In an Over-Communicated, Intrusive World, Simple is Better
Ed

Clason’s “The Richest Man in Babylon” Part 2 – The 7 Cures for a Lean Wallet and The 5 Laws of Money

Copyright © 2007 Ed Bagley

Part 1 of this 2 Part series ends the synopsis of George Clason’s book “The Richest Man in Babylon,” but Clason raises an important question: Why should
so few men be able to acquire so much gold?

The answer is because they know how.

One may not condemn a man for succeeding because he knows how. Neither may one with justice take away from a man what he has fairly earned, to give to men of less ability.

And so it was that the good king of Babylon sought out the richest man in Babylon to teach to others in his kingdom the secrets of his success.

This is a synopsis of what the richest man taught to the people
of Babylon:

The Seven Cures for a Lean Wallet

1) Start your wallet to fattening. Save one-tenth of all you earn. Remember that a part
of all I earn is mine to keep. Do this faithfully. Do not let the simplicity of this escape you.

When I ceased to pay out more than nine-tenths of my earnings,
I got along just as well.
I was not shorter than before, and, money came to me more easily than before.

2) Control your expenses. How is it that all do not earn the same yet all have lean wallets? Here is the truth: That which each of us calls our “necessary expenses” will always grow to equal our incomes unless we protest to
the contrary.

Confuse not necessary expenses with desires. We all have more desires than our earnings can gratify. Examine which of the accepted expenses of living can be reduced or eliminated. Let your motto be 100% of appreciated value demanded for every dollar spent.

Budget your expenses so that your actual necessities are met without spending more than nine-tenths of your earnings.

3) Make your money multiply. Protect your growing treasure by putting it to labor and increasing. Money in your wallet earns nothing. Money that we earn from our money is but a start; it is the earnings generating earnings that builds fortunes.

When the richest man in Babylon loaned money to the shield maker to buy bronze, he said this: “Each time I loaned money to the shield maker, I loaned back also the rental he had paid me. Therefore not only did my capital increase, but its earnings likewise increased.”

4) Guard your money from loss. Everyone has an idea of how to make quick money; few, however, have the evidence of making money to justify their idea, scheme or offer of quick riches. The first sound principle of investment is security for your principal.

Before you loan your money to any man assure yourself of his ability to repay your loan, and of his reputation to do so. Make no one a present of your hard-earned treasure.

Consult the wisdom of those experienced in handling money for profit. Such advice is often freely given for
the asking, and may possess more value than the amount you
are about to invest.

5) Make your home a profitable investment. When you can set aside only nine-tenths of what you earn to live, and can use a part of that nine-tenths to improve the investment in your housing, do it; owning your own home is also an investment that grows with your wealth.

Your family deserves a home they can enjoy and call their own. It builds a sense of stability and well-being.

6) Ensure a future income. Build income-producing assets that do not require you to work forever. We will all grow old and die.

You should prepare a suitable income for the days to come when you are no longer younger and cannot work as hard, and to make preparations for your family should you no longer be with them to comfort and support them. Provide in advance for the needs of your growing age, and the protection of your family.

7) Increase your
ability to earn.
Desire precedes accomplishment, and the desire must be strong and definite. When you have backed your desire for saving $1,000 with the strength and purpose to secure it, you can then save $2,000.

Desires must be simple and definite. Desires defeat their own purpose when they are too many, too confusing, or too difficult to accomplish. Cultivate your own powers to study and become wiser, more skillful, and more productive.

Here is more sage advice from Clason’s masterpiece on financial matters:

The 5 Laws of Money

If you had to choose, would you choose tons of money or wisdom? Most men would take the money, ignore the wisdom, and waste the money. Here is the wisdom:

1) Money comes gladly and in increasing quantities to any man who will put aside not less than one-tenth of his earnings to create an estate for his future and the future of his family.

2) Money labors diligently and contently for the wise owner who finds for it profitable employment, multiplying unto itself in infinity if kept working diligently. Money multiplies itself in surprising fashion.

3) Money clings to
the protection of the cautious owner who invests it with the advice of men wise
in its handling.

4) Money slips away from the man who invests it in businesses or purposes that he is not familiar with, or which are not approved by those skilled in its keep. The inexperienced handler of money who trusts his own judgment, and puts his money in investments which he is not familiar, always pays with his money for his experience.

5) Money flees the man who would force it to impossible earnings, or who follows the alluring advice of tricksters and schemers, or who
trusts it to his own inexperience and romantic desires in investment.

Here is the hard lesson of the 5 Laws of Money: You cannot measure the value of wisdom in bags of money. Without wisdom, those who have it quickly lose money, but with wisdom, money can be secured by those who have it not.

This ends the condensation.

Copyright 2012 by Ed Bagley

(Ed’s Note: This story, written in 2012, identifies our current national debt as National Debt as $14,271,000,000,000 ($14 Trillion, 271 Billion). Our current national debt as of June 6, 2020 is $25,683,000,000,000 ($25 Trillion, 683 Billion) and counting. Eventually we will not be able to pay the interest on the national debt that is being created by fiat. Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.  In other words, fiat money is writing a dollar figure on a piece of paper (money) that is not secured by gold or any other asset.  Your government forgot to tell you that it has been in Chapter 7 bankruptcy for several years.)

The absolute best job in America today is a politician in the U. S. Congress.

Oh, they whine and complain a lot, but behind closed doors, they are as happy as a kid’s first visit to a candy store.

Members of Congress earn a salary of $174,000—that’s 3.4 times higher than the average full-time American worker, who earns $50,875 per year.

Even if you compare Members of Congress to more educated, private sector employees, they’re still doing pretty well—those Americans earn on average $83,000 per year according to the Bureau of Labor Statistics.

If you count the $110,000 in taxpayer-funded fringe benefits Members receive (including plush retirement plans, paid time off, and contributions to Social Security and Medicare taxes), they’re earning close to $285,000 per year.

Did you know that each Member of Congress in 2010 was also given $944,671 to set up their individual office in Washington, DC and their home district. How would you like an additional allowance of $944,000+ to do your work?

If you screw up on the job, you get fired. If a Member of Congress screws up, he or she gets to serve out their term in office. House members serve 2-year terms, Senate members serve 6-year terms. In some cases, you could—in effect—be a screw up for 6 years and get paid for doing so.

Did I mention that 47% of the Members in Congress are millionaires, with an estimated median net worth of $2.56 million. By comparison, only 1% of Americans are millionaires. Don’t tell me it doesn’t pay to be a Congressman.
 
But here in the United States, when it comes to being an overpaid federal employee, Members of Congress have plenty of company.

The average federal employee earns an annual salary almost 60% higher than the average private-sector employee — $79,000 vs. $50,000. Federal employees do have more education (on average) than private-sector workers. Their unions argue that this justifies their higher pay. But it doesn’t.

Even after controlling for education and experience, federal employees get paid significantly better — 22% more per hour, on average — than private-sector workers.

Members of Congress have also inadvertently raised “passing the buck” to an art form. There are 535 voting Members of Congress; the House of Representatives has 435 and the Senate has 100.

Should anyone question an individual member’s vote on any issue at any time, they can simply say, “Hey, I’m only 1 of 435 votes in the House” or “I’m only 1 of 100 votes in the Senate.” Hence, there is no real accountability or apparent responsibility.

I say this because the collective Members of Congress are incredibly irresponsible, especially in budget matters. Whether Democrat or Republican, they love to spend our money. Here’s how they do it:

Lesson # 1:

U.S. Tax Revenue: $2,170,000,000,000 ($2 Trillion, 170 Billion)

Federal Budget: $3,820,000,000,000 ($3 Trillion, 820 Billion)

New Debt: $ 1,650,000,000,000 ($1 Trillion, 650 Billion)

National Debt: $14,271,000,000,000 ($14 Trillion, 271 Billion)

Recent Budget Cuts: $ 38,500,000,000 ($38.5 Billion)

As an average citizen with a household budget, you know how damn stupid and irresponsible their behavior is. Here is why:

Let’s remove 8 zeros and pretend it’s a household budget to make it clear:

Annual family income: $21,700

Money the family spent: $38,200

New debt on the credit card: $16,500

Outstanding balance on the credit card: $142,710

Total household budget cuts: $385

And this is what has been happening for years, and it is now more out of control than ever.

Do you know of a credit card company that would let a family with an annual income of $21,700 run up a credit card debt of $142,710? Neither do I, but this is exactly what our representatives in Congress have done, and have gotten away with doing it.

They tax and spend our money like there is no tomorrow. In reality, they sell their votes for special interest money to get elected and re-elected, becoming a career politician.

It has become so bad that if a politician in Congress actually does something in the best interest of the county (rather than his or her own self best-interest), it is more by accident than design, and then they take credit in a fit of righteousness.

This has happened because you can never underestimate the stupidity of the American people. Think about it. We created the system that allows this kind of behavior, we freely elected the people in Congress who committed this behavior, and we appear ready to re-elect the same Members of Congress to keep doing what they are currently doing.

So don’t you dare complain when you are taxed to death, you lose more of your Constitutional freedoms, and you are told exactly what you can and cannot do in the near future, whether you like it or not. You will eventually be fined or prosecuted if you do not do as you are told by your representatives in Congress. They do, after all, make the laws that you must obey.

Sid Miller Wants to Know: What are you voting for?

 

That moment when someone says, “I can’t believe you would vote for Trump”

I simply reply “I’m not voting for Trump.”

I’m voting for the First Amendment and Freedom of Speech.

I’m voting for the Second Amendment and my right to defend my life and my family.

I’m voting for the next Supreme Court Justice(s) to protect the Constitution and the Bill of Rights.

I’m voting for the continued growth of my retirement investments and the stock market.

I’m voting for an end to America’s involvement in foreign conflicts.

I’m voting for the Electoral College & the Republic we live in.

I’m voting for the Police to be respected once again and to ensure Law & Order.

I’m voting for the continued appointment of Federal Judges who respect the Constitution and the Bill of Rights.

I’m voting for our jobs to remain in America and not be outsourced all over again to China, Mexico and other foreign countries.

I’m voting for secure borders and legal immigration.

I’m voting for the Military & the Veterans who fought for this Country to give the American people their freedoms.

I’m voting for the unborn babies that have a right to live.

I’m voting for continued peace progress in the Middle East.

I’m voting to fight against human/child trafficking.

I’m voting for Freedom of Religion.

I’m voting for the American Flag that is disrespected by the “mob.”

I’m voting for the right to speak my opinion & not be censored.

I’m not just voting for one person, I’m voting for the future of my Country.

I’m voting for my children and my grandchildren to ensure their freedoms and their future.

What are you voting for?

About the Source: Sid Miller is the Commissioner of Agriculture in the Great State of Texas.

(Ed’s Note: The current 2020 Presidential Election has been reduced to a choice between our “constitutional republic” form of government and creeping into a “socialist” form of government in America. We should not allow any political party in America to bring advancing socialism—example: The Green New Deal—under the guise of improving our constitutional republic. Every form of socialism as a government in history has failed to advance the welfare of the citizens therein. Smart people know that socialism does not secure our rights as citizens but rather reduces our personal rights to the point where we have none and ultimately end up as a dictatorship.)

Financial Thoughts
on Investing
by Warren Buffett

(Ed’s Note: The following condensation is from The Tao of Warren Buffett, written by Mary Buffett and David Clark and available for sale at Amazon and bookstores nationwide. I am always impressed by what Warren Buffett has to say and am doing this condensation to help promote their book.)

On Investing: Never be afraid to ask too much when selling offer too little when buying.
(Ed’s Note: How much you get from a sale or how much you have to pay when making a purchase determines whether you make or lose money and how rich you ultimately become.)

(Ed’s Note: For more of Warren Buffett’s advice go to the menu bar above and click on Financial Thoughts.)