Many people believe that having money is what makes them wealthy. Although money certainly beats the alternative, the truly successful people understand that it is not merely the possession of money that makes them wealthy, but rather it is their ability to make their money work for them that makes them successful. In other words, cash flow is the true judge of a wealthy person. But how do you build your cash flow?
The Richest Man in Babylon by George Clason is a timeless classic that provides financial advice through a collection of parables set in ancient Babylon. The characters in the parables learn simple lessons in financial wisdom as they live through their experiences in business and managing household finances. This book refers to people who don’t have much money as having a lean purse. Here are seven cures for a lean purse:
- Fatten up your net worth by earning and saving
- Control your expenses by discerning necessary expenses from unnecessary desires
- Make your money multiply by earning interest and investing
- Guard your wealth from loss by ensuring that your principal is safe
- Put your money to work for you
- Insure a future income by preparing for retirement and to buying insurance
- Increase your ability to earn by becoming wiser and more knowledgeable
This book also describes what it calls “The Five Laws of Gold”, which are the five laws of money. They are:
- Save 10% of your gross earnings.
- Money makes more money for the financially wise
- Being cautious is prudent when spending or investing your money
- Educate yourself or else rely on an expert
- Money flees the man who would force it to impossible earnings so don’t be greedy
Entrepreneurs should not fall into the trap of simply believing that if they build it, the clients will come. Sound financial principles coupled with innovative business practices are a must if you want to expand and remain successful. Take the time to build a solid foundation up front so that you can more easily and sustainably reap the rewards of enduring financial success