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A long time ago, a rich man gave his son a bag of gold and a clay tablet carved with five laws of gold. Then he sent his son away to experience the world. He was given ten years to learn the laws and come back for his inheritance.
After ten years, the son came back and told his father about his experience in the past ten years.
The son accounted how 'disastrous' was his handling of the gold. How he lost in so many ways including buying a business he knows nothing about and unnecessary spendings. He had to sell his horse and his slave so he can have something to eat and a place to sleep.
Hello, readers. This is another lesson that I have learned from the book "The Richest Man in Babylon" by George S. Clason. I originally planned to post this as the next installment to my "Sunday Reflection" series. But I wasn't able to finish it in time.
In this post, I will share with you another valuable lesson from the fifth chapter of the said book, "The Five Laws of Gold". There are times in our lives that we receive something extra. Something we can consider a "huge fortune." Perhaps an inheritance, winning the lottery jackpot, and the likes. But do you know that 70% of lottery winners go broke within 5 years?
That's what I will explain here, and the lessons on how to manage your money. In the first part, I will share some reasons why someone with a huge fortune could get broke easily. Then I will share with you my interpretations of the Five Laws of Gold
The content of this post is not meant to be financial advice. They are merely my understanding and opinion based on the above-mentioned book and you may consider this for educational purposes.
The son in the story accounted for at least three reasons why he lost all the gold that his father gave him.
1. Gambling - His first account was, he lost a considerable amount of his gold by gambling in a horse race. At the same time, he was swindled by a couple of men who posed as travelers and coerced him to bet on a non-winning horse.
2. Failed Business - Next he went into a business partnership with someone he barely knew. And his partner knew little about running a business.
3. No skills for employment- When he lost all of his gold, he could not get employment because he had no skills.
Perhaps these three reasons are the same reason why 70% of the lottery winners lose all their winning within 5 years. In other words, they don't know how to handle their money. Suffice to say, if you don't know how to handle your fortune you will:
Easily swindled or scammed by the others.
Venture into a business and fail. It's ok to venture into a business and fail. It's part of the learning process. But if you venture into a business that you know nothing of with the people that you don't know, then that is a perfect recipe for a disaster.
Another possible reason that I have observed and learned is, most people who received a huge fortune either from lottery, inheritance or other easy means, tend to spend them all rather quickly. They would buy a second house, a new car, jewelry --- and call them investments. But these things can not be liquidated easily. Or they would go on luxurious vacations or tours, without thinking of the future.
1." Gold cometh gladly and in increasing quantity to any man who will put not less than one-tenth of his earnings to create an estate for his future and that of his family".
The son accounted for how he applied this first law. He was finally hired to manage a crew of slaves. From his earnings, he would always save a copper coin. After sometime, he had enough savings equivalent to a silver coin. That was the start.
To simplify the first law...
Save first at least 10% of your earnings. Do it for your future, and your family. And put it in a wise investment where it will grow.
2. "Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field."
When you have enough money, you can invest it where it can multiply. As one of my favorite financial gurus, Bo Sanchez, would say "Use your money to create more money."
How? Invest them wisely, on business, the stock market (with proper guidance), and other means. Though many have a bad impression on insurance, there are insurance plans these days, where your money can grow as well.
3. "Gold clingeth to the protection of the cautious owner who invests under the advice of men wise in its handling. "
The son listened to the advice of the slave owner on which business to engage in. One he identified what the city needs. Then they sought to provide the needed materials.
The point is. You may need to get someone as your business or investment mentor. At this age, you may also invest in a reliable institution with highly trained financial managers.
4. "Gold slippeth away from the man who invests it in business or purposes with which he is not familiar or which are not approved by those skilled in its keep."
As mentioned above, the son lost his gold in several ways. One thing that I would emphasize is, money easily earned is money easily spent.
5. "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."
Another thing that you should look out for is there are now lots of scammers and criminals who always want to steal your money. Some would even try to convince you to join their "get-rich-quick" scams or would do anything online to earn quickly and even steal someone else's money.
Recently, in our province, a man claimed to be rich. He would even arrive in a private jet. He enticed the residents that he would double the money of anyone who would invest in his business. He claimed he is into several financial trading businesses including Forex and cryptocurrency trading. At first, he would appear to be legit because he really did payout to the early "investors", but just as I have suspected, after a few months, he gives different reasons why the scheduled payout is delayed. Now, he is nowhere to be found. A syndicated estafa case is now waiting for him in court.
All of us dream of earning a huge income. Perhaps, a get a job or go into a business where we could earn 6 figures a month or more. But we don't have the wisdom in handling our fortune effectively, we would end up nothing, or worse, get buried and debts.
Thus, before we ask for huge fortune, I suppose we should seek first the wisdom in handling that fortune.
I know that some of you here are already practicing these laws, part or all of them, then you have the right to earn your fortune. For those who don't, I think it's time to seek this wisdom.