Follow This Simple Money Rule to Start Building Wealth - Money Tip Tuesday

Building wealth might seem complicated and hard to master, but there’s one financial habit when done effectively, that can put you on a path to building wealth in no time. In this tip, I’m going to share one simple money rule that changed the way I view my paycheck forever. 

Links:

• The Richest Man in Babylon by George S. Clason
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Welcome to Money Tip Tuesday from the Making Money Personal podcast. 

When it comes to building wealth, it’s easy to get discouraged when after years we don’t seem to be any farther along than when we first started.  

We then jump to conclusions about ourselves with thoughts like, “I don’t make enough”, “I can’t afford to save”, or “I don’t have enough time”.  

But surprisingly, building wealth has less to do with how much money you make and has more to do with how much you save.  

If you want to be wealthy, if you want to amass a fortune, I’m going to share a brief segment from a little parable you may have never heard before. It comes from the book, “The Richest Man in Babylon” by George S. Clason.  

This book was first published in 1926 and it shares important financial principles in the form of parables set during the time of ancient Babylon. 

The first parable addresses how your perspective on the money you make and how you choose to use it determines whether you’ll grow wealthy.  

Here goes:  

Arkad, known to be the richest man in Babylon, started as a humble scribe and now as an older man, owns a legendary fortune that rivaled even the very king.  

In the parable, Arkad speaks with a young man who wants to know the secret to building a fortune.  

Arkad responded by simply saying, “I found the road to wealth when I decided that a part of all I earned was mine to keep.” 

The young man was a bit confused at the short reply and responded, “Is that all? But all I earn is mine to keep.”  

Arkad replied, “Far from it. Do you not pay the garment maker? Do you not pay the sandal-maker? Do you not pay for the things you eat?... What have you to show for your earnings of the past month?... You pay to everyone but yourself. You labor for others.” 

This first exchange illuminates the reality that much of the money we earn is spent. Much of it goes to bills and necessities as well as other things we desire or want to experience.  

Arkad’s first point is important because we need to recognize that when we’re spending money, we’re paying other people and that money isn’t ours to keep. 

So what does that leave for us? How can we build wealth if we don’t have any money to build wealth with? 

At this point, Arkad continues the lesson by saying, “Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you. If you would become wealthy, then what you save must earn, and its children must earn...” 

 Arkad sums his lesson up with this simple message. 

“A part of all you earn is yours to keep.... Pay yourself first.” 

Arkad’s simple, yet profound advice, though fictional, is a simple strategy to building wealth over time. 

When we spend everything we make, we’re contributing to making others rich rather than building our own wealth. We’re paying everyone but ourselves.  

Faithfully set aside a portion of your income for yourself every time you get paid. 

Then, find a way to get that money to make more money. Use savings accounts like online savings, CDs, IRAs with good interest rates and talk to a financial professional to set up quality investment accounts that will get those dollars earning more in the background. 

Before closing I’ll leave this final message from Arkad. He says, “Wealth like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in the contentment beneath its shade.” 

If there are any other tips or topics, you’d like us to cover, let us know at tcupodcast@trianglecu.org.  Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.  

Thanks for listening to today’s Money Tip Tuesday and be sure to check out our other tips and episodes on the Making Money Personal podcast.  

Have a great day!