Creating Wealth With The Five Laws of Gold
Creating Wealth With The Five Laws of Gold
People are always searching for the master key to wealth – a magic formula that, once learned, will set them up for life.
You know what I’m talking about – that lotto ticket you buy once a month, that book you bought promising to make you millions, or that broker you listened to because you thought he knew something you didn’t? We as human beings can’t help it – it’s natural to want more, and it’s natural to want the best for our family. But what if I told you there IS a master key to riches? There is – but it’s not what you think.
The Five Laws Of Gold were first published in a little book called “The Richest Man In Babylon” by George Clason in 1926.
They are the story of a young man who was given a bag of gold and a tablet with the five laws of gold inscribed upon it, and told to go and make his fortune in the world. When he returns many years later, he tells his family how he lost all of his gold, but by using the 5 laws inscribed on the tablet was able to make all the gold back and much more.
Using The Five Laws Of Gold For Yourself
So, what are these timeless Laws of Gold? Well, here they are, in order – keep in mind they are written in the spirit of the book (an old style story), so I will explain them in today’s terms as we go too.
The First Law Of Gold
1: “Gold cometh gladly and in increasing quantities to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.”
Basically this means to “Pay Yourself First” – put away a set amount every pay, and no less than 10%. Make sure you never see that money (have it deducted automatically) – otherwise you will spend it!! And if you put it to work, you will find that your money will grow beyond belief.
The Second Law Of Gold
2: “Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.”
Invest, invest, invest! By “putting your money to work”, you can use the power of compounding to grow even small amounts of money into large ones over time. Plus, money never complains, it doesn’t need time off and it’s always ready to work. You’ve just got to know where to put it.
The Third Law Of Gold
3: “Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.”
This means – get an advisor, get a mentor, get a teacher – get someone who is wise in the ways of handling money, and use their advice. The reason I say advisor and mentor is that it is great to surround yourself with people more knowledgeable than yourself, but it is also good to be educated enough to understand and challenge them.
The Forth Law Of Gold
4: “Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.”
Basically this is saying – take the advice of your advisor or mentor. But it also can mean becoming familiar with your investments – getting educated about investing, and then back-testing your strategy to find out how well it works and what you can expect.
The Fifth Law Of Gold
5: “Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.”
Don’t push your money – don’t use leverage you can’t afford. Many people had margin loans called in during 2008, and then again, and again, and again. Many went broke as a result. The next part of this advice is don’t trust the advice of charlatans, or people promising you the world when that little voice in the back of your head tells you they can’t deliver. Sometimes these people can be hard to spot, but a good rule of thumb is don’t pay thousands of dollars for education, courses, franchises, or businesses without thoroughly checking them out, asking others or researching it on the internet first.
So there you have it! They may not be the stuff that spruikers promise you on stage, but if you put these magic laws to work, you will build a great foundation of wealth do to with whatever you wish – a nobel cause. And that makes me happy.
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June 30, 2009
Tags: Market Basics, The Basics Posted in: Articles On Building Wealth
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