How to get Rich? 5 Laws of Money & Investing – Richest Man in Babylon
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In today’s video we talk about the 5 RULES of INVESTING to Get RICH – (Richest Man in Babylon 2) or the 5 laws of gold or the 5 rules of money, 5 rules of success or whatever you call it. The ultimate lesson you’ll learn from this video is that you can get rich, achieve financial freedom (true independence) by savings and investing in the Indian stock market. These 5 golden law is taken from the best personal finance book of all time – The Richest Man in Babylon, so its a small book summary or a review of this personal finance and investing book.
1. Pay yourself first, that is, Save 10% of your Total Income:
“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.”
According to the First Law of the 5 Laws of God, You should save 10% of what you make. Every person needs a certain amount of money for necessities and survival but apart from that if you earn more, you can even save more. The beginning of all great wealth is a consistent savings plan.
2. Invest your Savings to build more Money
“Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of field.”
The second law of the 5 Laws of Gold advises investing money to build more money. It doesn’t mean that you spend it on lavish purchases rather spend money to earn more money. Thus, you must use your savings to invest and build different income sources that constantly fill your cash reserves and helps them to grow. This will help in growing your money with power of compounding.
3. Read, Study, and seek qualified advice as Gold Loves a Cautious Owner
“Gold clingeth to the protection of the cautious owner who invests under the advice of men wise in its handling.”
The third law of the 5 Laws of Gold says that you should always seek advice from a person who is qualified to give you that advice. Most celebrities and athletes hand over their finances to financial advisors. It turns out to be the right decision in many cases but you should have some participation in the management of your finances otherwise you might land up in some trouble.
4. Study Investments and educate yourself before investing:
“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.”
According to the fourth law of the 5 Laws of Gold, you must study and educate yourself well before investing. This law encompasses the two wealth killers namely Ego and Laziness except the third one, that is, Greed. Sometimes people are lazy due to which they don’t read, attend seminars or otherwise educate themselves and sometimes they are egotistical due to which they think that they are too smart to need any further education.
5. Don’t fall for Get-Rich-Quick Schemes:
“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.”
The fifth law of the 5 Laws of Gold advises us to not be greedy and invest wisely. Few people offer such unrealistic investment returns that are way too good to be true. It works for some time but then when it all blows up, most of the people who invested their money in that collapse. There are many cases of people who do not have any knowledge and purpose for their hard-earned money, and due to that, it disappears.