The 7 Cures of a Lean Purse (Wallet)

According to “The Richest Man of Babylon”, the 7 cures of a lean purse are; saving 10% of all of earnings, controlling your expenditures by budgeting for your most necessities, investing the 10% to earn interest or make profit, guarding your investments to make sure they are soundly save, owning your own home, investing for your old age and investing in yourself.

The Richest Man of Babylon’ is one of the best-selling novels written by George. S. Clason in 1926.The setting of the story is in the ancient city of Babylon .The main character is one known as Arkad, a very rich man who was famed for his great wealth which kept increasing in spite of his being charitable and generous towards his family and fellow citizens.  His age mates had been wondering how Arkad managed to acquire so much wealth while they could barely make ends meet and ‘yet, once we were equal”. Arkad response is that they may have failed to learn or observe the laws that govern the building of wealth. He therefore takes it upon himself to teach them these laws which he refers to as the 7 cures of a lean purse.

The 1st cure of a lean purse is saving 10 % of all your earnings.

This may sound too simple but the truth is always simple. Whatever your source of income, you must set aside this amount in order to fatten your purse. If you do this consistently without failure, your purse will start ‘fattening’.

How do you start saving when your earnings do not meet all your expenses? The 2nd cure of a lean purse seeks to answer the above pertinent question; “Control thy expenditures”. The richest man of Babylon is aware that our earnings, be it on daily basis or monthly basis are never enough to cater for our many needs. You are warned not to confuse your necessary expenses with your desires since our desires will always be more than our earnings .He notes,” all men are burdened with more desires than they can gratify”. The trick here is to critically analyze your expenses and identify those that are very basic at every specific stage in your life. Do you remember that famous hierarchy of human needs by a psychologist known as Maslow? At the lowest level are water, food, shelter and clothing.

Once you have identified your most necessary expenses, you can now budget them. A budget will assist you to allocate the remaining 90% of your earnings to the most important items and leave you with some coins for saving. The richest man of Babylon describes a budget thus, ‘like a bright light in a dark cave thy budget shows up the leaks from thy purse and enables thee to stop them and control thy expenditures for definite and gratifying purposes ‘.

In a nut shell a budget helps you to; avoid risky spending habits, tracking your expenses, and focusing on your financial goal of increasing  your savings.

The 3rd cure of a lean purse is making your gold (savings) multiply .You achieve this by putting them in profit-making investments to earn you interest. Once you have disciplined yourself and have already formed the habit of saving 10% of your earnings, your purse is now growing bigger and bigger. You cannot continue keeping your savings in your purse lest you lose it.Moreover, as much as it may feel good and satisfying to have a fat wallet in your pocket, it is advisable to put your money to labor for you .You can loan out your money to those in income generating activities; business men and women as well as financial institutions where it will earn profit.

This profit can also be invested such that you create a   golden stream of wealth available for such other uses as you may decide. This is well captured by these words of Arkad, the Richest man of Babylon when he says, ‘Behold from my humble earnings, I had begotten a hoard of golden slaves, each laboring and earning more gold .As they labored for me, so their children also labored and their children’s children until great was the income from their combined efforts.

Today, there are several saving avenues such as banks, insurance companies, money markets, government bonds and T-bills and Saccos among others. You can open saving bank account where you deposit your savings regularly or through Certificate of deposits (CDs), for long time savings. Putting your money in Savings and credit cooperative organizations (SACCOs),has more benefits since apart from your ability to take loans based  on the number of shares ,at a lower interests than that charged by most banks, you are also going to get dividends at the end of the financial year. Investing your savings is one thing but making sure that it is soundly safe is quite another.  This is addressed in the 4th cure of a lean purse.

The 4th cure for a lean purse is, ‘Guard thy treasure from loss”

The first sound principle of investment is security for thy principal. You cannot afford to entrust your hard earned money with any Tom, Dick and Haary.It is upon you to first establish the risks and dangers that may be involved where you are putting your cash whether you are loaning it out to an individual or a financial institutions. Make sure that the original sum of money invested (principal), is safe; that it will bring you interest and you can access it when the need arises.

How do you go about this? According to the richest man of Babylon, do not be led by your desires for quick riches. Ensure that the person or institution has the ability to repay and the reputation for doing so.Carry out thorough research to establish this. You are also advised to seek wisdom from those who have experience and expertise on money investment matters; ‘Better by far to consult the wisdom of those experienced in handling money for profits —-Guard thy treasure from loss by investing only where thy principal is safe. Where it may be reclaimed if desirable and where you will not fail to collect a fair rental, Consult with wise men .Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments’.

The 5th cure of a lean purse is,”make thy dwelling a profitable investment’. Now that you have been able to keep save at least 10% of your earnings by controlling your expenses and even gone a step further to invest and secure your wealth, how do you enjoy it? What about your family? The richest man of Babylon is of the view that now it is time you owned your own home. What are some of the benefits of owning your own home? You avoid paying rent to exacting landlords. You will raise your children in a spacious clean, secure environment. You have space where you can set up a kitchen garden and even raise chicken. In addition, owning a home boosts your confidence.

The richest man of Babylon notes that,”it is not good to raise your family in unseemly quarters where your wife have not a spot to raise the blooms and their children have no place to play their games except in the unclean alleys”.

As much as every one of us desires to own a home, this is quite an expensive undertaking. However from experience we have witnessed cases where one saves with a SACCO, take a loan three times your savings, purchase a plot, build a small house, moves into it and from there you are able to comfortably plan for your dream house. The other option is to buy a house through mortgage. This is a far much better option than just paying rent month in month out with no hope of ever owning the house.

The 6th cure of a lean purse is, ’insure a future income

The life of a man starts from childhood to old age. It is therefore imperative that you make prior preparations for the future. According to the Richest man of Babylon, “It behoves a man to make preparations for a suitable income in the days to come ,when he is no longer young ,and to make preparations for his family should he be no longer with them to comfort and support them’

There are suggestions on how you can prepare for the old age; You can purchase land or houses whose values is bound to appreciate with time and their earnings or sale will provide well for you and your family. The second suggest is that you can loan a small sum of money to money lenders and increase it at regular basis to earn interest. This is similar to buying an insurance cover. You can also invest some substantial amount in the money market where it will continuously earn interest for future usage.

The 7th cure of a lean purse is, ‘increase thy ability to earn”.

This can be equated to sharpening your mind, acquiring new relevant knowledge and skills in your area of trade or profession will go a long way in aiding to keep abreast with changes and demands in life. You will be competitive and therefore valuable to the society no matter your work description. The richest man of Babylon’s advice is that you need to set targets. You can’t be everything at the same time. Your targets should be specific and achievable. Some of the secrets to success include taking more interest in your business or job, more concentration and persistence in your efforts.

Setting targets for your personal development is very important. I remember how I used to set targets for my own personal development and I am reaping the benefits; sometimes back in 1990s before computers became available in our places of work, I took a part-time course in typing skills. By the time computers became available and accessible, I took some course in basic computer skills. I was in a better position to use computers since I had already mastered the keyboard during my typing classes. When I enrolled for my Master class in year 2003, I managed to write and type my course project and submit it on time for my graduation.

 As the richest man of Babylon points out, change is inevitable and man must stay ahead lest he be swept aside. Finally, the 7th cure of a lean purse is summarized thus,”Always do the affairs of man change and improve because keen minded men seek greater skills that they may better serve those upon whose patronage they depend. Therefore, I urge all men to be in the front rank of progress and not to stand still, lest they be left behind”.

In conclusion, the richest man of Babylon may have lived centuries   ago at a different time, different cultural set-up, but his words of wisdom are as relevant today as they were by then. The seven cures of a lean purse may sound quite simple but the truth is always simple; save 10% of all your earnings, control your expenses through a budget, invest your savings and make sure it is in safe hands, own your home, invest for your old age and last but not least, don’t forget to invest in your yourself; your wisdom will go alone way in making you wiser, productive and relevant in an ever changing world.

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