"Wealth is the slave of a wise man. The master of a fool." Seneca
Sometimes the best advice is the oldest. How many times have we disregarded the tried and true wisdom of our Parents and Grandparents only to return moments later with a humbled grin confessing that hey were right all along.
The same thing holds true with your finances and pursuits for financial independence. Now the wisdom I speak of does not come from anyone in my family but from a very small book (160 pages), written in the 1920s by George Clason. To be consistent with its theme, the book is inexpensive:
Available from Amazon.com for as little as $2.99 for the book.
Or $10.97 for the Audiobook:
Now lets look closer at the book and some of the themes. The book is written in short parables. Each story has its own distinct moral. This makes the book easy to understand and the themes memorable:
Seven Cures for a Lean Purse
1. Start thy purse to fattening - One tenth of what I earn is mine to keep. (Pay yourself first)
2. Control thy expenditures - Live off of less of your income. Create a budget – and stick to it.
3. Make thy gold multiply - Once you start to build up some capital, invest that money so that it will make more money for you.
4. Guard thy treasure from loss - Invest in things that will safeguard your principle. Minimize your risk.
5. Make of thy dwelling a profitable investment - Owning your home is preferred to renting.
6. Insure a future income - Invest for your retirement and future expenses (College for the kids)
7. Increase thy ability to earn - Grow your business or look for opportunities to earn more as an employee.
The five laws of gold are pretty self explanatory, again it is the story that is told that makes these laws come to life.
The Five Laws of Gold
1. 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.
2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
4. 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 who are skilled in its keep.
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.
Some of this advice is timeless, tried and true. It is funny how something written over 85 years ago can still be so relevant and impactful. If you haven’t read this book yet – I highly recommend it. If you have read it, I’d be interested in your personal review.