The Richest Man in Babylon: Seven Cures for a Lean Purse Part 1, Start Thy Purse to Fattening

In the third chapter of The Richest Man in Babylon the book lists and details "seven cures for a lean purse." I'd like to share those with you over the next week and add my comments to the already great insights this book provides.

Cure #1 of the seven cures for a lean purse is:

Start thy purse to fattening.

Here's how the book summarizes this cure:

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.

In other words, save 10% of what you make. In order to do this, you need to spend less than you earn (save a portion of all you make as The Richest Man in Babylon states it). I've found that much of America has this backwards -- they spend ten coins for every nine they make. ;-)

The book goes on to highlight an associated principle that I've found to be true in my own life:

Now I will tell a strange truth, the reason for which I know not. When I ceased to pay out more than nine-tenths of my earnings, I managed to get along just as well. I was not shorter than before.

All you really need to do is separate needs versus wants versus desires. When you desire to have a high net worth, you spend on your needs and SOME of your wants. Other wants go by the wayside and, quite honestly, aren't that important to you -- you really don't "feel" the impact of not buying them. Why? Because you desire (want more) your financial independence.

The Richest Man in Babylon hits this issue of needs versus wants versus desires in the next paragraph:

Which desirest thou the most? Is it gratification of thy desires of each day, a jewel, a bit of finery, better raiment, more food; things quickly gone and forgotten? Or is it substantial belongings, gold, lands, herds, merchandise, income-bringing investments? The coins thou takest from thy purse bring the first. The coins thou leavest within it will bring the latter.

So, which do you want more -- purchases today that will be gone tomorrow or to store your treasure to grow you net worth? If you choose the latter and can follow through with that decision, it really is easy to become rich.

Click here to read cure 2.

Comments

[Cindy]

Wonderful book. I'm so glad you're covering this as I would never have read it on my own. I'm home educating my children and think this will be one of the first financial books my daughters will need to read.

[MoneyIllusion]

I wholeheartedly agree with the last statement: "Which desirest thou the most? Is it gratification of thy desires of each day, a jewel, a bit of finery, better raiment, more food; things quickly gone and forgotten? Or is it substantial belongings, gold, lands, herds, merchandise, income-bringing investments? The coins thou takest from thy purse bring the first. The coins thou leavest within it will bring the latter." I have friends who have a 1/2 million dollar house. Both spouses need to work to afford the incredible high mortgage and crazy property taxes. We have a paid off mobile home out in the country. We pay only $112 dollars a year in property taxes (ag exempt). But it sits on 1/2 million dollars of ranch land (paid off)! We lease some out to cattle ranchers. It earns us an income just sitting there. On the outside we look poor and the friends look rich but in reality they're in debt and we're not. Our net worth is much more than it appears to be. And theirs is much less than it appears to be also.
I wouldn't trade places with them for a moment!

[King V]

I bought this book early 2007, and it has helped me manage my finances well. I was able to settle my credit card and retail store account last year, all thanks to the above book. It's amazing how it uses ancient time parables to teach you methods of handling your finances better and gaining wealth.

I strongly recommend this book to everyone.

[JOSE MENDEZ]

This book is an amazing book. Even though is was written at the beginning of the XX Century, its principles have not change. I will recommend this book to anyone in need to get financially free. To be rich you might not a lot more than those advises.

[Dr. Terrence Ward]

Hello!

I bought this book a few years ago and couldn't put it down. Today, I am in the process of forming a Non-Profit corporation to teach the lessons in this book to 7th-12th graders utilizing the local library system here in my community. The fiancial path to wealth as described in this great classic needs to be taught to children as soon as possible. I urge anyone interested of the philosophy in this book to likewise pursue opening a non-profit organization to teach the lessons outlined in this book through a one to eight week program aimed at both children and adults.

[Joseph Mushalika]

I have read this extraordinary classic and find in its few pages all the advise on finance in the large modern volumes. Its simplicity is amazing and no time should be wasted in encouraging children, colleagues and anyone for that matter to read it. I have used its principles in my informal discussions with workmates and friends. Guess we should push for its inclusion in the school curriculum.
Joseph Mushalika

[MortgagesByMark]

This is a phenomenal book and it certainly changed my thinking on money when I read it. The principles in it are common sense and straightforward. It should be required reading in the public schools! It's unfortunate that the subject of money is not addresses in public education considering that money is involved in pretty much anything that you do in life. I think we would be better off as a nation by being more educated on the subject of money than any government policy could ever make us.

[Jacob]

So, 10% is pre or post income tax? If it is pre income tax, that is probably untenable for almost anyone.