I’ve learned so many lessons after reading the book The Richest Man in Babylon by George S. Clason. It’s really an eye-opening classic book that really helped me change my view about personal finance.
Yesterday, I shared 5 important self-help lessons from The Richest Man in Babylon book I learned and hoping others could learn too.
As I mentioned, there’s a lot of lessons we can learn from this classic book that can help us improve our finances. This book alone can really be a life-changing creation for many people who are seeking knowledge and information about personal finance tips to be apply in their personal lives. Including me of course. I was blown-away by the value I got from this book. There is so much to learn!
To continue sharing what I learned, today I will share the 7 Cures for a lean purse shared by Sir George S. Clason in his book. This is another worth reading article that can help you realize the importance of personal finance and the ‘cures‘ how to achieve our financial goals.
By knowing these 7 cures, I hope you can make an action plan how you can apply these learning in your own lives to help in your financial freedom journey.
The classic tale of the 7 cures for the lean purse was talked about Arkad who was known to be the richest man in Babylon. The king of Babylon requested Arkad to teach other ‘babylonians‘ how to accumulate wealth the way he did.
He was requested to share lessons to anyone who are interested in accumulating wealth. Arkad agreed and divided the class in seven days. He focused each day on a particular topic on how to save and earn more money to build wealth.
7 cures for a lean purse
1. Start thy purse to fattening
This first cure talked about the fundamental of accumulating wealth which is paying ourselves first. It point out to save at least 10% of what we earn and save it for our self. This will be set aside and will ONLY be use for investing or making our money grow.
As the book says “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 goodin thy hand and bring satisfaction to thy soul.”
The coin analogy above tells us to save 10% of what we earn. As we do it consistently, it will grow and will create lean purse for us. Follow this curse and you will definitely increase your savings.
2. Control thy expenditures
This 2nd cure from the book The Richest Man in Babylon book teach us to spend only on what we need. We should be in control of our finances and spend wisely. The book suggest not to spend money on material needs even if we can and focus instead on saving 10% of our income.
To help us control our expenses, we should start tracking them. You can read my article 5 Simple ways to track your expenses here. By knowing where exactly you spend your money, you will be able to adjust and control or cut those unnecessary ones.
In this cure, Arkad insist to know the difference between the “necessary needs” and “desires“. We need to make sure we are focused on necessary needs than desire and consistently saving 10% of our income. Here’s another quote taken from the book.
“Confuse not the necessary expenses with thy desires. Each of you, together with your good families, have more desires than your earnings can gratify. Therefore are thy earnings spent to gratify these desires insofar as they will go. Still thou retainest many ungratified desires.”
Here’s another one.
“Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify thy worthwhile desires without spending more than nine-tenths of thy earnings.”
3. Make thy gold multiply
This cure tell us that once we save money (from 10% of our income) we should look for ways to grow them. We should not just keep it in under the bed or inside a piggy bank where there are investment vehicle we can use to grow them on their own.
Look for investments that suits your personality, make sure you knew it and start investing your money. Another good example is investing in savings account. Although the return seems to be small, it is better than keeping them under your bed.
“Behold thy lean purse is fattening. Thou hast disciplined thyself to leave therein one-tenth of all thou earneth. Thou hast controlled thy expenditures to protect thy growing treasure. Next, we wil lconsider means to put thy treasure to labor and to increase.
Gold in a purse is gratifying to own and satisfieth a miserly soul but earns nothing. The gold we may retain from our earnings is but the start.The earnings it will make shall build our fortunes.”
4. Guard thy treasure from loss
This cure talked about protecting our capital or investment. This clearly tell us to only venture on investment that is safe and we really know. We should always remember that each investment carry risks and possibilities to lose your money.
In short, we should understand every investment we are venturing to. The best things we can do about this is to invest first in ourselves.
“Misfortune loves a shining mark. Gold in a man’s purse must be guarded with firmness, else it be lost. Thus it is wise that we must first secure small amounts and learn to protect them before the Gods entrust us with larger.”
This cure also warn us from debting other people. It says that we should know that the person has the capacity to pay before we lend them our money.
“Before thou loan it to any man assure thyself of his ability to repay and his reputation for doing so, that thou mayest not unwittingly be making him a present of thy hard-earned treasure.”
5. Make of thy dwelling a profitable investment
This 5th cure for the lean purse in The Richest Man in Babylon book suggest us to own our home instead of renting. Money paid in rents can be use to invest and grow our wealth.
“To a man’s heart it brings gladness to eat the figs from his own trees and the grapes of his own vines. To own his own domicile and to have it a place he is proud to care for, putteth confidence in hisheart and greater effort behind all his endeavors. Therefore, do I recommend that every man own the roof that sheltereth him and his.”
“Nor is it beyond the ability of any well intentioned man to own his home. Hath not our great king so widely extended the walls of Babylon that within them much land is now unused and may be purchased at sums most reasonable?”
6. Insure a future income
This basically tells us about preparing for our retirement. We should plan ahead of time and insure future income of our investments. It also talked about protecting our family in case something happen to the bread winner.
That’s why it is also a fundamental steps in personal finance to learn more about insurance. You can read my insurance 101 article here. This can really help us prepared and have a piece of mind along our journey.
“The life of every man proceedeth from his childhood to his old age. This is the path of life and no man may deviate from it unless the Gods call him prematurely to the world beyond. Therefore do Isay that it behooves a man to make preparation for a suitable income in the days to come, when he is nolonger young, and to make preparations for his family should he be no longer with them to comfort andsupport them.
This lesson shall instruct thee in providing a full purse when time has made thee less able to learn.”
7. Increase thy ability to earn
This is the last and 7th cure. One of the best way to accumulate wealth is to increase our ability to earn. Investing in education for ourselves open more doors of opportunities that can help us achieve our goals.
That’s why my first article on this blog is the best investment that gives more than 100% return.
“The more of wisdom we know, the more we may earn. That man who seeks to learn more of his craft shall be richly rewarded. If he is an artisan, he may seek to learn the methods and the tools of those most skillful in the same line. If he laboreth at the law or at healing, he may consult and exchange knowledge with others of his calling. If he be a merchant, he may continually seek better goods that can be purchased at lower prices.”
The seven cures for lean purse shared above are taken from the book The Richest Man in Babylon. The quotes I took are shared just to give us inspiration and help us realize to take action in changing our financial status.
I learned a lot from this book and I’m sharing them to you. I’m hoping that by sharing these information, I can help you realize the importance of being financially literate in the achievement of our dreams.
By learning lessons like this, we can create action plans to change our lives for the better.
I wish all of us good luck in our financial freedom journey.