I was searching for a book on personal finance for a while. A book that would teach me a few tricks to build wealth. Finally, I found one – “The Richest Man in Babylon”.
I went through the book and it turned out to be a gold mine for personal finance.
I have taken valuable lessons from this book and hope to practice them in my life.
Let me share with you today some of the personal finance lessons I learned from The Richest Man in Babylon:
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Your First Personal Finance Lesson: Keep 10% of your earnings to saving
“Start thy purse by fattening“
You should plan ahead for emergencies. So, keep aside 10% of each paycheque you receive as an emergency fund.
Have better control over your expenditures
“Control thy expenditures.”
You will be able to save money only if you cut unnecessary costs. Make a budget for maintaining your basic standard of living. This may include grocery and utility bills, mortgage rent, property tax, credit card payments, etc.
Although, occasionally you may have your lavish dinners. But, try to avoid spending on unnecessary things. After all, you may pursue some of your desires but not all.
Be careful while investing
“Guard thy treasures from loss.”
Investing in stock markets or startups may seem lucrative. But try to sense the risk of investment before investing. For example, certain stocks will incur losses. So, maintain a diversified portfolio while you put money on stocks. Similarly, assess the future prospect of a newly started business before you pour your hard-earned money into it.
Don’t forget to invest in yourself
“Increase thy ability to earn”
Don’t be satisfied with your current skills. You may be a software engineer working on web development and earning big bucks. But never be too complacent. AI is eyeing almost all professions and software engineering is no exception. So, it will be prudent on your part to learn some AI skills like machine learning to avoid being redundant.
The tales of Arkad and other characters in The Richest Man in Babylon can be your first step toward grasping personal finance. These ancient stories are still relevant today because they can teach beginners to acquire riches in a simple way.
