This book was written by George S. Closon in 1926. even though the book was written a long time ago and based on the life of people living in Babylon. The lessons thought in the book at that time are still valid.
The book is about how the richest man in Babylon, Arket became so wealthy that the King noticed that his people needed to learn how to manage their money. So he asked Arket to teach the people how to become rich or financial free.
Arket taught them the 7 cures for a lean purse, they were:
- Start your purse to fatten
- control your expenses
- make your money grow
- protect your money from loss
- own your own home
- insure a future income
- increase your ability to earn
In order to fatten your purse, start by saving at least 10% of your income.
Control Your Expenses
To control your spending you need to make a list of your wants and needs. your needs should include transportation, food, shelter, utilities, insurance. Also keep track of your wants because as your pay goes up your spend tends to go up also.
Make Your Money Grow
Save 3 to 6 months of your monthly expenses in an emergency fund. Save this money in a high yield savings account so you can access it easily if you have an emergency. Start investing your 10% savings in a registered account like Tax Free Savings Account (TFSA) or Retirement Savings Account (RRSP). These are investment accounts that help you to grow your money.
Guard Your Money From Loss
Avoid scams if it sounds to good to be true, then it’s not. know your risk tolerance, the greater the risk the greater the rewards. avoid risky ventures. Speak to a certified financial advisor about investing your money.
Own Your Own Home
Buying your home is one of the largest financial decision you will ever make in your life. The book advises you to have a house so that your children can play in the back yard. Start by opening a First Home Buyer Savings account and save towards the down payment of your first home.
Increase Your Ability To Earn
Become certified in the skill trades or a profession that pays well. You can upgrade you knowledge and skills to make more money. If you are earning minimum wage, you need to work your way up to a management position to get better pay, or go back to school to upgrade your skills to get better pay.
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