We live in an impatient era, and when it comes to money, we want more of them now, today, not tomorrow. Whether it is a mortgage deposit or clearing those credit cards that consume our energy long after we have stopped enjoying what we bought with them, the sooner the better. When it comes to investing, we want easy choices and quick returns. Hence the current mania for cryptocurrencies. Why invest in nanotechnology or machine learning when Ethereum is locked in a never-ending spiral and Bitcoin is the gift it continues to give?
A century ago, American writer George S Clason took a different approach. In The Rich Man of Babylon he gave the world a treasure trove – literally – of financial principles based on things that may seem old-fashioned today: prudence, prudence, and wisdom. Clason used the wise men of the ancient city of Babylon as a spokesman for his financial advice, but that advice is just as important today as it was a century ago when the Wall Street Crash and the Great Depression collapsed.
Take, for example, the five laws of gold. If you are looking to put your personal finances on a sound footing, wherever you are in life, these are for you:
Law No.1: Gold comes with pleasure and increasing quantity for anyone who puts at least one tenth of his profits to create a fortune for their future and that of their family. In other words, save 10% of your income. Minimum Save more than that if you can. And that 10% is not for next year’s holidays or a new car. It’s for a long period of time. Your 10% may include your pension contributions, ISA, premium bonds or any type of high interest / limited access savings account. Okay, interest rates for savers are at historic lows now, but who knows where they will be within five or ten years? And compound interest means your savings will grow faster than you think.
Law No.2: Gold works diligently and with pleasure for the wise owner who finds lucrative work for him. So if you are looking to invest more than you save, do it wisely. No cryptocurrencies or pyramid schemes. We are focusing on the words “profitable” and “employment”. Make your money work for you but remember the best you can hope for on this side of the rainbow is a steady return for a long time, not lottery winnings. In practice this is likely to mean shares in established enterprises that offer a regular dividend and a steady upward trend in stock price. You can invest directly, or through a fund manager in the form of trust units, but before you split with a single penny, see Laws 3, 4 and 5 …
Law No.3: Gold adheres to the protection of the prudent owner who invests it under the advice of those who are wise to handle it. Before you do anything, talk to a qualified, experienced financial advisor. If you do not know, do some research. Check them out online. What expertise do they have? What kind of customers? Read the ratings. Call them first and get a feel for what they can offer you, then decide if a face-to-face meeting will work. Look at their commission arrangements. Are they independent or affiliated with a particular company, under contract to promote that company’s financial products? A good financial advisor will encourage you to get the basics: retirement, life insurance, somewhere to live, before directing you to investing in emerging markets and space travel. When you are satisfied that you have found a counselor you can count on, listen to them. Trust their advice. But review your relationship with them at regular intervals, say every year, and if you are not happy, look elsewhere. Chances are, if your judgment was sound in the first place, you will stay with the same counselor for many years to come.
Law No.4: Gold slips from one who invests it in businesses or purposes for which they are not familiar or which have not been approved by those capable of holding it. If you have a deep knowledge of food retail, no doubt invest in the supermarket chain that is growing market share. Likewise, if you work for a company that has an employee stock ownership scheme, it makes sense to take advantage of it if you are confident that your company has good prospects. But, you should never invest in any market or financial product that you do not understand (remember the Crash!) Or can not fully research. If you are tempted to try your hand at currency trading or options trading and have a financial advisor, talk to them first. If they are unable to rush, ask them to refer you to someone who is. Best of all, stay away from anything you are not sure about, no matter how great the potential returns.
Law No. 5: Gold flees from the one who seeks impossible profits or who follows the appealing advice of swindlers and fraudsters or who trusts his experience. Again, the fifth law follows in the heel of the fourth. If you start flipping through the internet for financial advice and wealth creation ideas, your mailbox will soon be full of “scammers and scammers” who promise you land if you invest 99 999 in their sistemin 1 “return system. at 1XXXXXX Ç Chicago Market Exchange. Remember, the only one who makes money on a gold rush is the one who sells the shovel. Buy the wrong shovel and you will soon dig yourself into debt. Not only will you pay through the nose for a system that has no proven value; by following it you will probably lose far more than the price you paid for it. At the very least you should check out the original product reviews. And never buy a system, investment vehicle or financial product from a company that is not registered by a national observer, such as the UK Financial Conduct Authority.