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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'
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."
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.
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."
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?
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.
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."
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."
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.
To sum it all up.
Save at least 10 percent of your earning and use no more than 90 percent for your expenses.
Cut down your expenses. Simplify your lifestyle and plan your expenses.
Invest your money where you can earn passive income.
Avoid any get-rich-quick schemes they are most probably scams.
Own your home. Better yet, find a way to earn from your home.
Get an insurance policy that comes with an investment plan. You can make your money grow while securing your future.
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.