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The Richest Man In Babylon

Module Units

The 5 Laws Of Gold

Old Kalabab, gives a group of men 2 options:

1.A large bag of gold, or,
2.A tablet inscribed with wisdom.

All the men chose gold. Old Kalabab said that this is what most people would choose, i.e., they enjoy their present without worrying about their future.

To explain this better, Kalabab tells the story of Arkad’s son, Nomasir. Once upon a time, Arkad gave Nomasir both gold and wisdom, and challenged to prove that he can be trusted in matters of money. Nomasir left and returned after 10 years. He explained that he lost the gold that was given to him by his father, but used wisdom to regain the wealth he had initially lost.

Nomasir then goes on to tell the 5 laws of gold that his father taught him. Everyone of us should apply these laws in our lives:

1.Gold comes gladly to any man who puts at least 10% of his earnings to create an estate for him and his family’s future. One should create a valuable business that will generate income for him in the future.

2.Gold works for a person who uses it wisely and multiplies itself as time passes. He explains the power of compounding. Let's try and understand this point with the help of an example:

The rate of interest is assumed to be 10% p.a.

As we can see, in the first 10 years, the value of your savings increased by only ₹159, but in the next 10 years it increased by ₹413, and, in the last 10 years it has increased by more than ₹1000.

Higher the number of years you will save your money for, higher will be the growth of your savings, so start early.

3.Gold will only hold on to you if you take advice from men who are experts in this field. Be cautious with your money. Don’t take a huge amount of risk for a small rate of return.

4.Gold slips away from a person who invests his money in a business he is not familiar with. Don’t invest in a business that you are not familiar with. Your 1st goal should be to protect your earnings from losses. Your 2nd goal should be to earn a small return on your savings.High returns should never be your priority.

5.People who generally offer schemes with super high returns are frauds and that is why we should stay away from them. It is sad to see that in this day and age, scams like the Saradha scam still happen, where people in the low-income group lose their money. Be smart with your savings. Never look for high returns.

“Our wise acts accompany us through life to please us and to help us. Just as surely, our unwise acts follow us to plague and torment us”.

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