We live in an age of impatience, and when it comes to money, we want more now, today, not tomorrow. Whether it’s a mortgage deposit or cleaning up those credit cards that drain our energy long after we no longer enjoy buying things with them, the sooner the better. When it comes to investing, we want easy options and quick returns. Hence the current craze for cryptocurrencies. Why invest in nanotechnology or machine learning when Ethereum is caught in an endless spiral and Bitcoin is the gift that keeps on giving?
A century ago, American author George Clayson took a different approach. In The Richest Man in Babylon, he offers the world a treasure trove—literally—of financial principles based on things that may seem outdated today: prudence, prudence, and wisdom. Clason uses the wise men of ancient Babylon as a spokeswoman for his financial advice, but the advice is as relevant today as it was a century ago, when the Wall Street crash and the Great Depression loomed.
Take the Golden Five Laws for example. If you’re looking to put your personal finances on a solid footing, no matter where you are, these are for you:
Rule 1: Anyone who gives at least a tenth of their income to create wealth for themselves and their family’s future will be happy to have gold, and more and more. In other words, save 10% of your income. at the lowest limit. Save more if you can. And that 10% doesn’t go toward next year’s vacation or new car. This is long term. Your 10% can include your pension contributions, ISA, premium bonds or any type of high interest/limited access savings account. Well, interest rates for savers are historically low right now, but who knows where they will be in five or ten years? Compounding interest means your savings is growing faster than you think.
Law 2: Gold works diligently and satisfactorily for the smart owners for whom it finds lucrative work. So, if you want to invest rather than save, do it wisely. No cryptocurrencies or pyramid schemes. We focus on the words “profit” and “employment”. Let your money work for you, but remember that you want this side of the rainbow to be long-term stable returns, not lottery winnings. In practice, this can mean that stocks of established companies offer regular dividends and a steady upward trend in share prices. You can invest directly or in unit trusts through a fund manager, but before giving up a penny, see Laws 3, 4 and 5…
Law 3: Gold relies on the protection of prudent owners who invest under the advice of wise operators. Please consult a qualified and experienced financial advisor before you do anything. If you don’t know, do some research. Check them out on the internet. What expertise do they have? What kind of customer? Read reviews. Give them a call first, get a feel for what they can offer you, and then decide if a face-to-face meeting is feasible. Check out their commission schedule. Are they independent or are they affiliated with a specific firm contracting to market that firm’s financial products? A decent financial advisor will encourage you to prepare the basics: pensions, life insurance, where to live, and then guide you through investing in emerging markets and space travel. When you’re comfortable finding an advisor you can trust, listen to them. Trust their advice. But check your relationship with them regularly, like once a year, and if you’re not happy, look elsewhere. Chances are, if your judgment is correct in the first place, you will stick with the same advisor for many years to come.
Law 4: Gold slips away from those who invest it in businesses or purposes they are unfamiliar with, or those who do not gain the approval of its holders. If you have in-depth knowledge of food retailing, be sure to invest in supermarket chains that are increasing their market share. Likewise, if you work for a company that has an employee stock ownership plan, it makes sense to take advantage of it if you’re sure your company has good prospects. However, you should never invest in any market or financial product that you do not understand (remember crashes!) or that you cannot adequately research. If you want to try currency trading or options trading and you have a financial advisor, talk to them first. If they’re not keeping up, ask them to refer you to someone who can keep up. The most important thing is to avoid anything you are not sure about, no matter the potential reward.
Law 5: Gold flees those who seek impossible income or follow the tempting advice of liars and conspirators or believe they are inexperienced. Likewise, the Fifth Law follows the Fourth Law. If you start scouring the internet for financial advice and wealth-building ideas, your inbox will soon be filled with ‘cheaters and conspirators’ promising £1 if you invest £999 in their ‘system’ Become 1XXXXXX GBP CME. Remember, the only people who make money in a gold rush are those who sell shovels. Buy the wrong shovel and you’ll be in debt in no time. Not only will you pay for a system that has no proven value; by following it, you may lose more than you paid for. At least you should check the real reviews of the product. Never buy any system, investment vehicle or financial product from any company that is not registered with a national regulator such as the UK Financial Conduct Authority.