Article preface
As a mortgage broker for over a decade, one of the most
popular strategies I advise clients to go with is the
powerful loan consolidation and mortgage refinance
method. Pay off accumulated, expensive bad debt with
lower interest mortgage loans. Now, before I continue to
my point, I want to mention that when I received this
article, I was thrown back in time to when actually read
the book. I remember at time thinking it was one of the
best financial books I had ever read. It is wonderful
and I completely recommend you pick up a copy, you will
not be disappointed. Anyway, as I was saying regarding
using mortgage refinancing to do
loan consolidations,
there is a major problem today with money management at
its core. People spend more than they make and end up
being in financial trouble.
It is absolutely everywhere, in governments, in business
and in households of all income ranges. Bankruptcies and
foreclosures are ever-growing and people are suffering.
I believe a major part of this problem is the source of
a lack of education, on the topic of money, in our
schools. Begin by reading this article and think about
how you can apply the techniques in your own life and
start to get money smart.
Steve
The Richest Man in Babylon - A Discussion
“A lean purse is easier to care than endure.” This quote
comes from The Richest Man in Babylon and the book is
based on that concept. Actually the book is really a
compilation of pamphlets dealing with
finances, written
as a parable and set in ancient Babylon. This story is
set in ancient times but is applicable today.
After years of growth and prosperity, Babylon found
itself in dire straits. Very few people in the city were
living above poverty. The King called his learned
minister to the throne and asked him about the secret to
wealth and could this secret be taught to his suffering
people.
The minister said “That which one man knows
can be
taught to others.”
His wisdom follows as such:
The 1st Cure – “Start thy purse to fattening. For every
ten coins thou places within thy purse take out only
nine for use. Thy purse will start to fatten and bring
satisfaction to thy soul.” Which do you desire most? Is
it your daily gratifications or is it long term goals?
The coins you take from your purse bring the first. The
coins you leave in your purse bring the latter.
The 2nd Cure – “Control thy expenditures.” Each of us
have ‘necessary expenses’ however they will always grow
equal to our income unless we budget. No matter what
extra money comes in in a certain month never go above
your budget. This will fatten your purse.
The 3rd Cure – “Make thy gold multiply.” Make your money
work for you. No matter how little you have to start
with you can find many safe investment instruments.
How’s that purse feeling now?
The 4th Cure – “Guard thy treasures from loss.” The
first rule for sound investing is ensuring the security
of your principal. Stick to guaranteed interest bearing
bonds or accounts.
The 5th Cure – “Make of thy dwelling a profitable
investment.” This simply means it makes sense to own
than to rent. You are adding to your worth with every
payment.
The 6th Cure – “Ensure a future income.” Plan and save
now for the future when there may be a time you cannot
earn. Let’s not forget retirement.
The 7th Cure – “Increase thy ability to earn.” Yes, you
can wait for your incremental raises but education and
bettering yourself at your craft will ensure rich
rewards.
Follow these cures and don’t overstrain yourself by
trying to save too much. This can make someone ‘afraid
to spend’ and this isn’t good especially for the
economy.
Work hard, have compassion for the unfortunate and enjoy
your present while protecting your future.
Wendy Peacock
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