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How Does The Rich Accumulate Wealth

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Written by   88
2 months ago

How Does The Rich Accumulate Wealth?

A king once wondered why there were only a few rich men in his kingdom. He asked his councilor

" Why only so few men can acquire all the gold?" 

The counselor replied,

"Because they know how to." 


In the world today, only 2,755people have a net worth of 1 Billion dollars or more. (Forbes: World's Billionaires List

That's less than 4% of the world's population today. 

The question is? How did these people accumulate so much wealth? 

 Greetings, once again, friends. This time, I will dwell on the topic of personal finance. 

I heard a theory once that, if all the riches in the world are distributed equally to all the people in the world, after some time, most of those richest will go back to the top ten percent richest people again.

Why? Because they are the ones who know how to accumulate wealth.

What's their secret?

In this post, I will share the 7 keys to how to accumulate wealth as presented by George S. Clarkson, in his best-selling book, "The Richest Man In Babylon".

The conversation above of a king and his counselor is the revised conversation in the third chapter of that book.

The title of the chapter is 'Seven Cures For Lean Purse'

E-Book cover of The Richest Man in Babylon

Let's go over them one by one.


1. Start thy purse to fattening "For every ten coins thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul."

Save first before spending.image source: unsplash

For every ten coins placed in your purse, take out and use only nine. This means once you received your pay or salary, save the 10 percent right away and spend only the 90 percent on your needs.

If you do the math you will be able to save a month's worth of salary in just 10 months.

10 percent is a good start if you have read my article 'How Do You Plan To Spend Or Save Your BCH Earnings?'

I mentioned another suggestion there to set aside twenty percent. Some financial gurus suggest saving up to thirty percent.

Again 10 percent is a good start. If you are comfortable with it, step out of your comfort zone and make it twenty or higher.

I know, some people would have a negative reaction to not living off the hundred percent of their pay. But there is a way around it.


2. Control thy expenditures "Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify thy worthwhile desires without spending more than nine-tenths of thy earnings."

Plan your expenses. image source: Unsplash

This is one of the solutions to living by 90% of your monthly income is budgeting. First, make your budget for the necessities. 

I'm just going to add here that if you can spend on some entertainment without spending more than 90%, that's the time to start saving 20% or more. Not that I'm suggesting to deprive yourself of some pleasures, but there are ways to enjoy life without spending too much.


3. Make thy gold multiply "Put each coin to laboring that it may reproduce its kind even as flocks of the field and help to bring to the income, a stream of wealth that shall flow constantly into thy purse."

How do you multiply gold? Or how do you make your money grow?

Invest your money where you can earn passive income. image source: Unsplash

The answer is  'investment.' You could start a small business that requires low capitalization. Many of the self-made billionaires started their businesses in their garage.

Or you can part of your savings in a mutual fund or stock market or any other options where you can earn passive income.

But be careful where you will invest your hard-earned money.


4. Guard thy treasures against loss. "Guard thy treasure against loss by investing only where they principle is safe, where it may be reclaimed if desirable, and where thou will not fail tocollect a fair rental. Consultwith wise men. Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments."

There are countless investment schemes out there. However, there are also a lot of investment scams. You should be careful where you invest your money.

Beware of investment scams. Image source: pixabay.com

Here is the rule of the thumb.

If the return of investment is too huge and too fast, like double your money in a month or two, then it's probably a scam.

If you are investing your fiat money, like in mutual funds, look for companies that are licensed by your government. Ask around and do your own research.

If you are looking for ways to make your cryptocurrencies grow, again do some research. 

That's one thing I love here in ReadCash. There are some members here who are sharing where they are investing their cryptocurrency and earn passive income.


5. Make of thy dwelling a profitable investment.

"Own thy own home."

If you are renting, find some ways to buy your property. If you own your property, find some ways to earn from it. If possible, buy a second property and rent it out.


6. Insure a future income "Provide for in advance for the needs of thy growing age and the protection of thy family."

Get an insurance policy. Image source Pixabay

Secure your future and the future of your family. Invest in insurance. There are insurance products these days that come with investments. This way you are making your money grow and securing your future in one deal.

Talk with a Financial Adviser.


7. Increase thy ability to earn “Cultivate thy own powers, to study and become wiser, to become more skilful, to act as to respect thyself."

Never stop learning. Image source Pixabay.


I think this requires a little explanation but requires a lot of action. Continue developing your skills. Never stop learning. There is an ocean of information available on the Internet.

Summary

To sum it all up.

  1. Save at least 10 percent of your earning and use no more than 90 percent for your expenses.

  2. Cut down your expenses. Simplify your lifestyle and plan your expenses.

  3. Invest your money where you can earn passive income.

  4. Avoid any get-rich-quick schemes they are most probably scams.

  5. Own your home. Better yet, find a way to earn from your home.

  6. Get an insurance policy that comes with an investment plan. You can make your money grow while securing your future.

  7. Never stop learning and continue developing your skills.

It takes dedication and discipline to follow these steps. In the end, it's all up to you how much wealth you can accumulate.


Reference:

The Richest Man in Babylon by George S. Cars in (https://www.goodreads.com/book/show/1052.The_Richest_Man_in_Babylon )


I hope you find this useful and I would like to know your thoughts.

Thanks for reading

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Written by   88
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Comments

Isa ka sa naisip ko when I published my recent article, How I spend my BCH. Anyhow, as much as I want to save 10% of what I earn here, I cannot yet. I have before pero biglang naging hindi. Basta lately sapat na sapat lang nakukuha ko dito for my debts. Ngayong August, wala pa. Huhuhu. May ilang days pa ako to work for it. Pero kaya yan...kakayanin 😬

$ 0.02
1 month ago

Hehe ako din medyo na distract ako from writing. Tapos yung CP ko palaging iniisnatch ng isang makulit na bata, kaya hindi ako masyadong nakakapost sa noise. Hehe

$ 0.00
1 month ago

Hehe. Cutie. Kaya kapag may mga kinukuhanan ako naiisip ko ikaw, bbghitte tsaka si Firenze. Kasi nga sabi kuha lang ng kuha ng photos. Ang dami ko na nga photos ulit sa phone. Kailangan minsan makapagbura.

$ 0.00
1 month ago

get rich quick schemes - most filipinos fall in this..

$ 0.00
2 months ago

Sad, but true.

$ 0.00
2 months ago

Hello there John! Now I know what the JH initiative signifies lol.

You know when I read the opening quoted statement, I already guessed where this was heading to and where that came from lol

The Richest Man In Babylon, what a book. I will never regret the day I read this book. It happened last year when we were all locked up in our houses lol. I don't read much of finance books but this one just got my attention and decided to give it a try. It has been laying around and roaming in our bookshelf but I never thought of reading it until last year and I must say it changed my approach towards wealth, riches, finance, and saving. The part I usually love most in the book is "Paying Yourself" A part of what you earn is yours to keep. I also liked the illustration the writer used in the book.

Oh my God! So much memory from the book. I have even listened to its audio version lol to show how much I love the book and the lessons it carries.

I am glad to refresh my memory of The Richest Man In Babylon from your article. And again, nice to meet you JH. Thanks for sharing this great piece with us.

$ 0.05
2 months ago

You're welcome and nice to meet you here too. I think this is the book where most if not all financial gurus got the concept of 'paying yourself first' I just wish I have learned about this book before I got my first job. Hehe.

$ 0.00
2 months ago

Oh well, it's not too late to apply it now. I am sure you will do very well now after doing that. And I don't doubt it.

$ 0.00
2 months ago

Thanks. It's much clearer for me now. It's never too late to start. 😉

$ 0.00
2 months ago

Yeah. It's not too late to. Good luck or better still, all the best😉

$ 0.00
2 months ago

Yup. I'm Batman. I don't believe in luck. 😅😅😅😅. Thanks

$ 0.00
2 months ago

Lol. I already changed the phrase hehehehe. Now I know better Mr. Batman lol

$ 0.00
2 months ago

Masearch nga yang book na yan, kuya!

$ 0.00
2 months ago

Yup. Google mo lang. Nakalimutan ko na Kung saan ko na kuha ang audiobook. Hehe.

$ 0.00
2 months ago

yes kuya, nakita ko na hehe. thank you!

$ 0.00
2 months ago

Great! I love Richest Man in Babylon and heard its audiobook many times over. It's actually where I learned the 10% rule and eventually started practicing it. All good :)

$ 0.00
2 months ago

Hey, farmgirl. You are still roaming around lol. You bet, I also learned that from this book admit has been my best finance book since 2020 lol

$ 0.00
2 months ago

Haha and you're here too! You're one gallivanting lady! I adored it the first time. The audiobook became my music for how long I dunno :D

$ 0.00
2 months ago

Yes I was here😂😂 I knew sooner or later you were gonna find that out. I just didn't think I would be dragged back here after already telling you I am going off on the other side 😂😂 I love the book as much.

You know the funny thing? I listened to the audio version while at the farm doing what you know.......FARMING or better still working 😂😂 Okay bye now! Lol🏃‍♀️🏃‍♀️

$ 0.00
2 months ago

Yup. It's a great book. And yes, I also have the audiobook.

$ 0.00
2 months ago

Awesome! The author's ideas are 'gold' and quite achievable when one really puts them into practice :)

$ 0.00
2 months ago

Yup. It takes some determination and discipline

$ 0.00
2 months ago

Spot on!

$ 0.00
2 months ago