Tuesday, September 1, 2009

The Golden Slaves

"A tenth of all that you earn is yours to keep" advised the richest man in Babylon. "What did he mean?" I asked myself, "Wasn't the money I spent to buy myself the finer things in life like a new 60" TV or an iPhone money that I enjoyed and kept?". The richest man in Babylon continued, "Every dollar that you spend puts money into someone else's pocket. The money that you keep is that you save."

Imagine that the money in your bank account came to life and each dollar stood tall representing a muscular slave bulging with strength. The man was no ordinary slave though, he was a golden slave. He could be put to hard work and would create value growing any venture he engaged. He would go on to eventually have children. His children would be born into slavery though and would be immediately be put to work. Thus your number of slaves would multiply and your capacity earn would be exponential. While you sit on the beach and enjoy the Monday morning breeze, your golden slaves would be out toiling to bring you riches. From time to time they would come back to you carrying bags of cash, each time the bags growing larger. You feel content with your trusted golden slaves. They are working hard, ensuring your wealth multiplies.
This is the paradigm of the investor. He doesn't work for money; rather he lets money work for him. That's one important distinction between the rich and poor. The poor spend their lives chasing money, so that they can upgrade their cars and houses. They burden themselves with debt. Then when the end of the month comes and they get their paycheck, it escapes them faster than quicksand. It goes towards paying bills, debt, and other expenses. Soon they realize its only the beginning of the new month and they will have to take on more debt in order to survive. They continue this vicious cycle burying themselves deeper in debt with the passing of each month. Effectively they work their entire lives to put money into other people's pockets.
The rich on the other hand put their earnings to work early on. They invest and multiply their savings and work on building a steady stream of cash that will come to them regardless of whether they work or not. They focus on passive income. Only, once they have excess money, do they start treating themselves to the finer things. They never get themselves into destructive debt.

From a spiritual, what goes around comes around. Every dollar that you give out in charity helping the needy comes back to you multiplied. It leaves your pocket and goes into the possession of God. The Lord of the Worlds simply multiplies it on your behalf and returns it to you at a later stage of your life. Some people would say a person got lucky, when he becomes blessed with good fortune and a shower of riches. I believe it is fate. Nothing is left to chance.

The jist is, even if you only earn a small amount of money, if you follow the above principles you can work your way to a fat pocket. First put a tenth of all you earn aside. Invest that money and let it work for you. Then take another portion of your money and give it in charity to help those less fortunate. In time, your money will multiply.

Suggested readings:
Rich Dad, Poor Dad by Robert Kiyosaki
The Richest Man in Babylon by George Clason

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