Imagine what it would be like if you could be personally mentored by a billionaire. Do you think you would learn anything about building wealth? What could you teach your children?
According to Forbes Magazine’s list of billionaires from March 2019, Jeff Bezos sits atop the leader board of the world’s 2,153 billionaires at $131 billion! Could we learn anything about money or saving or investing from him?
A man by the name of Arkad was reportedly the richest man in all of ancient Babylon – the wealthiest city in the world. Despite its wealth, the citizens of Babylon were poor. Wealth had become concentrated in the hands of a few, while most people had a hard time just feeding themselves. King Sargon of Babylon asked Arkad to teach 100 people the secrets of attaining wealth.
While Arkad is a fictional character from the book “The Richest Man in Babylon”*, the secrets of curing a small savings (he calls it a ‘lean purse’) are the same today as they have always been. This is a book I like to read often. While at younger ages, I asked my three children to read it; and again as they’ve matured.
In this first of two posts on ‘Your Personal Billionaire Mentor’, we’ll look at the first two lessons that Arkad taught his students. In ‘Your Personal Billionaire Mentor’ – Part 2, we’ll dive into the remaining five secrets to building wealth.
First Cure – Start
What skills do you possess for your job? Didn’t you have to learn them? Well, here’s some good news about building wealth, especially to those who would think, “I’m just not that smart.”
Because you learned the skills you need to succeed at your job, you have already shown you have the ability to learn. Guess what? That means you can also learn the necessary skills to make wealth…because it is a skill, not a matter of luck. Each person has a stream of money from which to divert a portion to his own purse (savings).
Arkads first rule is this: “Do this with your purse – for every ten coins you put in, take out only nine. It will then grow and you will feel good about the increasing weight of your purse.”
This is the pay-yourself-first concept. A strange truth that I’ve noticed in helping others to save is that when you commit to this regimen you will manage to get along just as well as before. And before long, saving will come to you more easily than before.
What do you desire most? Is it the gratification of your short-term desires each day – cars, bigger houses, expensive clothing and leisure? Or is it substantial long-term assets like lands, real estate, and income-producing investments? The coins you take from your purse bring the former of these. The coins you leave in will bring the latter.
The Second Cure – Control Your Expenses
A lack of savings rarely has anything to do with the amount of your wages. I’ve counseled with plenty a high-income earners with little savings. Arkad taught an unusual truth: “that which each of us calls our necessary expenses will always grow to equal our incomes unless we protest to the contrary.”
The concept here is don’t confuse your necessary expenses with your desires. He also said that each of us is burdened with more desires than we can ever gratify. So, carefully study your accustomed habits of living and let your actions demand 100% of the value from each dollar you earn. Spend only nine-tenths of your earnings. If you are a charitable person, consider only eight-tenths of your earnings by paying yourself 10% and then giving 10%. While there is nothing wrong with enjoying the fruits of our labor, one must always keep perspective of longer-term goals.
Those are the first two gems of wisdom from your billionaire mentor.
We hope this gets you thinking. And, here’s some additional good news…you don’t have to be a billionaire to have an amazing retirement. All you need is a strategic plan that can help you manage five core areas…income planning, investment planning, health/life insurance planning, tax planning and estate planning. We think it’s a lot like putting together the pieces of a puzzle in which some of the pieces are continually changing!
If you would like help setting clear direction for your retirement, contact us today for a complimentary assessment of where you are relative to your retirement goals and recommendations that can get you where you want to go.