I have just finished reading The Richest Man in Babylon by George Samuel Clason.
Considering this book was written in 1926 the "universal laws of financial abundance" set out in the book could not be more relevant to modern day times as they were then (the only difference being we trade in currency now the book talks about trading cattle and money as bags of gold)! You can find this book on Amazon, the kindle version is only 45pence, it will be the best 45 pence you have spent if you read the book and follow the advice.
While on the subject of Amazon I saw a great review that summarises the main points made in the book:
"The 7 simple rules of money:
1) Start thy purse to fattening: save money. (Save 10% of what you earn)
2) Control thy expenditures: don't spend more than you need. (If you have debt pay off 20% of your earnings each time you are paid)
3) Make thy gold multiply: invest wisely.
4) Guard thy treasures from loss: avoid investments that sound too good to be true.
5) Make of thy dwelling a profitable investment: own your home.
6) Ensure a future income: protect yourself with life insurance.
7) Improve thy ability to earn: strive to become wiser and more knowledgeable."
The stories in the book and the way everything is explained can be related to anyone's financial life be they rich or poor
With everything that has happened over the last 10 months with the pandemic and the amount of people now out of work and struggling financially this book is a great motivator to make you want to do better financially and to start thinking of ways to make more money.
If you are out of work at the moment, do you have skills that you could offer in return for payment? There are sites like Fiverr and Taskerr and loads of others where you can set yourself up and start offering your services. (Please note if you do start working for yourself for the first time please remember to register as self employed, speak to an Accountant and account for your taxes)
Some of the best advice I found in the book was for people that have debt and want to pay it off, it suggests if you have debt using 20% of what you earn to paying off your debts as well as saving 10% of what you earn and then living off the remaining 70%.
I know for some people reading this that earn a lower wage every penny is spoken for but it is surprising when you go through your spending where you can make small savings that can go towards your savings.
It also suggests, once you are saving 10% of everything that you earn then investing that money into something that you know a lot about and know what you will definitely receive a return on (one example of this could be a high interest savings account and I'll use that example to explain this), it then also says to make the money that you earn from that investment work for you and this is where compound interest can come in. If you save £100 and you make 2% interest on that £100 in the first 12 months in the second year you will earn interest on £102 and in the third year if nothing else was to be paid in you would earn interest on £104.04 and so on. This is great if you are saving long term for retirement or to buy a house in the future as each year you earn interest on your original saving amount plus any additional money you have added (your 10% of your earnings that you're paying into it each time you are paid) plus any previous interest you have earned on those savings.
It also covers money mindset and gives examples of how our mindset can hold us back from success or push us towards success. One example from the book is of a merchant who kept borrowing even though he didn't have the means to pay it all back, this is still popular now with credit cards and payday loans with ridiculous interest rates that if you don't pay it back before the interest kicks in it's near impossible to pay it back, especially if you are on a tight budget. The merchant ended up having to leave the city and he lost everything because in his mind he thought that he couldn't pay it back so he didn't try! Years later he returned to the city and used the above mentioned method to pay his debts and set himself up with savings and investments but he wasted all of that time in between because in his mind he believed he had no way out.
I worked with someone a few years ago that told me they wanted to start saving but had no spare cash at all, everything was spoken for. When we looked at their spending they were getting 3 coffees a day at roughly £2.25 per coffee (spending £140 on a normal working month based on working 50 weeks of the year). By cutting this down to one coffee a day and saving the rest they were able to start saving. It wasn't until we looked at their spending that their mind shift changed and they realised by making some small changes they could free up some money to put aside for savings.
When was the last time you went through your expenses to see if you can be making any additional savings?
By having savings you can also create an emergency fund for when life's mishaps happen as they do. It takes so much pressure off mentally knowing you have that money there if you need it.
There is so much more value to be found in this book if you decide to read it. I highly recommend it. If you do read it, I would love to know what you think. You can either comment below or email me on email@example.com