Babylon.’ Like you know, no book on financial success is written without points, strategies, and rules.
Since the publishing of this book, numerous individuals have made a significant turnaround in their financial lives. It’s no doubt why you stumbled on this writing piece today.
However, you’d rather skip through the stories and illustrations to get the keynotes off the book. This summary highlights the best ideas of the book practically. Let’s get started.
Lesson 1 – The ‘Keep 10%’ Savings Rule
This book made it entirely clear to its readers that many financially successful individuals save their money. Interestingly, this simple ideology dates way back to centuries of our lifetime.
Saving and investing at least 10% of your financial earnings or profits keeps you afloat during hard times. Of course, you’d agree that top earners invest way more than 10%. This is simply because they’ve learned and watched this strategy work for them over time.
For the average earner, 10% off your financial income or earnings is an achievable goal to set. What many fail to realize is that saving is a habit. Mastering the habit of savings is an important tool in attaining financial success.
You could try putting 5% into your savings account and have the other 5% go to an IRA. This is a saving strategy that allows you access to the funds in a time of need. Save today!
Lesson 2 – Control Your Expenses
Honestly, a large percentage of individuals need to work on this factor to attain freedom from financial restraints. When looking to increase your financial capacity, there are two angles to look from — increasing your income and decreasing your expenses.
The perfect balancing between these two dependent factors leads you to financial stability. This is why keeping track of your expenses and income is a major step in attaining financial stability.
A lot of 2iself help books and guides advise you to focus on increasing your income. However, living lavish means your income and earnings would never be enough. On the other hand, cutting your expenses by half while strategically looking to increase your income does the trick. If you don’t keep track of your expenses and income, you’d forever remain financially unstable.
You can’t manage what isn’t measured. Stay on budget and track your money today!
Lesson 3 – Invest In Places That You Are Knowledgeable
Sometimes, investing in places you’re knowledgeable about helps you understand your capital’s terms and growth better. Take Bitcoin, for example; not every Tom, Dick, and Harry understands the BlockChain market’s operations.
Yet, many people invest with little or no information about where Bitcoin would be in ten years. According to the advice from this book, most people shouldn’t invest in Bitcoin. Instead, invest in a knowledgeable sector or industry.
For example, if you know a thing or two about creating YouTube videos, digital marketing, and stuff, invest in that niche instead. Grow your network using the skills and facts in a knowledgeable sector instead of betting it all on Bitcoin.
It’s more advisable and tactical to put your money in places you can control and monitor. Investing in a venture like Bitcoin strips you of your rights to control the BlockChain.
Lesson 4 – Keep Learning, Never Stop Growing
This idea tallies with investing in what you’re knowledgeable about and share interests in. You can broaden your investing area simply by getting more knowledge of what interests you. People have taken lots of courses on Bitcoin and still do not have the slightest clue on the factors that determine their profit or loss. However, spending the same amount of time in relatable areas means you wouldn’t have to learn from scratch.
Take advantage of courses out there to keep you ahead of your peers and competitors. When you invest in learning within a familiar industry, you can apply it and watch yourself grow with time.
What you get from these courses are years of experience and knowledge from experts in your field. The information from the courses enables you to access how to get better at what you do. As explained in this book, get value from investing in knowledge. Keep learning!
Lesson 5 -Guard Your Money Against Fatal Loss
This idea focuses on INSURANCE. Ideally, we buy insurance for our cars, homes, and health insurance. What stops us from insuring our cash or financial flow of income? Of course, stuffing your cash under your bed is the most unwise thing to do.
Imagine if your house caught fire and you had to watch years of hard work burned down in flames? That would be a super horrible sight; mostly, one people never recover from.
Instead, take it to a bank or invest in something lucrative. Also, avoid gambling because most gambling places are created to take your money. Looking at it from the Bitcoin perspective, like in the book, can you guard your Bitcoin? Are there secure places to keep you Bitcoin? This is something to think about!
Lesson 6 – Setting Up Passive Income
Humans have the tendencies to get physically or mentally ill at any time. What happens to your business or flow of income if it’s solely dependent on your presence? It means you’re up for bankruptcy or being forced to sell a business you’re passionate about.
Avoid this tragic scenario by setting up systems to grow your net worth even in your absence. The 4-hour workweek is also a great book that explicitly explains passive income.
The Best Idea In Summary
The Richest Man In Babylon is an amazing book that shares tips and practical steps to attain financial stability. Amongst the ideas shared by George S Clason are these top 6.
The summary cuts across maximizing the 10% saving strategy, controlling your expenses, investing in areas you’re known to be in charge of your earnings. After which, we summarised how learning while growing, guarding your money against fatal loss, and setting up passive income could help you attain financial stability. Get these ideas into action today!
