Note: All text marked in italics is quoted from the book.
First Law of Wealth
Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.
"Any man who will put by one-tenth of his earnings consistently and invest it wisely will surely create a valuable estate that will provide an income for him in the future and further guarantee safety for his family in case the gods call him to the world of darkness. This law always sayeth that gold cometh gladly to such a man. I can truly certify this in my own life. The more gold I accumulate, the more readily it comes to me and in increased quantities. The gold which I save earns more, even as yours will, and its earnings earn more, and this is the working out of the first law."
Wealth comes to those who save regularly. This wealth keeps accumulating consistently and provides a valuable stream of income to the saver over the long term.
Second Law of Wealth
Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
"Gold, indeed, is a willing worker. It is ever eager to multiply when opportunity presents itself. To every man who hath a store of gold set by, opportunity comes for its most profitable use. As the years pass, it multiplies itself in surprising fashion."
Wealth keeps accumulating consistently for those who invest it with caution and care. It accumulates at a faster pace when presented itself with a worthwhile investment opportunity. It compounds over a longer term.
Third Law of Wealth
Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
"Gold, indeed, clingeth to the cautious owner, even as it flees the careless owner. The man who seeks the advice of men wise in handling gold soon learneth not to jeopardize his treasure, but to preserve in safety and to enjoy in contentment its consistent increase."
Wealth stays with a person who invests it with caution and leaves a person who invests carelessly. People who consult wise financial advisors learn to handle their money cautiously. They learn to watch it grow at a reasonable and consistent pace.
Fourth Law of Wealth
Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
To the man who hath gold, yet is not skilled in its handling, many uses for it appear most profitable. Too often these are fraught with danger of loss, and if properly analyzed by wise men, show small possibility of profit. Therefore, the inexperienced owner of gold who trusts to his own judgment and invests it in business or purposes with which he is not familiar, too often finds his judgment imperfect, and pays with his treasure for his inexperience. Wise, indeed is he who investeth his treasures under the advice of men skilled In the ways of gold."
People who invest their wealth in businesses or investments that they do not understand are in the danger of losing it. Invest with advise of experts in that particular field to take an informed decision.
Fifth Law of Wealth
Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment."
Fanciful propositions that thrill like adventure tales always come to the new owner of gold. These appear to endow his treasure with magic powers that will enable it to make impossible earnings. Yet heed ye the wise men for verily they know the risks that lurk behind every plan to make great wealth suddenly.
If you invest your wealth with just an eye on returns without considering risk, you may soon lose whatever you own. You may be susceptible to fraud or losing propositions.
Golden Rules of lending your money
These rules are applicable to any individual or institution desirous of lending its money. Following are the prudent rules of lending your hard earned wealth:
1. Even if you want to offer financial help your friend, you should do it in a way that it does not bring your friends burden on yourself.
If you desire to help thy friend, do so in a way that will not bring thy friend's burdens upon thyself."
2. Three categories of people to whom we can lend money:
a. People who have more valuable assets than their liabilities:
"The safest loans, my token box tells me, are to those whose possessions are of more value than the one they desire. They own lands, or jewels, or camels, or other things which could be sold to repay the loan. Some of the tokens given to me are jewels of more value than the loan. Others are promises that if the loan be not repaid as agreed they will deliver to me certain property settlement. On loans like those I am assured that my gold will be returned with the rental thereon, for the loan is based on property.
b. People who have a robust capability to earn (like salaried people)
"In another class are those who have the capacity to earn. They are such as you, who labor or serve and are paid. They have income and if they are honest and suffer no misfortune, I know that they also can repay the gold I loan them and the rental to which I am entitled. Such loans are based on human effort.
c. Personal Guarantee by people who belong to category a) or b) as above
"Others are those who have neither property nor assured earning capacity. Life is hard and there will always be some who cannot adjust themselves to it. Alas for the loans I make them, even though they be no larger than a pence, my token box may censure me in the years to come unless they be guaranteed by good friends of the borrower who know him honorable."
3. People who are emotional and borrow for emotional needs are unsafe for lending and may default the earliest.
The chest tells you, Rodan, that humans in the throes of great emotions are not safe risks for the gold lender.
4. Lenders should be careful in lending to young borrowers as they can potentially speculate away the borrowed money in quest for quick gains. "Youth is ambitious. Youth would take short cuts to wealth and the desirable things for which it stands. To secure wealth quickly youth often borrows unwisely. Youth, never having had experience, cannot realize that hopeless debt is like a deep pit into which one may descend quickly and where one may struggle vainly for many days. It is a pit of sorrow and regrets where the brightness of the sun is overcast and night is made unhappy by restless sleeping.
5. Borrowing for productive purposes is always to be encouraged, as it builds earnings capacity. Yet, I do not discourage borrowing gold. I encourage it. I recommend it if it be for a wise purpose. I myself made my first real success as a merchant with borrowed gold. "Yet, what should the lender do in such a case? The youth is in despair and accomplishes nothing. He is discouraged. He makes no effort to repay. My heart turns against depriving the father of his land and cattle."
6. Money is the raw material for a lender and should be lent wisely with a strong emphasis on repayment and safety of principal. Gold, you see, Rodan, is the merchandise of the lender of money. It is easy to lend. If it is lent unwisely then it is difficult to get back. The wise lender wishes not the risk of the undertaking but the guarantee of safe repayment.
7. How to lend to relative. What should you say.
Should I lend my fifty pieces of gold to my sister's husband?
"Then go to her and say: 'Three years I have labored each day except fast days, from morning until night, and I have denied myself many things that my heart craved. For each year of labor and self-denial I have to show one piece of gold. Thou art my favored sister and I wish that thy husband may engage in business in which he will prosper greatly. If he will submit to me a plan that seems wise and possible to my friend, Mathon, then will I gladly lend to him my savings of an entire year that he may have an opportunity to prove that he can succeed.' Do that, I say, and if he has within him the soul to succeed he can prove it. If he fails he will not owe thee more than he can hope some day to repay.
The rule for lending money cast in stone:
BETTER A LITTLE CAUTION THAN A GREAT REGRET
How to get yourself out of debt trap – Ancient Wisdom
Under the wise advice of my good friend Mathon, the gold lender, I am determined to follow an exact plan that he doth say will lead any honorable man out of debt into means and self respect. This plan includeth three purposes which are my hope and desire.
First, the plan doth provide for my future prosperity.
Therefore one-tenth of all I earn shall be set aside as my own to keep. For Mathon speaketh wisely when he saith: "That man who keepeth in his purse both gold and silver that he need not spend is good to his family and loyal to his king.
Second, the plan doth provide that I shall support and clothe my good wife who hath returned to me with loyalty from the house of her father. For Mathon doth say that to take good care of a faithful wife putteth self-respect into the heart of a man and addeth strength and determination to his purposes. Therefore seven-tenths of all I earn shall be used to provide a home, clothes to wear, and food to eat, with a bit extra to spend, that our lives be not lacking in pleasure and enjoyment. But he doth further enjoin the greatest care that we spend not greater than seven-tenths of what I earn for these worthy purposes. Herein lieth the success of the plan.
Third, the plan doth provide that out of my earnings my debts shall be paid.
Therefore each time the moon is full, two-tenths of all I have earned shall be divided honorably and fairly among those who have trusted me and to whom I am indebted.
Importance of Work
"Megiddo …talked to me earnestly to impress upon me how valuable work would be to me in the future: 'Some men hate it. They make it their enemy. Better to treat it like a friend, make thyself like it. Don't mind because it is hard. If thou thinkest about what a good house thou build, then who cares if the beams are heavy and it is far from the well to carry the water for the plaster. Promise me, boy, if thou get a master, work for him as hard as thou canst. If he does not appreciate all thou do, never mind. Remember, work, well-done, does good to the man who does it. It makes him a better man.'
“My willingness to work enabled me to escape from being sold to join the slave gangs upon the walls. It also impressed thy grandfather, he selected me for his partner.”
Other Highlights from the Personal Finance Classic – “The Richest Man in Babylon”
1. Compound interest works to build your wealth for you.
"Then learn to make your treasure work for you. Make it your slave. Make its children and its children's children work for you.
2. Ensure that you save enough that you can provide for your retirement
"Insure an income for thy future. Look thou at the aged and forget not that in the days to come thou also will be numbered among them.
3. Always be wary of risk. Invest carefully.
Therefore invest thy treasure with greatest caution that it be not lost. Usurious rates of return are deceitful sirens that sing but to lure the unwary upon the rocks of loss and remorse.
4. Insure yourself.
Provide also that thy family may not want should the Gods call thee to their realms. For such protection it is always possible to make provision with small payments at regular intervals. Therefore the provident man delays not in expectation of a large sum becoming available for such a wise purpose.
5. Entrust your money with a knowledgeable and trustworthy financial advisor. Counsel with wise men. Seek the advice of men whose daily work is handling money. Let them save you from such an error as I myself made in entrusting my money to the judgment of Azmur, the brickmaker. A small return and a safe one is far more desirable than risk.
6. Don’t be a miser. Enjoy your money by careful consumption expenditure. Enjoy life while you are here. Do not overstrain or try to save too much. If one-tenth of all you earn is as much as you can comfortably keep, be content to keep this portion. Live otherwise according to your income and let not yourself get niggardly and afraid to spend. Life is good and life is rich with things worthwhile and things to enjoy."