The Richest Man in Babylon: Three Key Lessons

Here's a quote from The Richest Man in Babylon that summarizes the three key lessons learned in chapter one:

You have learned your lessons well. You first learned to live upon less than you could earn. Next you learned to seek advice from those who were competent through their own experiences to give it. And, lastly, you have learned to make gold work for you.

Simply great advice. Here's how I translate these three key learnings and recommend you apply them:

1. Spend less than you earn. It's the one way that the majority of people reading this can become wealthy.

2. Seek advice from people/resources you know and trust. This means friends and family as well as magazines (I recommend Money), books (here's my recommended list) and websites like Free Money Finance. Learn all you can with the intention of becoming your own best advisor. In my opinion, the best manager of your money is you.

3. Make your money work for you. Simply said, invest the amount you generated from spending less than you earn (I like index funds as investments) and do this for many, many years. Then, time and the power of compounding will start to work for you -- making you wealthy over time.

Comments

[Darren M]

Indeed it is a great book. I've finished reading it for the second time. I read something like this during my half hour work lunch break. Incidentally, my cousin laughed out loud when he saw me with this book. What is it they say again about not judging a book....?