How to take control of your Money- Lessons from the richest man in Babylon

August 13, 2008

Women in business and black entrepreneurs and you all in business regardless of age, sex and gender, I want to share my thoughts with you this morning. As I ponder over all this discussion about credit crunch, it occurred to me that in the middle of it all, there are few enjoying an abundant life. The Richest Man in Babylon was one such man who enjoyed abundance in the midst of financial crisis. I am sure you would like to know what the few who are oblivious of the economic tides are doing. The principles they followed are similar to that of the Richest Man in Babylon back then. I have now summarised the principles for you to read and learn from the wise.

Principle One- Learn and cultivate a well-grounded understanding of the definition of money? Money is the reward for services rendered. You need to understand that borrowing money comes with a price tag which must be paid for in cash or otherwise. If you find yourself engaging in excessive consumerism to satisfy your excessive desires, this is a clear indicator that you do not have this firm grasp of the definition and the price of money. However, this level of understanding whilst important is only the start of the process of taking control of your money.

Principle Two- Irrespective of the amount of money you earn, the first person that should be paid is “You”. The principle shared by the richest man in Babylon is this; pay yourself 10% before paying anyone else. This is money for you; not to be used for entertainment but rather to be invested for your future retirement income at the very least. Aside paying yourself, you want to also help others and that takes me to the third principle.

Principle Three- Pay 10% of your income to a charity of your choice. In the Christian religion this is called tithing. This is a prosperity principle, which many of the wealthy practice irrespective of their income bracket.

Principle Four- Keep your expenditure within 70% of your income. If you practice this principal on a regular basis you will be unlikely to run into financial difficulties particularly if you invest wisely all spare cash including the 10% you put aside for yourself.

So let us now look at how you should invest your 10%? There are certain principles you must follow. It is fundamental that you preserve your capital if you are to grow your spare cash. Therefore, wise investment is critical. Investing in schemes that guarantee the preservation of your capital through collaterals that are of higher value to your capital should be the most critical focus in your investment decision. If you and I invest recklessly or emotively without careful attention to these principles, we will run the risk of loosing our future money and our grandchildren simply because we have allowed their parents to die in hands of reckless investments.

Taken together, the keys to taking control of your purse are:

· Have a healthy relationship with money

· Take control of your expenditure and limit it to 70% of your earnings; if you want to spend more, earn more; you have the mind and intellect to earn more

· Pay yourself 10% of the income you earn consistently

· Invest wisely for a decent return on investment and with a guaranteed protection to your capital

How many of these principles do you currently follow? If you need help with your handling of money, I can help you or link you up with partners who can. Please send your comments in about this post.

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